McNew & Associates, Inc. Blog

Assad Outlines Contracting Strategies to Lower Pentagon Spending

According to a top Defense procurement official, the Defense Department’s new approach to acquisition will mean more competition and fixed-price contracts along with more incentives for contractors to do a good job. 

An article written by Tom Spoth explained Shay Assad’s outline of contracting strategies that will lower Pentagon spending.

Assad said there should be more competition for contracts, especially for services, which account for 53 percent of Defense contract spending. He said the department would “reduce or eliminate” open-ended sole-source contracts, even those that have already been negotiated.

“We’ll review those when they come up for options,” Assad said. “We are going to examine each and every one of them to say, when can we open that contract for competition?”  One way mentioned to foster competition would be increased use of contracts negotiated by other agencies, most notably the General Services Administration.  Defense also wants to reward contractors that effectively manage their subcontractors and reduce overhead costs.

The Pentagon will move away from time and materials contracts and show a preference for fixed-price contracts.  The Pentagon also wants to increase small-business participation in defense contracting.  That could mean mandating that prime contractors delegate a certain amount of subcontracting work to small businesses

Read the entire article at: “Assad outlines contracting strategies to lower Pentagon spending” [Acquisition>>Policy] June 30th, 2010.

McNew & Associates, Inc.                                                     

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