The Defense Department is requiring senior officials to review major acquisitions before the program receives approval to move into the technology development phase, commonly known as Milestone A.
This change is part of the rigor brought into the military from the Better Buying Power (BBP) initiative.
“How do we ensure our investment accounts go as far as they can through addressing affordability? We are doing it through increased emphasis through systems engineering, especially before and around Milestone A,” said Katrina McFarland, the assistant secretary of Defense for acquisition, Tuesday at the 50th annual TechAmerica Foundation’s Vision Conference in Falls Church, Virginia. “Oddly, having been here as long as I have, we constantly have been trying to do that. Now we are putting some very discreet mechanisms in. Mr. [Frank] Kendall, [the undersecretary of Defense for acquisition, technology and logistics] reviews RFPs before they go final on the street to understand and ensure the acquisition strategy that has been brought forward is complied with inside the RFP, so he can understand that industry can respond to what’s being asked for and that investment decision complies with the enterprise’s, obviously the services’ interests.” The goal of Milestone A is to make sure the user’s needs are well defined and the acquisition and mission communities did an analysis of alternatives and a program support review among other things. But over the last few years with the maturation of Better Buying Power, DoD added this additional review hurdle.
McFarland said previously DoD would do more of a post-mortem where the service told OSD what they did and they all lived with it.
She said DoD started the reviews almost three years ago, but it’s only been a consistent effort in the last year.
“I think the business process ensured that what our acquisition strategies were what actually was happening in the RFPs,” she said in an interview after her speech. “It has put a great deal of focus by the service leaders and by the program managers to make sure they’ve got it right. It’s been very rewarding.”
BBP 3.0 coming in early 2015
On the back end of Milestone A approval is DoD’s larger use of prototyping and demonstrations to ensure they are on the right track. McFarland said these smaller scale projects are helping to get the most out of their funding without taking huge risks.
The additional review of solicitations before they go out is part of the changes brought on by the Better Buying Power initiative.
BBP version 1.0 had acquisition workers relook at and improve the acquisition process, with a goal of stretching the procurement dollars further
McFarland said BBP version 2.0 focused on getting contracting officers and program managers to take an approach focused on critical thinking. Another goal was to professionalize the acquisition workforce and initiate innovation throughout the process.
So now, BBP version 3 is expected to be finalized and released in January.
McFarland said version three includes eight initiatives and sub-initiatives.
She said one holdover is to achieve affordable programs.
The second one is for DoD to achieve dominate capabilities, while also controlling costs. She said it’s an expansion of the affordable programs goal in version 2.
She said coming up with incentives to spur innovation in government and the industry is an expansion under version 3 to the previous goal of encouraging productivity.
“Some of that in BBP 2.0 is how do you utilize best value appropriately? This is more of the same,” McFarland said. “Eliminate unproductive processes in bureaucracy. I was once told that’s like asking the fox to be the guard of the chicken house. It’s very hard for an organization to change itself, but we have seen it and we are doing discreet activities to help that occur. We are promoting effective competition. Effective competition isn’t necessarily head-on competition between peers. It’s competition throughout the entire spectrum of acquisition. It can be at the subcomponent level. It can be competition with the budget. It’s the creation of an environment that fosters competition that allows industry and our support infrastructure to understand what it can do more effectively and efficiently to get to our needs.”
She said another BBP 3.0 priority centers around improving the tradecraft internally in how DoD buys goods and services, as well as how they interact with industry. Along with that improving tradecraft, training and education is a neverending priority to ensure contracting and acquisition employees continue to improve their skills and expertise.
McFarland said the military’s relationship with industry remains important. She said Defense Secretary Chuck Hagel and Defense Deputy Secretary Bob Work are reviewing the state of the Defense industrial base.
“The firms that make strategic investment now will succeed. History has shown us. We are very interested in that. We are talking to the top 10. We’re asking where they are going and sharing with them where we can where our concerns are,” she said. “What we need from industry is an inexpensive but innovative counter to these low-tech threats. We want you to invest in research and development, and science, technology, engineering and math innovation. That’s near term, and STEM overall is going to be a long-term concern. Our country has been built on our forefathers’ innovation. Our companies should be based on innovation.”
Now to that end, McFarland said DoD needs to take more risks — calculated ones — in order to be the superior force and have the best technology.
Along with maturation and implementation of BBP 3.0, DoD is facing several other trends.
The TechAmerica Foundation interviewed dozens of military procurement and program officials for its annual effort and found that nearly unanimously the services say smaller contracts are better.
Part of the Better Buying Power initiative was to encourage more competition, and it seems like the Defense Department is listening.
“You do not see as many large, single award contracts out there, at least in the standalone mode. We are seeing a lot more IDIQ, GWAC types of contracts with many, many task orders. So the companies that don’t have these large vehicles to go after the task orders are going to be locked out of these market places for as many as 10 years,” said Gerry Robbins, the team lead for this year’s TechAmerica defense IT market forecast. “I’ve heard this recently, time and time again, they will begin to consolidate the contracts. They have too much management going on. It’s too hard to manage the contracts, and too many that essentially are redundant and you can buy basically the same thing off a variety of vehicles. So squeeze the number of contracts down. Again, the results are going to be industry in some areas are going to be losing because the contracts are going to dry up and go away.”
Robbins said small businesses are likely going to be the biggest beneficiary of this move to small task orders. DoD announced recently that it met its small business goal of awarding at least 23 percent of all prime contracts to small firms in 2014, which means the government likely will met its small business goal for 2014 too.
Seeing the benefits of jointness
Robbins said another related trend is DoD recompeting contracts sooner. He pointed to the ENCORE II vehicle as a perfect example with the RFI coming out two years before the current contract expires.
The Air Force also is taking an interesting approach where it is maximizing competition, reducing emphasis on past performance and, in some task orders, almost eliminating the past performance section entirely and instead weaving it throughout the technical volume. He said there also is less of an emphasis to name key personnel on the contract.
Another big trend that showed up across all the military services is a big push for open systems and open standards. McFarland said open systems and interoperability are key ingredients to most DoD acquisitions.
Another trend that has popped up is the fact that the Joint Information Environment (JIE) is coming, but more information is needed to understand it. TechAmerica heard this from both the industry and some in the military.
At the same time, however, the services are more open to doing things together, whether it’s enterprise email or cybersecurity through the Joint Regional Security Stacks.
And of course, budget and sequestration concerns are driving a lot of these trends.