The Federal contracting process should enable a government organization to select a contractor that will become a true business partner. Today’s source selection processes provide opportunities to evaluate how well a contractor proposes a solution; however, the government’s processes, policies, and tools are ill suited to evaluating how well a contractor can be expected to deliver on its proposed solutions. Like most government agencies, the Department of Defense (DoD) relies too heavily on the contractor’s proposal—what the contractor claims it can do—versus evaluating past performance to determine what a contractor has proven it can do. The lack of adequate past performance data and processes to effectively evaluate the qualifications of companies, including examples of the contractor’s trustworthiness and key personnel, has contributed to a series of program failures, cost overruns, and schedule delays. Without adequate data and processes to address these issues, the DoD increases its risk of duplicating previous program failures and missing the opportunity to capture this information to prevent repeated mistakes with the same contractor.
By Ginny Wydler, The MITRE Corporation, Su Chang, The MITRE Corporation, Erin M. Schultz, The MITRE Corporation
Research shows that continuing competitive pressure applied during development and production leads to better industry performance, often at reduced cost. However, the entrenched practice of one-time competition for an entire program life-cycle often endows the winner with a very strong monopolistic power that lasts for decades. This paper describes continuous competition as leverage to acquire more effective results. It offers an alternative method for continuous competition—Multi-sourcing with Distributed Awards—under an applicable set of conditions and an appropriate business case.1
Program managers are advocates by necessity. When taken to the extreme, program advocacy can result in the suppression of adverse information about the status of a program. Such was the case in the Navy’s A-12 program. In “A-12 Administrative Inquiry,” Beach (1990) speculates that such “abiding cultural problems” were not unique to the Navy. To test that assertion, this article examines cost overrun data on 64 completed acquisition contracts extracted from the Defense Acquisition Executive Summary database. Cost overruns at various contract completion points are compared with projected final cost overruns estimated by contractor and government personnel. The comparison shows that the overruns projected by the contractor and government were excessively optimistic throughout the lives of the contracts examined. These results were found insensitive to contract type (cost, price), contract phase (development, production), the type of weapon system (air, ground, sea), and the military service (Air Force, Army, Navy) that managed the contract.
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Authors: Chad Dacus and Col Stephen Hagel, USAF (Ret.)
Conceptual models based on economic and operations research principles can yield valuable insight into defense acquisition decisions. This article focuses on models that place varying degrees of emphasis on each objective of the defense acquisition system: cost (low cost), schedule (short cycle times), and performance (high system performance). The most appealing conceptual model is chosen, which the authors posit that, if adopted, would lead to shifts in priorities that could facilitate better outcomes, as empirical results suggest. Finally, several policy prescriptions implied by the model are briefly explored.
Learning curves are useful for assessing performance improvement due to the positive impact of learning. In recent years, the deleterious effects of forgetting have also been recognized. Workers experience forgetting or decline in performance over time. Consequently, contemporary learning curves have attempted to incorporate forgetting components into learning curves. An area of increasing interest is the study of how fast and how far the forgetting impact can influence overall performance. This article introduces the concept of half-life analysis of learning curves using the concept of growth and decay, with particular emphasis on applications in the defense acquisition process. The computational analysis of the proposed technique lends itself to applications for designing training and retraining programs for the Defense Acquisition Workforce.
Commonly accepted economic theory suggests that workers are rational actors and make decisions that will maximize expected outcomes. As such, managers should be able to influence behaviors to meet business goals by manipulating the expectations of outcomes. Conversely, social science practitioners suggest that workers often make decisions that are irrational. Knowledge workers are a growing sector of the workforce and are the backbone for entire federal agencies. The acquisition community falls within this category. Identifying factors that influence the performance of knowledge workers may be critical to maintaining high levels of organizational performance. This research focused on identifying the factors that encourage knowledge workers to maintain high levels of performance.