COST IS KEY
Which was, he said, his point to all of the services: to think about “what they were willing to pay for something as opposed to what they thought it would cost.” Te importance of doing that is not just to get the services to nail down the value of a capability to them, but also to provide industry insight into what the services need, Kendall said, which it can then use
“to make informed judgments about what to bid to us, and it gives industry a reason to bid above the threshold to give us more performance, to be innovative.”
EXPANDED ROLE
Representatives from URS Federal Support Services attended the 2014 Midwest Small Business and Government Contracting Symposium at the iWireless Center in Moline, IL, on May 7. Accord- ing to Kendall and Gansler, small businesses will have a big role to play in pushing the innovation that’s vital to helping the United States maintain its technological edge. (Photo by SFC Shannon Wright, ASC Public Affairs)
requirement and a production require- ment and a support requirement.”
Indeed, Kendall said, agencies and services have to “determine whether pro- grams are really affordable or not before they start them, so we don’t waste a lot of money on false starts.”
SHOULD-COST Kendall went on to say that one of “the most fundamental tools we’ve put in place for our managers is something called ‘should cost’ in BBP 2.0. “Te idea of
to achieve” those opportunities. Should- cost, he said, “applies to programs, it applies to service contracts, it applies to whatever we’re doing.”
Describing BBP 2.0 as a “never-ending process” of performance improvement, Kendall illustrated the kind of thinking he’s trying to change with the initiative. He was working with one of the services,
should-cost,” he continued, “is very
simple, and if you live in the corporate world, you understand this very well. Managers are responsible for their costs. You should be doing whatever you can while you’re trying to accomplish your mission to control your costs and drive them down. To do that, you have to understand your costs, you have to ana- lyze them and look for opportunities to reduce costs and set targets for yourself
92 Army AL&T Magazine
“basically buying an off-the-shelf heli- copter, and we could’ve gotten a small helicopter or a large helicopter…. Te large helicopter was going to give us bet- ter performance, but the small [one] was going to meet our threshold. I said that it might be the best value for us to get the large helicopter if it’s cheap enough. ‘How much more are you willing to pay for it?’ ” he asked the service. “And they would do a cost estimate. And I said, ‘No, that’s the wrong question. I don’t care what it’s going to cost. I care what you’re willing to pay for it. What is the value of it to you?’ ” he said.
With U.S. technical superiority in decline—the French, Gansler said, have the lead in night vision because they’re able to procure global and commercial products, and the Israelis have the lead in armor for similar reasons—it’s tremen- dously important that DOD leverage all the innovation and technical edge that industry can provide.
Kendall said he intends to find ways to better leverage industry’s independent research and development (IR&D), and that the next iteration of BBP would emphasize that more. “I’ve asked some of the larger companies to come in and brief me personally on their IR&D plans so that I can give them feedback,” Kendall said, “and I’ll have the service acquisi- tion executives with me when we do that.” BBP 3.0, expected this fall, will focus on getting DOD “back to our products and what we deliver to our warfighters,” Kendall said at the annual ComDef 2014 conference Sept. 3 in Washington. “It’s going to be about innovation [and] tech- nical excellence.”
Industry isn’t the only party that needs to be innovative, Kendall noted. Te services, he said, must use all the contract vehicles at their disposal to provide incentives for industry to develop better solutions. He noted that the next iteration of BBP
October–December 2014
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