DOD plans major overhaul of service buys

The Defense Department is mulling a change in the way it acquires and manages services, going from a largely reactive process to what DOD officials describe as a strategic, enterprisewide approach.

The proposed plan for managing acquisition of services should help the department meet its cost, schedule and performance objectives for such acquisitions and make sure those acquisitions are aligned with its broader strategic needs, according to DOD executives.

“This involves the examination of the types and kinds of services we acquire and an integrated assessment of how to meet the needs of our warfighters while ensuring that the expenditure of taxpayer funds is wise and effective,” wrote Shay Assad, director of defense procurement and acquisition policy, in response to a recent Government Accountability Office report.

In its report, GAO said DOD traditionally has approached the acquisition of services differently from that of weapons. DOD officials have seen services as less risky because they involve much smaller contracts and they are not tied directly to accomplishing missions.

But this has led to an approach that has not fully addressed the key factors for the success of service acquisitions at both the strategic and transactional levels, according to the GAO report, which was provided to the Senate Armed Services Committee’s subcommittee on readiness and management support.

At the strategic level, DOD officials have not had a clear vision of what they need, how to go about meeting those needs or which resources are available to make it happen, the report states.

At the transactional level, acquisition experts continue to focus primarily on awarding contracts and do not always ensure that user needs are translated into well-defined requirements or that post-contract award activities result in expected performances.

The DOD reassessment, which Assad said should be completed sometime in the first quarter of 2007, will look at the ways DOD acquires services, both on its own and through agencies that act on the department's behalf, such as the General Services Administration and the Interior Department.

Once that is done, Assad said, the DOD will develop a strategic sourcing deployment plan, which should be completed by the end of 2007.

“The fundamental tenets of our strategy will be straightforward,” he wrote. The goal, he said, is to “ensure that we effectively and efficiently, in terms of both timeliness and cost-effectiveness, acquire the services necessary to meet the needs of our warfighters. Underpinning our strategy will be the utilization of contracting tools that ensure competition whenever possible.”

If the plan is carried through, it should go much of the way to meeting the objections Congress has had for some time about the way DOD contracts for services, the value of which rose to $141.2 billion in fiscal 2005.

The GAO first reported in 2003 that DOD’s approach did not provide an effective departmentwide view of the effectiveness of service acquisition. In January of this year, Congress enacted legislation that laid out specific requirements that DOD had to meet for managing service acquisitions.

About the Author

Brian Robinson is a freelance writer based in Portland, Ore.

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