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Feds Lose $23 Million Because Patent Office Used Too Many No-Bid Contracts

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U.S. Patent and Trademark Office (PTO) officials threw away $23 million by failing to use a competitive bidding process for awarding contracts, according to the Department of Commerce Office of Inspector General (IG).

The IG said the agency abused sole-source contracts, using them in 24 of the 34 single-source contracts the IG reviewed covering fiscal year 2014 and the first quarter of 2015. In those 24 contracts, totaling nearly $116 million, the PTO wasted $23.2 million, the IG found. The PTO awarded a total of 104 noncompetitive contracts in fiscal year 2014 and the first quarter of 2015.

The PTO couldn’t provide all of the required documentation for $108 million of the $116 million total. No documentation at all could be found for one of the reviewed contract. (RELATED: VA Boss Promoted After Steering $4 Million Contract To Relative)

“Competition is a cornerstone of the federal acquisition system and a critical tool for achieving the best possible return on investment for taxpayers,” the IG said. “Some degree of noncompetitive contracting is unavoidable — such as when only one responsible source can perform the work.

The IG also acknowledged that “in some cases, competition is impractical due to the government’s previous reliance on specific contractors. However, competitive contracts can help save money, conserve scarce resources, improve contractor performance, curb fraud, and promote accountability.”

Among the reasons for the PTO’s abuse of sole source contracting was failure to document contractor claims. In one instance cited by the IG, the PTO approved a $7.8 million contract for a subscription to scientific research because the contractor claimed — and government officials uncritically accepted — that it was the only company that could provide that service. 

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