DOD aims for more efficient procurement through Better Buying Power 2.0


The Defense Department must further reduce the cost and time it takes to develop and procure every product it buys and service it pays for, said Under Secretary of Defense Frank Kendall.

Kendall, speaking at a press conference, said DoD will increase the efficiency of its operations and remove burdensome regulation through an update to its Better Buying Power program, a set of guidelines for encouraging competition and reducing price in DoD contracts.

The new BBP 2.0 upgrade, which goes into effect January 2013, expands the practices to include enforcing mandatory affordability caps, using contracts to incentivize production cost decreases over time, reevaluating costs during product lifecycles, and internal reviews to eliminate unnecessary DoD restrictions.

Kendall said about half of the 36 initiatives in BBP 2.0 are new and that the major focus areas are controlling costs through the product lifecycle and reducing the delays in current programs.

High costs, red tape and unfeasible production schedules can cause major delays for DoD weaponry and equipment. "I'm very unhappy," said Kendall, "with how long it takes us to get products to the field.  It's taking much too long."

"One of the things I'm motivated by is the remarkable constancy of our poor performance," Kendall said. DoD will also start to monitor its own performance in January, but Kendall says this data will need a few years to accumulate to provide actionable information.

Deputy Secretary of Defense Ashton Carter, speaking at the same conference, said the original efforts were aimed at the approximately $400 billion DoD spends on goods and services annually. Carter says BBP 2.0 will help DoD meet the Budget Control Act cuts of $487 billion over 10 years.

DoD has announced successes from its existing BBP processes, including a should-cost analysis savings of 15 percent for the F-22, a $2 billion savings from the Navy changing its Ohio-class submarine replacement program, and small business participation has led to a reduction in production time and costs for the $2.7 billion the Army spends on ammunition like artillery and mortar shells.

For more:
download the memo announcing and explaining BBP 2.0
read a transcript of the press conference
see the DoD BBP fact sheet (.pdf)

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