The Department of Defense (DoD) is addressing an agency-wide concern with the current use and future of GSA Schedules. DoD officials are working with the GSA to explore new options for contracting. In light of recent budget cutbacks, the looming threat of sequestration, and task forces dedicated to eliminating redundancy in procurement across the department- contracting is at the forefront of reform.
The DoD is executing a pilot program exploring the use of different types of contracts for different procurement opportunities. Currently the DoD is somewhat restricted to signing fixed priced contracts. Fixed cost contracts naturally run the risk of wasted funding and contractors not using the most cost-effective strategies. One method currently being explored within GSA Schedules for the DoD is a cost-reimbursement method. This method would require contractors to cover costs up front and provide incentives to complete a service quickly and at the lowest cost. Understandably the cost-reimbursement method would be unfeasible with many DoD contracts, but for other service oriented contracts could save the department money.
According to the DoD’s FY13 Procurement Request, Army, Navy, Air Force, and Defense wide budget lines have been reduced by $544 million, $791 million, $794 million, and $927 million respectively. Regardless of the potential for further cuts from sequestration, the DoD is proactively engaging in acquisition reform to survive these procurement cuts.
Acquisition reform at the DoD is proving especially challenging in the face of new technology. The antiquated acquisition model prevents the department from getting services quickly. As technology moves at the speed of light, the DoD acquisition model operates at a snail’s pace, but the coming months will be crucial for contractors as the department embarks on reform and even making procurement process automated.
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