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The government’s goal orientation in its development and procurement pursuits is
provided in the guiding principles of the Federal Acquisition Regulation:
The Federal Acquisition System will—(1) Satisfy the customer in terms of cost,
quality, and timeliness of the delivered product or service by, for example—(i)
Maximizing the use of commercial products and services; (ii) Using contractors who
have a track record of successful past performance or who demonstrate a current
superior ability to perform; and (iii) Promoting competition; (2) Minimize
administrative operating costs; (3) Conduct business with integrity, fairness, and
openness; and (4) Fulfill public policy objectives. (FAR, 2004, Part 1.102)
This is in concert with the opening quote above from DoD Directive 5000.1, but goes
a bit further by describing the desired nature of acquisition transactions. It can be assumed
that there is often significant goal incongruence in public-private outsourcing relationships:
the government seeks the best possible value of goods and services for the least cost to the
taxpayer, while private industry typically seeks to maximize profit and avoid competition. But
such fundamental goal differences notwithstanding, this buyer-seller partnership has
historically yielded supreme American military capability, as well as profit for shareholders.
Of course, the two questions often asked are whether we have purchased this capability at
the best price, and whether the equipment, supplies and services get into the hands of our
military in a timely manner.
B) Contracting and Project Management
Contracts are the governance mechanisms and transaction vehicles used to facilitate
development or procurement expenditures. Guiding the choice of contracts is the Federal
Acquisition Regulation (FAR) and its DoD supplement, the Defense Federal Acquisition
Regulation Supplement (DFARS). The FAR consists of over 1900 pages that codify uniform
policies and procedures for acquisition by all executive agencies of the US government.
The DFARS adds over 1100 more pages of agency-specific policy and procedures to be
followed by the Defense department in its contracts and purchases. Authority for the award
and administration of government contracts is vested in warranted contracting officers. They
typically reside in service-specific acquisition centers: organizations within larger “systems
commands”∗ usually organized by commodity item, such as communications and
electronics, aviation, and armaments, etc.
The DoD uses project management techniques (GANTT Charts, Critical Path
Methods, PERT, etc.) as a methodology to conduct its outsourced product development
efforts, recognizing the unique and temporary nature of many projects. Project
management provides for a single point of contact, the program manager, who is the major
force directing systems through their evolution and lifecycle: including design, development,
production, deployment, operations and support, and disposal. The program manager (PM)
has management authority and accountability for all business and technical aspects of a
specific program.
∗ Also service Inventory Control Points and Defense Supply Centers.
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