DOD’s Better Buying Power – A Path to Meaningful Acquisition Reform

The U.S. Government spends nearly $500 billion every year on contracts, where purchases range from office supplies and automobiles to professional services, information technology, and complex weapon systems. The efficiency and effectiveness with which the government makes acquisitions increasingly determines mission success. Perhaps nowhere is this more important than at the Department of Defense (DOD), which accounts for over two-thirds of all federal contract spend­ing, and where sound acquisition enables mission accomplishment and saves lives. In 2010, DOD launched the first of its “Better Buying Power” initiatives designed to increase value for DOD’s acquisition investment, under the leadership of current Secretary of Defense Ashton Carter, then in his previous position as Under Secretary of Defense for Acquisition, Technology, and Logistics. Three iterations of Better Buying Power have been issued, most recently in April 2015 when Better Buying Power 3.0 was announced. The report released today from the IBM Center is one of the first full-scale examinations of the Department of Defense’s “Better Buying Power” initiatives. The report examines core initiatives of Better Buying Power, including achieving affordability and controlling costs, promoting competition, providing incentives, reducing bureaucracy, and improving services acquisition. For each of these core initiatives, the authors address the underlying premise, experience to date, and the challenges. The authors find that “Better Buying Power is a timely and instructive case in the challenges and opportunities of enhancing acquisition performance through a commitment to continuous improvement—to constantly seeking greater efficiency and productivity in the acquisition enterprise.” The report traces the origins, evolution, and broad impact to date of the Better Buying Power initiatives. The report focuses on five initiatives at Better Buying Power’s core: Achieving Affordability and Controlling Costs -- planning and execut­ing large, complex acquisitions that stay within budgets. Promoting Competition -- leveraging compe­tition to promote ongoing performance improvement and minimize risk. Providing Incentives -- using tools and methods to gain productivity and innovation from industry providers. Reducing Bureaucracy -- empowering frontline acquisition managers with responsibility and accountability. Improving Services Acquisition – strategically approaching how DOD buys services, which are now a major portion of DOD’s acquisition spend. The report sets forth lessons learned about imple­menting acquisition reform based on the Better Buying Power program, including: Acquisition matters across the agency – it is the business of nearly everyone. Reforms must be persistent to overcome “Business As Usual” forces, including scope creep. Consistent communication can help avoid the risk of varying interpretations from among acquisition stakeholders. Starting early and following through on key priorities – with realism and patience -- is crucial for success. Having good data for decisions leads to improved results– “knowledge is power.” Although Better Buying Power was launched within DOD, the report finds general applicability from the initiative, and makes three government-wide recommendations: encourage “agile” acquisition, improve services acquisition, and broaden partnerships with industry. We hope that government leaders who are interested in improving acquisition in their organization will find this report useful and informative.