Acquisition professionals’ commitment to continuous improvement could help the military services adjust to smaller budgets, a senior defense acquisition leader said May 20.
Under Secretary of Defense for Acquisition, Technology and Logistics Frank Kendall spoke to Defense Logistics Agency employees at the McNamara Headquarters Complex during an update on the defense budget and the Better Buying Power 2.0 initiative.
Better Buying Power 2.0 is the second phase of DoD’s efforts to strengthen its buying power and improve industry productivity. Better Buying Power 1.0 began in 2010 with 23 goals, some of which are now integrated into DoD’s business processes. Others are part of 2.0, which includes 36 goals in seven focus areas.
“The whole idea is about controlling costs and being conscious of costs,” Kendall said, adding that affordability is more important than ever.
“The departments kill a lot of programs, because they find out after several years and several billion dollars that they were unaffordable,” he added. “We have to limit our programs to the things that we know we can afford.”
Kendall said acquisition professionals must work harder to determine what an item should cost rather than blindly going with a price that’s within budget. That means analyzing all aspects of the contract and looking for specific areas in which costs can be lowered.
“You look for places where you can save money and do better than what’s been done historically or previously. It’s about being aware of and focusing on the cost,” he said.
Promoting competition within industry can also reduce costs, he said.
“Competition works better than anything to reduce cost, whether it’s through reverse auctions, regular auctions or any other means. Competition does work,” he stressed.
Aligning profit with performance is another way acquisition professionals can encourage productivity, he continued. Rewarding manufacturers that provide material at lower prices, earlier than scheduled or more technically advanced than planned, for example, benefits the Defense Department while encouraging industry to be more innovative.
Better Buying Power 2.0 is about continuously improving processes as well as building an acquisition talent pool and improving employees’ skills, Kendall said.
“It’s about not accepting the status quo, challenging the way you do business, rethinking it, looking for better ways to do things, measuring performance, and then making adjustments,” he added.
Kendall said consideration has already been given to Better Buying Power 3.0, which he said he expects to focus more on equipping warfighters with the latest technology. The work acquisition professionals do to save money through Better Buying Power 2.0 will help make funds available for technology developments.
“So you are an enabler for the other things the department does. Every penny you can save has a very good place to go in terms of getting us more capability,” Kendall added.
The town hall was followed by three focus groups in which DLA Acquisition employees discussed how they can improve workforce development, program management and industry productivity.
Under Secretary of Defense for Acquisition, Technology and Logistics Frank Kendall describes how employees can contribute to Better Buying Power 2.0, during a town hall at the McNamara Headquarters Complex May 20. Photo by Teodora Mocanu