The Defense Department’s recently announced measures to boost competition in contracting are aimed at lower-dollar awards and service contracts, where there is the most room for improvement.
Dick Ginman, director of defense procurement and acquisition policy, told reporters at the Pentagon on Friday that “this is not a discussion about how do we compete the major weapons systems–those kinds of programs have had significant amounts of review. This is really about how do we drive competition at the field level, how do we get competition done at a lower level.”
Last year, 57 percent of all dollars contracted by DoD were awarded competitively, down from an average of about 60 percent over the past decade. Whereas Better Buying Power and other initiatives have sought to increase competition, an Aug. 21 memo signed by Pentagon acquisition chief Frank Kendall notes over the past four years “we have experienced a declining competition rate, and we must take action to reverse this trend.”
In seeking ways to address the problem, Ginman said there are certain categories of contracts where little can be done to boost competition. Some contracts are statutorily required to go to a certain company, some are foreign military sales where the buyer has requested a certain company’s product, and others are major weapons systems where there is only one responsible source. If those contracts are taken out, the rate of competition jumps from 57 percent to 77 percent, he said.
A closer look at the remaining non-competitive awards reveals more work to be done “certainly at the smaller dollar level, and there’s more opportunity in services. For the dollars that we don’t compete…it’s probably a third to a fourth of what we could go get competitively that’s currently not being competed is product and somewhere between two-thirds to three-fourths of what’s not being competed is in services.”
In many of those cases, the requirements documents, statements of work, requests for proposals, and the ultimate contract award are reviewed at a much lower level, never coming before Kendall or his counterparts in the military services, Ginman said. The acquisition of aircraft carriers, fighter jets and other major systems are carefully scrutinized, but “we’re really trying to get to the ones that are significantly below that, and how do we do a better job?”
Asked if the Pentagon needed any new laws, or the removal of any existing laws, to allow for more competition, Ginman said he believes he has the right contractual tools and the right workforce to get the job done. He noted that Better Buying Power 2.0’s tagline is “a guide to help you think,” and he said the whole point of the memo is “getting people to think through what are you doing and why are you doing it.”
“The key to all of this, it’s not to think, gee whiz, we’re going to have a checklist, and just do it this way–if I could do it that way, I’d take the humans out of it and I would automate the system,” Ginman said. “This is art more than it is science. You’ve got to stop and think, what is my business plan? What is my strategy?…What am I doing today that’s going to enable me to compete 20 years from now” during sustainment phase, or to create an open systems architecture and introduce new capabilities as they become available in the future.
Ginman said he hoped the acquisition workforce would not turn the memo into another bureaucratic exercise. Some initiatives outlined in the memo should apply to all programs, such as the requirement that ideas within a sole-source contract’s Justification and Approval document for reducing barriers to future competition should be adhered to in future contracts. But other requirements, particularly that even sole-source programs should put out a request for information before awarding a contract to the sole responsible source, has industry worried about unintended consequences of additional red tape (Defense Daily, Aug. 29).