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GCN Home > 12/11/06 issue

DOD throws light on how it buys services

Seaport-e reflects Assad’s plan for greater transparency, efficiency

By Jason Miller, GCN Staff

The Navy’s Seaport Enhanced multiple-award contract might be just the test case for how the Defense Department plans to change the way it buys services.

The four-year support services contract, which is worth potentially $20 billion, provides transparency about the task orders and money being spent—both internally to the military services and agencies, and externally to more than 600 vendors.

“The Navy has been able to effect significant change by looking at all different elements to improve procurement,” said Peter Fogelsanger, director for Aquilent Inc. of Laurel, Md.

“They are not just looking at technology or policy, but the intersection of people and how ... they get their end customer and vendors to embrace processes,” he said. “Policies have to be consistent across the Navy, and technology is a huge enabler to make other things work well.”

Aquilent provides the Navy with an online procurement system for Seaport-e, which lets vendors interact with government more easily.

The Navy’s accidental pilot follows closely the larger plan Shay Assad, director of Defense Procurement and Acquisition Policy, has in mind.

Who buys what

Assad, speaking at a recent conference sponsored by the Contract Services Association of America of Arlington, Va., said he is focusing on getting information systems to the warfighter and managing the procurement processes more efficiently.

Assad’s office is identifying what services the military branches buy and will put them into portfolios. Defense officials will then decide on best practices to use for buying them, he said.

“All cards are on the table, and we will try to take the best approach,” Assad said. “We spend more on services than major weapon systems, so it is important for us to manage how we buy services and make sure we create competition.”

The amount DOD spends on services has steadily increased over the past decade. In fiscal 2006, the department spent $146 billion on services, including between $3 billion and $4 billion with the General Services Administration’s Federal Technology Service and $13 billion to $15 billion on GSA’s Federal Supply Service schedules, Assad said. DOD’s total procurement budget for 2005 was $268 billion, and for 2006 it will likely have only increased.

This isn’t the first time DOD has tried to improve the way it buys services. In fact, it has been an ongoing process since the mid-1990s.

Stan Soloway, a former DOD procurement official and now president of the Professional Services Council, an industry trade association in Arlington, Va., said this latest attempt by Assad is part of DOD’s evolving recognition that buying services is more complex and varied than previously thought.

More news on related topics: Acquisition / Contracts, Defense IT



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