Why Congress should embrace market research for DOD
- By Jeff Green
- Jul 19, 2018
Tucked away in this year's version of the Senate National Defense Authorization Act is a provision with potentially far-reaching benefits for IT acquisition within the Department of Defense. This provision modifies acquisition law for major defense programs to facilitate the integration of independent third-party commercial research into the acquisition process.
The market research provision is Section 802 of the NDAA. In the context of the bill, "market research" means "a review of existing systems, subsystems, capabilities, and technologies that are available or could be made available to meet the needs of the Department of Defense in whole or in part."
This would provide a venue for program managers to draw upon the expertise of the private sector to execute the market research function. Basically, when the DOD has a technological problem, program managers are supposed to research what potential solutions exist in the private sector.
This would bring significant benefits to DOD IT acquisition.
Right now, DOD struggles to deliver effective IT solutions to the warfighter that are on time and on budget. A recent GAO report found that 14 of 18 major information technology programs selected for review experienced schedule delays ranging from two months to 13 years.
Additionally, only half of the programs fully met all of their technical performance requirements. The root cause for much of this performance deficit can be traced back to the very beginning of the acquisition process for new IT programs.
For a DOD program manager, even the first step of defining the requirements for an IT solution can be daunting. To a large extent, this difficulty is due to the sheer volume of commercial products in the marketplace, as well as the rapid pace of technological change. With their myriad responsibilities, program managers simply do not have time to keep abreast of every new development. As a result, requirements frequently change after they are written, adding enormous costs and time delays to the process.
Once requirements are defined and solicitations are put out to industry, program managers must then contend with a veritable flood of industry feedback and data on the proposed solution. The biggest problem with vendor-provided data is that it will always be biased to favor the offeror's proposed solution. This doesn't mean that industry proposals are inherently bad or written with mal-intent; vendors simply understand their own technology better than the government's needs or existing IT infrastructure. It is in this process of shifting though industry proposals and their associated data that independent, third-party commercial market research could assist DoD tremendously.
Leveraging this type of service in the contracting phase could bring at least three major benefits to the IT acquisition process:
- Market research firms have expertise that simply does not exist within the Federal government. This is especially true when it comes to IT products and services where the underlying technology is evolving too rapidly for program managers to keep up.
- Commercial market research services are inherently scalable and can flex to accommodate the research needs of a particular government program.
- Most importantly, third party commercial research removes the problem of vendor bias in the provision of data that a program manager requires to make an informed contracting decision. Research firms can thus act as unbiased intermediaries between vendors and the government to help program managers select the best technical solution for an identified problem.
Commercial market research has already proven its value in a variety of contexts. In the private sector, this service has been shown to lead to lower costs, better program outcomes, and overall increased return on investment. For IT spending in the U.S. defense market, the benefits of commercial market research are likely to be even greater for two reasons.
First, DoD alone spends around $4.1 billion a year on IT development, modernization, and enhancement. Thus, any improvement to the acquisition process will likely result in substantial cost savings. Second, DOD is woefully behind where it needs to be in many aspects of IT modernization including cloud migration, cloud computing, and data analytics.
It is precisely these areas where experienced market research firms can assist with defining requirements so that they are stable and won't need to be amended or modified and evaluating competing vendor proposals.
Lawmakers should work to ensure that the market research provision in the Senate NDAA is included in the version of the bill that lands on the president's desk. Because of their deep expertise, scalability, and ability to provide unbiased analytical services to the government, commercial market research firms have the potential to significantly improve DOD's acquisition of IT goods and services.
It is likely that the need for this type of service will grow exponentially in the future as DOD undertakes an increasing number of IT modernization initiatives to keep up with the private sector and put the best new technologies directly into the hands of the warfighter.
Jeff Green is founder and president of J.A. Green & Company and the former Staff Director of the House Armed Services Committee’s Readiness Subcommittee.