The Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics recently issued a directive on the implementation of Better Buying Power (“BBP”) 3.0, the latest iteration in Under Secretary Frank Kendall’s effort to increase the productivity, efficiency, and effectiveness of Department of Defense (“DoD”) procurement. While BBP 3.0 reinforces prior BBP initiatives more than it reinvents them, the directive indicates a stronger emphasis on innovation, technical excellence, and product quality. Many of the new initiatives could have significant impacts on the acquisition process.
Though a number of BBP 3.0 initiatives are aimed at increasing DoD access to commercial innovation, some may have a more constrictive effect. For example, in an effort to “increase the productivity” of contractor Independent Research and Development (“IR&D”) programs, BBP 3.0 calls for the creation of new guidelines requiring both DoD endorsement prior to project initiation and continuous oversight through annual written reports. With regards to contract pricing, the BBP 3.0 directive seeks to prevent contractors from taking into account promised future IR&D expenditures when bidding for competitive procurements. The directive also proposes development of a revised DoDI 5000.02 increasing cybersecurity responsibilities to better protect unclassified technical data throughout product lifecycle, including down through the supply chain. Though driven by an important goal, this may restrict technology transfer between primes and subcontractors and increase costs devoted to cybersecurity.
BBP 3.0 also attempts to facilitate increased utilization of commercial items through workforce training on non-traditional procurement vehicles – such as FAR part 12 and Other Transaction Authority (“OTA”) – coupled with potential legislative or policy changes. The latter, however, will likely be in conjunction with ongoing efforts to add a new section to DFARS part 215.4 entitled “Evaluating Price Reasonableness for Commercial Items,” which, based on a February memorandum by DPAP Director Shay Assad, we expect to encourage Contracting Officers to more frequently request “other than cost and pricing data” when making price reasonableness determinations for commercial items.
Whether BBP 3.0 will succeed in tapping into the commercial sector’s well of innovation remains to be seen. Industry should continue to closely monitor these initiatives as they are implemented across the defense acquisition marketplace.
