Waste of the Day: Record No-Bid Contract in DC
Topline: The firing of then-Homeland Security Secretary Kristi Noem came after she funded a $220 million ad campaign without a competitive bidding process, but she is far from the only federal official awarding no-bid contracts.
Washington spent a record $262.6 billion on no-bid contracts in fiscal year 2025, or 33% of all contract spending for the year.
Key facts: The competitive bidding process helps ensure that taxpayers get the best value for their money when the government buys a product or service. Several companies submit offers for the job, and the government chooses the cheapest one without sacrificing quality
Not every no-bid contract is a concern for taxpayers. Almost $9 billion worth of the contracts were not bid competitively because they were relatively inexpensive (usually less than $250,000). Another $39.9 billion in purchases were only available from one company, usually because of patents.
However, the majority of the no-bid contracts were given a “Code C” in federal spending records. That means they could have been open for competition, but the government chose to bypass the process. Code C spending requires a signed letter of justification from a federal contracting officer.
The Code C purchases included 8,778 contracts worth $3.8 billion that skipped the competitive bidding process because there was an “urgent need” to quickly find a supplier. Noem used the urgent need explanation for her ad campaign.
Other justifications included $4.3 billion in no-bid contracts awarded because of “national security” and $4.4 billion awarded for the “public interest.”
While such explanations are often legitimate, they make it more difficult for taxpayers to be certain that money is not being funneled to government officials’ family or friends, like Noem allegedly did. There is also a good chance that another company could have performed the same work for a lower price, even if it took a bit longer.
The Department of War awarded 88% of the government’s no-bid contracts in fiscal year 2025. Weapons companies like Boeing and Lockheed Martin were the top recipients. NASA and the Department of Veterans Affairs were also among the top spenders.
In September 2025 alone, the government awarded $56.9 billion in no-bid contracts. Washington had never spent more than $43.5 billion on no-bid contracts in a single month.
Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.
Critical quote: David Williams, president of the Taxpayers Protection Alliance, once called no-bid contracts the “essence of corruption” in an editorial for The Hill.
“Companies seeking the government’s business should compete on price and quality — just like firms that operate exclusively in the private sector,” Williams wrote. “Foregoing healthy market competition and pre-selecting winners wastes money and encourages fraud and abuse.”
Summary: While no-bid contracts are sometimes necessary, they are arguably being used too often if they make up a third of all contract spending.
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