Set-Aside Alert exclusive:
DOD panel: Refocus small biz goals to fit warfighter mission
Sect. 809 panel urges “strategic” small biz procurement
70% drop in small biz actions; 290% rise in dollar value
A Defense Dept. advisory team charged with reviewing military acquisition recently made a strong critique of DOD’s small business activities, urging that small business goals be realigned to more closely support DOD’s warfighting mission.
The Section 809 Panel, created under that section of the National Defense Authorization Act of fiscal 2016, issued a 642-page Volume I report on its findings and recommendations.
The group advised that the DOD strategically refocus its small business policies and programs to prioritize DOD’s military mission and need for critical capabilities.
The panel identified numerous challenges in DOD’s current approach to small business procurements.
Overall, DOD aims to buy from small firms to meet “socio-economic policy objectives” and to “support the U.S. economy,” but not necessarily to support its mission, the report said.
DOD’s purpose in such buys is primarily to help meet the government’s 23% goal for small business procurements and its associated goals for women-owned, small disadvantaged, disabled veterans and HUBZone firms.
DOD’s current approach is strictly “dollar-goal-oriented” with “little focus on supporting the warfighter,” the panel noted, adding that DOD would be better served if it could strategically align its small business goals with its mission.
Currently, most of the products and services DOD buys from small businesses are “basic services and commodities,” and not the innovative products that DOD needs, the panelists said.
For example, small firms supply nearly 98% of the $2 billion in marine diving products bought by DOD; 94% of the $152 million in building maintenance and repair services; 94% of the $100 million in fruits and vegetables; and 90% of the $108 million in highway and road maintenance.
At the same time, small firms supply only 20% of the research and development services procured by DOD.
The problems with DOD’s small business procurements are multi-layered, including lack of a strategy and lack of infrastructure to support it. DOD needs to conduct better outreach, reduce red tape and shorten the length of time it takes to buy from a small business, the panel said.
While the DOD established Procurement Technical Assistance Centers (PTACs) to help small firms gain entry into the DOD market, many small firms are not aware of them. When the Section 809 panel interviewed 14 Silicon Valley companies, none were familiar with PTACs.
DOD’s lack of strategic direction in its acquisitions from small companies likely has contributed to a 70% drop in DOD small business contract actions from fiscal 2011 to fiscal 2016, the report said.
At the same time, the dollar value of DOD’s small business acquisitions has been robust, rising 290% during that period.
The report identified the Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) and Rapid Innovation Fund (RIF) programs as bright spots that should be expanded and provided with more funding. They were described as small business programs that help to meet DOD’s need to develop innovative warfighting technologies.
The panelists recommended that SBIR, STTR and RIF be placed under DOD’s Research and Engineering directorate, and not its small business programs office, along with other detailed recommendations.
The panel also advised a standardized and more broad definition of commercial items and commercial services, including Knowledge-Based and Logistics Management services.
There also are recommendations for DOD to stop using Earned Value Management for agile software acquisition,
More information:
Sect. 809 Panel Volume I report: http://goo.gl/ANqWrQ
