The government and industry are in the early stages of understanding how to work together on performance-based service contracts that hold the promise of more cost-effective acquisitions and reduced project delays.
As they work to improve the solicitations they offer, intelligence agencies want industry to give suggestions on how to improve the process, officials said at an intelligence and national security forum on Wednesday.
The move by agencies to buy IT as a service instead of purchasing and then managing their own desktops and IT systems is a shift that has broad implications on the acquisition process, said Kevin Meiners, assistant director of National Intelligence for Acquisition Technology and Facilities with the Office of the Director of National Intelligence.
“We have a year or two under our belt with service contracts. We would love to hear feedback [from industry] about what works,” he said during a session on public-private sector dialogue at the Intelligence & National Security Summit on Wednesday. The summit was co-hosted by AFCEA and INSA Sept. 9 and 10 in Washington, D.C.
“There is a big push toward outcome-based acquisition,” said Corin Stone, executive director with the National Security Agency. “We believe we can’t do anything we do without partnering with private industry. We have to operate at cyber speed to stay ahead of tech-savvy foreign adversaries,” and leveraging industries’ skill set is pertinent to fulfilling that mission, Stone said.
But the move to a performance-based model is a major cultural shift for everybody, so it will be an evolutionary change, she noted. Performance-based service contracting emphasizes that all aspects of an acquisition be structured around the purpose of the work to be performed as opposed to the manner in which the work is to be performed. It also seeks to eliminate broad, imprecise statements of work that prevent an objective assessment of contractor performance.
That’s why the NSA has opened a dialogue with partners to make sure schedules and requirements are met. For instance, the NSA has the Business in a Minute program, a big networking conference held twice a year with industry partners. Plus, there are joint NSA and AFCEA mission and acquisitions symposiums, which give industry better information on mission needs.
Officials at the Defense Intelligence Agency are hoping to advance the conversation on outcome-based acquisition with industry either through formal solicitations or informal means.
DIA has put out a number of performance-based solicitations, said Suzanne White, the agency’s chief of staff. “Frankly, we’ve been disappointed that we haven’t been working with industry more closely on what those outcomes might be.” However, “we are hoping [ongoing] solicitations will allow us to do more back and forth on very particular requirements and it seems to be a shared challenge across industry and DIA,” White said.
The DIA’s acquisition department is training its contracting officers to think differently about how they articulate requirements. “But we are also looking for industry to help us define what those measures and outcomes are,” she said.
One of the biggest challenges DIA encounters as it moves toward a performance-based service approach is finding additional expertise in procurement and technology, those people “who can put their brains on the hardest issues,” White noted.
At the National Geospatial-Intelligence Agency, officials realized an enterprise architecture, which unifies corporate decision-making between the business and IT, was instrumental for developing performance-based metrics for projects, said Ellen McCarthy, NGA’s former chief operating officer, who reflected on best practices implemented at the agency. “We had separate architectures for separate capabilities,” said McCarthy, who is now ODNI’s director of intelligence community activities. It is difficult to align processes throughout an agency if requirements and capabilities do not match with other functions throughout the organization. So there was “a focus on bringing folks together for a unified approach,” White said.
Meanwhile, cost remains a concern. Joan Dempsey, executive vice president for defense and intelligence at Booz Allen Hamilton, and the moderator for the session, noted that 60 procurements have been cancelled over the last few months, which incurs costs for industry and even hidden costs for government. How can industry and government work together for a more predictable acquisition system so industry can give the best response? she asked.
Changing the way program managers are measured on their effectiveness could help bring more predictability to the acquisition process, Meiners said. Currently, program managers are rated on cost and performance of a contract after it has been awarded. If a program is delayed long enough, the controller takes the money away. There has to be a way to measure a program manager’s effectiveness prior to a contract award, he said.
Officials lamented the unsteady stream of funding for their programs. The DIA has incorporated scenario planning to instill more predictability in the acquisition process, White said. Functional and requirement owners are now required to describe how they plan to better manage projects for the agency and industry partners to avoid projects delays and costs overruns.
“We are hoping that will even out the uncertainty we’ve experienced over the last few years,” White said.
Dempsey said that a stable budget would go “a long way” toward helping agencies deal with challenges.
“Never in a million years did I think if I had a genie in a bottle and three wishes, one would be a stable budget environment,” Dempsey said.