Defense Secretary Gates Calls for Procurement Reform...and He Puts Competitive Bidding at the Forefront of the Pentagon's New Priorities

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Big news out of the Pentagon as Robert Gates, the Secretary of Defense, has issued a new report calling for big changes - fundamental changes - in the way the military does business (and it is big, big business - over $400 billion annually!). Secretary Gates and Ashton Carter - who is the Undersecretary of Defense for Acquisition, Technology and Logistics - have just issued a 23-point memorandum, outlining a plan for reforming the DoD (Department of Defense) and its acquisition processes.

There are five principles that will drive the DoD's procurement reform:

1. Setting goals for affordability and control cost growth;
2. Incentivizing productivity and innovation in industry;
3. Promoting real competition;
4. Improving tradecraft in services acquisition; and
5. Reducing non-productive processes and bureaucracy.

You can read coverage of the announcement of this new acquisition reform strategy from a variety of sources below (along with the linked articles at the bottom of this post):

• FCW: http://fcw.com/Articles/2010/09/14/Gates-and-Carter-outline-acquisition-reform.aspx?s=fcwdaily_150910&Page=2&p=1
• Government Executive: http://www.govexec.com/story_page.cfm?articleid=46104&dcn=todaysnews
• Fierce Government IT: http://www.fiercegovernmentit.com/story/carter-memo-calls-increased-contractor-oversight/2010-09-14.

You can read the complete memo by clicking the link below:
http://www.defense.gov/news/d20100914acquisitionprocurement.pdf.

By analyzing both the announcement and the coverage, there is a clear emphasis on improving - and really, no less than reinventing - the DoD's massive contracting operations. Secretary Gates has clearly called for competition - and competitive bidding - to be a major part of this reform effort. Thus, there will be a new emphasis on the use of reverse auctions for the many, many categories of goods and services that the U.S. military buys around the world.

We'll be monitoring this area closely here at the the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/, but suffice it to say, when the boss calls for increased use of competitive bidding in the world's largest government agency, one needs to take notice!

David

From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/ +++++++++++++++++++++++++++++

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• Pentagon unveils new actions to slash costs (marketwatch.com)
• Pentagon cost-cutting drive faces uphill battle (reuters.com)
• Pentagon vows to cut waste in contracts (alternet.org)
• UPDATE 4-Pentagon launches drive to "do more without more" (reuters.com)
• Pentagon to Unveil Savings Guidelines (online.wsj.com)
• Gates Seeks to Tie Contractor Profit to Cost Controls (businessweek.com)
• Pentagon starts to bargain hunt (seattletimes.nwsource.com)
• Pentagon starts to bargain hunt (sfgate.com)
• Gates Starts Detailing Proposed Defense Cuts (huffingtonpost.com)

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