Last week, DoD issued its implementation directive for BBP 3.0 (Better Buying Power Initiative). Although 3.0 was announced last September, the specific implementing instructions took awhile to develop. The Department is concerned that the technological superiority of the US is being challenged by potential adversaries in ways not seen since the cold war. Dollars spent on readiness (e.g. fighting wars) is reducing dollars available for research and development. BBP 3.0 attempts to reverse that trend by partnering more with industry to bring innovation into the Department.
Over the next few days, we will be presenting aspects of the implementing guidance that might have the most direct impact on Government contractors. The guidance itself is 33 pages and much of it pertains to internal affairs. However, there are some tantalizing tidbits that should improve life for Defense contractors.
The first initiative we want to address is the removal of unproductive requirements imposed on industry.
- Industry has longstanding concerns about statutory requirements to submit and resubmit cost and pricing data. DoD has identified some pilot approaches that it will test to reduce the need for unnecessary cost and pricing data submissions.
- Industry has indicated uncertainty in their transactions with the Department on commercial item acquisitions. DoD has initiated several actions to streamline and accelerate the Commercial Item Determination process, including issuing policy guidance, increasing training and implementing analytical support tools.
- In the area of EVM (Earned Value Management) industry has raised concerns that EVM is sometimes applied to inappropriate contract types. Industry has also requested that the dollar threshold for compliance reviews be increased. DoD has now increased that threshold to $100 million which is expected to save contractors $5 million per year as well as allow the Government to re-position some of its staff to more important things.
Some of the specific actions that DoD will undertake to reduce unproductive requirements imposed on industry include
- Initiate a pilot program to demonstrate and quantify impacts of reducing repeated submissions of cost or pricing data (need to weigh reductions against the fear of defective pricing)
- Revise FAR 15.407-1(c) to eliminate the requirement that a contracting officer shall request an audit if a contractor voluntarily disclosed defective pricing (less work for DCAA)
- Submit a legislative proposal to revise the definition of the term "commercial item" to eliminate items and services merely offered for sale, ease, or license.
- Develop an actionalbe plan to establish Cost and Pricing Centers of Expertise to facilitate Commercial Item Determinations (these Centers of Excellence will reside within DCMA)
- Develop an actionable plan to assess the benefits of streamlining EVMS operations and centralizing EVMS competency and improve consistency of EVMS implementation.