Contracting Practices

Experts applaud DOD Better Buying plan

pen and contract

Defense officials want to avoid a repeat of the aftershocks of the 1990s Defense Department budget cuts, which hit the department’s acquisition workforce hard, taking away expertise while putting an increasing workload on the shoulders of fewer employees.

Today, DOD wants convey in its Better Buying Power Initiative 2.0 that the workforce will not take that hit again, an expert said.

The acquisition initiative’s message: “We have to think carefully and strategically when it comes to the workforce,” said Stan Soloway, president and CEO of the Professional Services Council and former deputy undersecretary of defense for acquisition reform.


Read the Better Buying Power memo


Defense officials cannot allow themselves to backslide, or even settle for holding steady, on improving DOD's acquisition workforce, he said, because it's the essential component for meeting other acquisition goals, such as boosting competition, controlling program costs and incentivizing contractors.

Frank Kendall, undersecretary of defense for acquisition, technology and logistics, laid out 36 goals Nov. 13 for DOD to address in the coming years as the Better Buying Power Initiative continues to evolve. Kendall’s primary aspect of this iteration is professionalizing the workforce.

“I don’t think there’s anything more important, frankly, to our outcomes than the professionalism of our workforce,” Kendall said during a speech Nov. 14 at the Center for Strategic and International Studies. He said the ability of DOD’s acquisition workforce, which constitutes roughly 150,000 people, depends on its capacity and its skills to do the jobs. (View a webcast of the presentation here.)

“I felt strongly that highlighting the importance of our people and developing them and making them stronger and more capable of doing a better job is really No. 1 in terms of my priorities,” he said.

A knowledgeable workforce is especially important in lean times when money is tight and there is less room for mistakes, Soloway and others have said.

When Congress went into DOD with its cuts in the 1990s, the defense acquisition workforce took a hit and so DOD lost much of its expertise in a nuanced business of negotiations, relationships, and management, Soloway said. The new Better Buying Power Initiative 2.0 draft document emphasizes the workforce as the department faces austere times—not even counting the potential for sequestration.

Defense officials learned from the 1990s that they had not paid attention to the increasingly central role the workforce was playing in negotiating, awarding and even managing defense contracts, Soloway said.

Since those days, defense acquisition officials—as well as officials in civilian agencies—have worked to develop their employees’ skills as strong buyers, but experts also see where those employees need some attention.

At the briefing Nov. 14, Dan Gordon, former administrator of the Office of Federal Procurement Policy, shared with Kendall his concerns with the acquisition workforce and its reactions to today’s procurement climate. Contracting officers and contract specialists fear talks with industry, for instance. They also are wary of conducting discussions, even early on in a contract’s requirements development phase, because of the specter of a bid protest. It’s a fear DOD and the workforce cannot live with, Gordon said.

Bid protests are, in fact, rare in the overall scheme of government contracting, he added.

In fiscal 2012, contractors filed 2,475 bid protest cases with the Government Accountability Office. Of those, only 570 merited a sustain-or-deny ruling by GAO. Of those, GAO sustained only 106 cases.

“I used to tell [contracting officers] the likelihood of losing a bid protest is like being hit by lightning. That didn’t make them feel better, but it did make them worry about lightning,” said Gordon, who is now associate dean for government procurement law at the George Washington University.

Kendall said the fear of protests should not paralyze DOD from moving ahead on its acquisition work.

“We have lawyers,” he said. “We know how to argue a case in front of GAO or wherever.”

Moreover, contracting officers should not feel like they must stop talks with industry until the department releases the final request for proposal, if DOD wants the best market research.

Finally, Gordon brought up concerns with the “lowest price technically acceptable” contracting practice. LPTA is part of a trend in defense contracting in which the department sets a standard for what it wants to buy and chooses the lowest priced bid that meets the standard in a competition.

Kendall wants DOD to better define those standards so it buys quality products and services. In the Better Buying Power Initiative 2.0, Kendall wrote: “When LPTA is used, define technically acceptable to ensure needed quality.”

With that statement, Gordon said he is worried Kendall may convey the wrong message to the workforce. Kendall’s message may suggest that LPTA is fine as long as certain standards are met. Gordon urged Kendall to rephrase the statement to forbid LPTA unless quality requirements can be clearly defined. Gordon’s suggestion would discourage use LPTA except in certain circumstances.

Gordon raise concerns that DOD is using LPTA for services contracts, not for buying routine products.

“I’m hearing so many stories about LPTA being use for services, including professional services, where, frankly, I find it astonishing that it makes sense at all,” Gordon said. By opting for LPTA when buying services, the government gives up its ability to reward a contractor that has done its past work well.

Kendall said he wants to get data on how much DOD is using the buying technique, since he believes the community may be overreacting to it.

“I don’t think we’re using it all that much,” although DOD has used it for some service contracts, he said. He is hearing concerns from the services industry, largely from incumbent contractors.

Nevertheless, Kendall said the concern has some merit.

“We need to make sure we’re not simply going for lowest price, period, but that we’re actually getting the quality that we need for whatever it is we’re contracting for,” he said in a speech Nov. 13 at the Pentagon.

DOD should emphasize buying smartly, not just cheaply, Soloway said. To do that, the workforce needs to think critically.

“The workforce needs the tools, the capabilities, and the support—emphasis on the latter—to think,” he added.

With the initiative’s new emphasis on people, officials intend to focus first on key leadership positions, such as program managers, chief engineers and contracting officers, all of whom have a lot of responsibility for leading a program to a successful outcome.

Defense officials are still working out the exact evolution of Better Buying Power Initiative. Currently they are gathering input from the community about the draft document they released Nov. 13. They are writing guidance on the 36 initiatives, roughly half of which are carried over from the Better Buying Power Initiative released in 2010. Kendall said he expects to roll out the final set of initiatives and implementation guidance in January.

As the initiative is being finalized, experts say DOD is going in the right direction with it.

Steven Schooner, a professor of government procurement law and co-director of the Government Procurement Law Program at George Washington University, said the new document has improved greatly since the initial Better Buying Power Initiative document. He said it’s more sophisticated and nuanced than before.

“It is incredibly comforting to hear rhetoric on things like incentives, appropriate types of contracts, the workforce, value, and market research,” he said.

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Reader comments

Fri, Nov 23, 2012 Jaime Gracia Washington, DC

One of the critical missing components in this revamped initiative is the need to improve communications and collaboration with industry. Mr. Kendall himself said that the biggest program at DoD, F-35 Joint Strike Fighter (JSF), has see a relationship between the DoD and the contractor that is "appalling ." None of these items he hopes to improve can be relied without an improvement in how DoD and industry communicate, interact, and work towards common goals.

Wed, Nov 21, 2012 Cowboy Joe

Kinda' odd that G.I. equipment has always been associated with 'lowest bidder' (LP(not necessarily)TA) - but in the end, that what it's all about. Most of the contracting folk, management folks, and even some of the engineering folk don't think long term enough to understand 'total' value over the 'total' life. Just lay this up aginst the recent articles on compromised supply chains and you can get the picture.

Fri, Nov 16, 2012

When I retire, I will NOT look back.

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