CULTURE CHANGE: MEASURING ARMY CONTRACTING


TEST AND TEST AGAIN


Soldiers from the 82nd Airborne Division use the latest prototype of the Integrated Visual Augmentation System (IVAS) during a trench-clearing exercise in October at Fort Pickett, Virginia. A true culture change in Army contracting would require an acknowledgement of what can be measured or streamlined and what cannot. (Photo by Bridgett Siter, Army Futures Command)


is to provide expert services, but expert services are notoriously difficult to quantify. A recent article in the Journal of Behavioral and Experimental Finance defines a market for expert services or “credence goods” as one where there is “asymmetric informa- tion between the expert seller and his customer regarding the fit between the characteristic of the product and the needs of the customer” (e.g., experts such as auto mechanics, surgeons and attorneys). Tat article, “Credence Goods in the Literature,” provides this definition and outlines the two fundamental prob- lems in markets for credence goods, i.e., that the expert could fail to provide sufficient effort or provide more effort and time than needed without the customer’s knowledge.


Te way to monitor and improve KO performance is analogous to how one would evaluate other experts. KOs determine the content quality of contracts and the process for source selection,


lead negotiations and draft decision documents on claims that are quasi-judicial and require independent KO judgment. Each scenario is as novel as the requirements, and what’s best or fast- est isn’t ascertainable using any existing decision tree. It is hard to tell, both during and after contract formation, whether the KO did a good job. However, a KO’s poor performance may manifest in very consequential ways in terms of dollars and performance.


It is hard for non-experts to tell whether a KO exerted the right amount of effort, in the same ways that it is hard to tell whether an attorney billed too many hours. Rating a contract based on complexity beforehand will not provide someone an easy answer for how much effort is required, because the factors that create that complexity are often unique. It’s neither possible nor desirable to attempt to reduce the entirety of the contracting workload to something that one can determine upfront in terms of labor hours.


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Army AL&T Magazine Winter 2021


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