Kimble King (foreground) and Ron Freeman repair a M548 in Anniston Army Depot’s Combat Vehicle Repair Facility. (U.S. Army photo by John Makamson, U.S. Army Materiel Command.)
This is the first in a series of articles from the Deputy Assistant Secretary of the Army (DASA) for Services.
The Army spends more than $50 billion annually to buy essential services for Soldiers and their families, an amount equating to more than half of the Army’s yearly acquisition spending. The Army and the rest of DOD procure a wide variety of services through contracts with commercial vendors—services as simple as printing, as complex as combat vehicle repair, and as technically sophisticated as helicopter pilot training and medical treatment of Soldiers. Federal acquisition regulations define services as procurements that directly engage the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply.
In May, six months after establishment of the DASA for Services, Secretary of the Army John McHugh directed the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASAALT) to develop a plan that would optimize services acquisition and reduce costs by 5 percent. In September, McHugh approved the plan, “Optimization of Army Services Acquisition Implementation Plan.” It provides the blueprint for a new approach to the execution of services acquisition, addressing four major areas:
- The scope of the new approach.
- Development of a supportable governance structure with well-defined approval and delegation processes.
- Management controls and visibility of cost savings.
- Developing a qualified workforce.
The plan does not formally apply to services obtained for construction, research and development, or in support of programs managed by program executive offices (PEOs) and subject to a milestone decision review. The processes and requirements described are mandatory for Army-funded service acquisitions equal to or greater than $10 million, a lower value threshold than ever.
It is important to note that the plan’s underlying concepts and procedures apply to the acquisition of services at all dollar values. The plan sets minimum criteria for internal processes and leverages them to ensure the desired visibility. The criteria include the designation of a Command Service Executive, the use of multifunctional integrated process teams, standardized processes employed by the requiring activity for services requirements, and application of the portfolio management concept.
The governance structure provides a life-cycle management and oversight architecture for services acquisition. (The portfolio management concept, which is integral to the governance structure, will be discussed more fully in the next article.)
To establish increased management controls and visibility, a data call was conducted in spring 2011. A significant accomplishment in improving services acquisition, it provided the first-ever Army baseline of services requirements by command and by portfolio, as well as a requirements forecast and savings projections. All 32 Army Commands, Direct Reporting Units, Army Service Component Commands, and the acquisition PEOs identified service requirements valued at $10 million or more for FY12 through FY16.
“The processes and requirements described are mandatory for Army-funded service acquisitions equal to or greater than $10 million, a lower value threshold than ever.”
The commands reported 1,047 different service requirements valued at $109 billion. They also identified how they would use DOD better buying power techniques and other measures to achieve the 5 percent reduction in cost of services. They identified $11.4 billion in savings for that period, a potential cost reduction of nearly 10 percent.
The initial 2011 data call projections will continue to be tracked through quarterly and semiannual reporting. (Reporting details of the implementation plan will be discussed in the final article.)
The plan clearly establishes accountability of commanders for the services that they are buying, while describing periodic peer review processes. The Annual Requirements Execution Review, intended to assess the success of cost-saving measures, is an example of this type of review.
The plan describes tools and training available to both acquisition and non-acquisition personnel that will enhance the conduct of services acquisition by improving the skills and understanding of the Army workforce members who will execute it.
Overall, the plan takes a comprehensive approach that addresses the need to reduce costs while maintaining mission capability. It relies on oversight and governance structure while establishing clear lines of accountability to those who procure services. The plan is an important step in the successful application of better buying power initiatives to Army procurement.
Next: The portfolio management concept.
For more information on the DASA for Services, visit https://www.alt.army.mil/portal/page/portal/oasaalt/OASA(ALT)%20Services%20(SAAL-ZV)%20and%20DASA-S.
- DASA for Services Staff
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