Oct. 6, 2015 —
Data-driven acquisition and procurement
policies are creating savings in production and development programs, lowering large-program
costs and moving contract costs and management in positive directions, the
Defense Department’s acquisition chief said this morning.
Frank Kendall, undersecretary of defense
for acquisition, technology and logistics, discussed his third annual
Performance of the Defense Acquisition System report during a DoD acquisition
event hosted here by Defense One.
“I believe in using data to
inform policy, … so what I've been trying to do for the last several years is
have a more data-driven set of acquisition policies,” Kendall said in his
In 2010, Kendall, working with
then-acquisition undersecretary Ash Carter, created the first version of Better
Buying Power, the implementation of best practices to strengthen the
department's buying power and improve industry productivity.
Better Buying Power
From 2009 to 2011, Carter, now
defense secretary, was undersecretary of defense for acquisition, technology
and logistics with responsibility for DoD’s procurement reform and innovation
“Together we had put together a
cell … [whose work] was responsible for a lot of the data” represented in the report, Kendall
“We’ve grown that body of work
every year, and I think we've gotten to the point after several years of
putting policies in place [and] trying to learn from what we've done that some
results are starting to … suggest we're headed in the right direction,” he
The acquisition chief also gave credit to the thousands of
people in government and industry who are making possible the progress documented
in the report.
Also this year, Kendall’s office is publishing a Compendium of Program
Manager Assessments -- individual reports of program managers from major
programs -- “to give the community, in Washington in particular, a
chance to look at what real life in the trenches of acquisition is like,” Kendall
During his remarks, Kendall went through
several charts from the report and commented on the department’s progress in
several areas. Referring to a chart on production, Kendall called the positive
trend a “pretty good estimator of what's actually happening in unit costs in our programs,” and
added that the department is better at predicting how production will go than
it is at predicting how development will go.
“There's less uncertainty, and you see that reflected in
results, which are much better [for production] than they are for development,”
Kendall said the focus on
development distracts from other things that matter in acquisition. “Production
and sustainment are where almost all the money is in defense acquisition,” he
In large part because of a Better Buying
Power initiative called “should-cost management,” cost growth on major programs
generally is at or better than historical levels, Kendall said.
For example, he added, more programs are
showing savings relative to initial baselines than in the past, major program
cost growth in two-year increments has a downward trend, and contractors for
major programs are doing a better job of meeting their contract cost targets.
Should-cost management is separate from budgeting numbers,
“The idea is to do better than
the budget, and we're seeing some significant improvements here. This is
statistically significant data that shows that the fraction of our programs in
development showing savings has gone up pretty significantly,” he said,
adding that the report shows similar results for production.
“I think that can be attributed,
at least in large part, to our change in emphasis throughout the workforce on
should-cost and the idea that it's our job to get costs down, not just to stay
under our budget or even just to spend the budget,” Kendall said.
Addressing competition, or the
percentage of DoD awards that are competitive, Kendall said he’s encouraged by
the trend in the last year but “worried about what the budget climate in fiscal
year 2016 is going to do to us.”
When budgets get tight and the
department is spending less money, there are fewer opportunities to compete
contracts, Kendall said. He noted that the Obama administration has emphasized
small business, and added that he would like to see more Defense Department
contracts go to small businesses.
“In general, I think we're at
least holding the line there, and more recently moving in the right direction,”
(Follow Cheryl Pellerin on Twitter: @PellerinDoDNews)