By Steve Kelman

Blog archive

Buying commercial items is back -- or is it?

There's nothing like a budget crisis to remind people of cost-saving notions that would be good ideas even if budgets weren't so tight.

Those ideas are often easier to ignore when the dollars are flowing fast, but perhaps they should not be. One such idea, featured in a recent article in the New York Times, is the Air Force's purchase of used corporate jets to be retooled as picture-taking spy planes.

The Air Force initially began buying the jets, stripping out the wet bars and flat-screen TVs, and replacing them with surveillance equipment to meet urgent needs because drones couldn't be built fast enough. But the service is doing it now to save money on certain intelligence-gathering uses. Aside from saving the Air Force lots of money, in battlefield situations in which field commanders want to talk with a live person, these small planes are considered superior to drones that send computer output to headquarters.

This harks back to the effort begun in the 1990s to look for opportunities for the government to avoid having something custom-made by a contractor specializing in government work and instead consider the larger range of products developed by industry for a general customer base. In doing so, the government could take advantage of research efforts and production processes whose costs were spread among a large number of customers rather than having all those costs be borne by the government, as is the case for government-unique items.

Some of that push survived the past decade, particularly the effort to move IT away from custom-built software and toward more integration of commercial packages. But it unfortunately lost emphasis and priority. Some thought of it as a one-size-fits-all solution and were taken aback when it sometimes turned out that commercial items were unsuitable for government requirements.

The push was also slowed by debates over the related but not identical movement to reduce government-unique oversight demands and contract terms. Critics were concerned that sole-source items that were highly adapted to government use (most notoriously, the C-130 airplane) were classified as "commercial items" and exempted from cost-disclosure rules, leading to situations in which it was alleged that the government got a bad price.

And some in the government — especially in the heightened oversight and compliance environment of the past few years — were more comfortable dealing with traditional contractors, with their well-developed government-only compliance systems, rather than with commercial companies that thought TINA was the name of a Hollywood starlet rather than a contracting compliance rule. (It stands for the Truth in Negotiations Act.)

It might well be that the government's tight budget situation will prompt officials to consider more seriously how to bring down costs radically by going outside the box of a build-it-from-scratch-for-the-government approach — as the Air Force has — to one that figures out how to make do with what's already out there.

David Van Buren, the Air Force's service acquisition executive, was quoted in the Times article as saying, "For me, this is a precursor of what we’re trying to do across the board.” I hope he's right.

Posted on Sep 08, 2011 at 12:09 PM


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