Masiello talks pricing, LPTA and long-term contracts
- By Sean Lyngaas
- Apr 18, 2014
Maj. Gen. Wendy Masiello said the Air Force is working with its suppliers to better manage subcontracting costs.
The Air Force has its eye on subcontractors as it seeks to trim acquisition costs, Maj. Gen. Wendy Masiello, the Air Force's deputy assistant secretary for contracting, told the audience at an AFCEA event on April 18.
Subcontractors account for 60 percent to 70 percent of costs in larger contracts, which has Masiello's Office of the Assistant Secretary of the Air Force for Acquisition thinking about how it can economize further down the supply chain, she said. The office is working with the Defense Contract Audit Agency and suppliers to be more forthcoming about project costs while reassuring clients that their information is kept confidential from competitors, she told FCW after her speech.
"We'll have to triage it because many of our clients have a lot of suppliers, so we'll have to manage that carefully," she said. "But it's really part of our due diligence" of providing clarity on the cost of contracts.
Suppliers are cooperating and offering close to the complete picture of cost information the office is requesting, she added. "People are still getting used to this next layer of detail, but we'll get going."
Shorter project cycles and shrinking proposal costs are enduring but surmountable obstacles in acquisition, Masiello said in her speech. Defense contractors are responding to those constraints by divesting portions of their business and improving the quality of contract proposals, among other things, she said. The prevalence of three- or five-year projects does not rule out longer ones, and even in tight fiscal times, her office decides on contracts based on need.
So although lowest price, technically acceptable contracts have their place in the office's acquisition strategy, they are "not our tool of choice," Masiello said.
She was recently nominated to be director of the Defense Contract Management Agency, and Brig. Gen. Casey Blake is slated to take her place. Her April 18 remarks, however, were given in her current Air Force-only capacity.
Sean Lyngaas is an FCW staff writer covering defense, cybersecurity and intelligence issues. Follow him on Twitter: @snlyngaas.