What's DOD's worst acquisition policy? Ashton Carter wants to know

Defense official asks for industry input on costly policies

Here's your chance, defense contractors, to give the department a piece of your mind.

Defense Department officials want industry input on rules that provide little value while driving up costs.

In a notice in today’s Federal Register, DOD officials said they understand that the various reporting requirements and other acquisition practices make industry adopt processes and make investments that increase costs, especially overhead costs. At the same time, some of those requirements add little value to the overall work.

So, DOD wants to know the policies that industry believes fit that description. It will take submissions through March 31.

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The request for industry’s comments is the next stage of DOD’s Better Buying Power Initiative, launched in 2010 by Ashton Carter, undersecretary of defense for acquisition, technology and logistics.

Industry sent defense officials more than 500 suggestions last summer, and Carter incorporated these comments into a Sept. 10 memo. The memo sets out 23 ways the government can improve its performance and incentivize better performance from industry. It is aimed at lowering prices without sacrificing quality.

“It is guidance from me to the acquisition workforce in the Defense Department on how we can get more without more,” Carter said in a Feb. 9 speech at the Cowen Investment Conference in New York, N.Y.

Under the new request for comments, DOD will use the suggestions as part of internal deliberations on the buying initiative, officials said. When contractors submit a suggestion on a costly policy, officials want to know the magnitude of the cost and have the recommendations identify the sources of the costs, backed by credible and convincing data.

“DOD’s goal is to develop a fact-based program to reform cost-inflating practices,” the Federal Register notice states.

With detailed suggestions, officials can evaluate and prioritize them. More specifically, they want to follow up on industry's recommendations from 2010 on the thresholds related to the provisions in the Truth in Negotiations Act. In particular, they want to review audit practices and certain barriers to correctly balancing industry’s abilities as DOD's buying shifts and moves based on demands, the notice states.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Tue, Mar 15, 2011

The Non Use and restrictions on the use of valid certified refurbished equipment within the largest DOD and non DOD Prime Contracts. The mfg's have postured well and while what the ed user is using is working fine that the tax payer purchased, if you wanted to add say 48 more connection ports to a IT closet rack in many cases you find the mfg discontinued that product ( generally about every 12-18 months they do ) leaving you to replace all ports in your rack because of not allowing the Federal End users to purchase VALID Certified Mfg refurbished equipment to satisfy a basic need. Re invention of the wheel each year and having to upgrade information technology core is at the mfg's pace, not at the pace of the Federal Government and the actual need to upgrade.

Tue, Mar 1, 2011 Jerry

The costs to build systems is a direct result of the DoD's acquisition methodology. We need to somehow harness the speed and productivity of the commercial world. If we spend 5+ years building a system one is guaranteed that the requirements will change significantly. Publish a spec and make multiple awards and guarantee purchasing some number of systems if they are on schedule and meet the spec. Design the program to be evolutionary and don't change the spec before the first delivery. Use contractor processes. So far, based on my experience, we have wasted about 75 cents on the dollar. We need to do better.

Tue, Feb 22, 2011 Cory C San Diego

SDVOSB and VOSB should be on same footing as 8A. Serving the country for 4-30 years pulls vets out of the workforce during that time, set asides for veterans are responsible, give needed to help returning veterans to gain a foothold in established industries and are earned by those who have served. DoD should set the example.

Sat, Feb 19, 2011

As a percentage of cost overruns, industry overcharging the government for products and services is of far greater concern to tax payers than these policies. Pointing fingers at the policies in and of itself cannot explain the exorbitant costs on many programs. So if the government fixes some of these policies based on the magnitude of their implied cost impacts from industry's input and recommendations, will industry agree to lower their costs on a proportional basis? Or will the savings go directly to their profit margins on each program?

Fri, Feb 18, 2011 J. L. McDonald

1. The cost to respond to government RFIs, RFQs, and RFPs are entirely too high. This is due to the arcane and inefficient manner in which it evaluates proposals and awards work. Government should examine the best practices of world-class companies to determine how they might adopt more efficient practices, or at least minimize bidders' bid-and-proposal overhead costs, which are simply passed on to the government. 2. Write better RFPs and SOWs; consider getting help fro industry - do whatever it takes to keep companies from completely misunderstanding what government wants, which they frequently do. 3. The "best value" basis for award is a fiction, and industry knows it. Everyone knows that the lowest bidder usually wins. This encourages companies to underbid, hoping they will make it up after award, either by hiring cheap labor, by cutting corners on the work, or in rare cases through outright fraud. Some "value".

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