Defense Dept. Sees Savings in Service Contracting The Defense Department expects to save substantial money by improving its acquisition of services. Ashton Carter, undersecretary of defense for acquisition, technology and logistics, said he is focused on improving training for the department’s acquisition personnel. Speaking at the Heritage Foundation in Washington April 20, Carter described DOD’s service buyers as “amateurs” who have been trained to buy weapons systems and other products rather than services, although services now account for more than half of the department’s contract spending. “It’s a collateral duty for them, so it’s no surprise they’re not very good at it,” he said. “I do not intend to make them into experts in it. I intend to help them get better at it.” Defense Secretary Robert Gates has ordered deep cuts in support services contracts. Carter said he is confident that through improved training “we’ll be able to realize some great productivity in the acquisition of services.” Jacques Gansler, who held Carter’s job in the Clinton administration, is leading a task force on service contracting for the Defense Science Board, a panel that advises the secretary. “The people are being trained on buying products, all the rules are being written around that,” he told the Commission on Wartime Contracting April 25. “…The emphasis has to shift.” Gansler said DOD buyers tend to award service contracts on the basis of “lowest bid, technically acceptable” rather than best value. “That’s good for buying bread and towels,” he testified, according to Federal News Radio. “But not for engineers—the idea that you hire an engineer who has a degree he got off the back of a matchbox and his body temperature is 98.6, and pay the low hourly rate for an engineer.” He also warned that DOD’s strategy of emphasizing fixed-price contracts “might actually be increasing prices: a fixed-price contract in the services arena in particular it may lead to higher costs, as contractors accommodate additional risk associated with this contract type.” While he applauded the increased emphasis on competition, Gansler said, “Too frequently now, what we’re doing is giving it away to a low bidder…. But it’s performance and cost that we should be evaluating. And too often we’ve been moving to low-bid technically acceptable and not using prior performance at all.”