Recent Large Service Acquisitions in the Department of Defense

Lessons for the Office of the Secretary of Defense

by Frank Camm, Irv Blickstein, Jose Venzor

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At the request of the Directorate of Acquisition Resource and Analysis in the Office of the Secretary of Defense (OSD), the RAND Corporation undertook a study to identify policy issues relevant to large service acquisitions that deserve closer OSD attention and to help OSD frame new policy on services acquisition. This report documents the findings of these efforts. It includes six case studies that represent a broad range of new approaches to services acquisition and that identify high-level policy issues in which OSD is likely to become involved. Perhaps the most important general finding is that many ideas discussed in the 1990s for large system acquisitions are finding their way into services acquisition. Three broad shifts occur in virtually all of the approaches: increased importance of program management, delegation of day-to-day management to contractors, and the use of alternatives to arms-length relationships. It is concluded that to effectively address continuing change in services acquisition, OSD should focus on three roles: linking services acquisition goals to the strategic goals of the Department of Defense, managing congressional concerns about services acquisition, and developing and disseminating lessons learned. As OSD pursues these oversight roles, more specific challenges can be expected to arise, including concerns about criteria other than cost, support of contingencies, treatment of small and disadvantaged businesses, and public-private partnering.

The research described in this report was sponsored by the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center supported by the Office of the Secretary of Defense, the Joint Staff, the unified commands, and the defense agencies.

This report is part of the RAND Corporation monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND monographs undergo rigorous peer review to ensure high standards for research quality and objectivity.

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