A Presentation to
NCMA Pentagon
The Status of Better Buying Power
Stuart A. Hazlett
Deputy Director, OUSD(AT&L)
Defense Pricing
Defense Procurement and Acquisition Policy
8 September 2011
Better Buying Power Results
 Promote Real Competition
 Improve Tradecraft in Acquisition of Services
 Quality of the Deal
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Promote Real Competition
What we’ve done:
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Provided guidance for the development of Competition Strategies for review
Issued Departmental Guidance to conduct negotiations with all single bid offers based on cost or price analysis and
using non-certified data
Clarified guidance on 30 day re-advertisement on one offer
Promulgated a maximum practicable opportunity analysis tool to help Components achieve small business goals
What we are doing:
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Requiring PEOs and PMs to present their strategy to create and maintain a competitive environment for their
contractors at DAB and DAES reviews
Disseminating best practices to optimize small business participation across DoD
Modifying BBP guidance on 3 year re-competition requirement
Increasing emphasis on Mentor Protégé program and exploring other mechanisms for more non-traditional suppliers
Using the Peer Review Process to ensure that negotiated prices are fair and reasonable
Implementing open systems architectures and defining operational guidance for acquisition of data rights
Measures of success:
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The number of programs presenting competitive strategies at each Milestone
The increase in the number of small businesses and more "non-traditional" DoD suppliers to expand competition
The impacts on program cost resulting from the increased use of small businesses
Improvement rate of 2% per year for overall competition
Improvement rate of 10% per year for effective competition
Evidence of competitive strategies at DAB and DAES reviews
Reduced average time to field products/capabilities
Service examples of the successful use of open architecture and buying of data rights
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Improve Tradecraft
in Acquisition of Services
What we’ve done:
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Established senior mgr for acquisition of services and holding monthly meetings with component senior
managers and DPAP
Issued Directive detailing specific implementation guidance for the effort to standardize service taxonomy
Required OSD Office of Small Business Programs to review acquisition plans for services acquisitions
exceeding $1B, and to be members of the OSD peer reviews of services acquisitions
Developed guidance for establishing a taxonomy of preferred contract types in services acquisition
Employed standard templates for developing Performance Work Statements to improve contract
performance
What we are doing:
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Encouraging the use of Multiple Award/IDIQ contracts among small businesses, where suitable
Establishing market research teams within the senior manager for services construct at the portfolio
manager level to understand industry’s capabilities
Developing tools to assist requirements developers in creating better service contracting requirements
Measures of success
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Increased use of CPFF and CPIF contracts in services acquisition when no previous competition exists, with
evidence of knowledge gained informing future "Should Cost" estimates
Increased use of FFP contracts when competition already exists
Percentage of service contracts exceeding $1B that contain cost efficiency objectives
Percentage of multiple award service contracts exceeding $1B that are set aside for small business
Percentage of “one-bid” contracts relative to overall contracts and availability of fully negotiated pricing and
cost data
Component categorization
4 of service acquisition spend, with year-to year trend data
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Quality of the Deal
What we’ve done:
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Increased the use of FPI contract vehicles where appropriate
Taken advantage of highly productive acquisition strategy opportunities (i.e., LCS)
Asked Congress for block buy authorization for some programs
Issued guidance on progress payments of Fixed Price contracts
Published Cash Flow model for other than customary progress payments
Developed plan for collecting data/initiating pilot to improve industry IRAD return on investment
What we are doing:
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Working with industry to define win-win arrangements to drive productivity gains
Developing other opportunities for more efficient acquisition strategies (e.g., missile systems)
Holding production rates at economic levels (e.g. SDB II)
Challenging programs that are not affordable at economic rates
Reviewing Weighted Guidelines emphasizing the tie between profit and performance
Transitioning SSIP to a full DoD program with Navy still leading
Measures of success
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Lower costs in production and sustainment on programs
Percentage of Acquisition Strategies with distinct reward and incentive strategies
Cost savings from WG strategies
Number of fewer programs that overrun their cost targets
Number of improved cash flow opportunities that provide benefit to industry and taxpayer
Reinvigorated IRAD program with greater insight into link between funding and technology
Increased employment of FFP contracts
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