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Research Questions

  1. What barriers do nontraditional suppliers face in trying to work for the Department of Defense (DoD)?
  2. If barriers exist, do they continue to persist?
  3. Are barriers intractable or can DoD take actions to address them?
  4. How can DoD attract nontraditional suppliers?

The report seeks to identify barriers that companies face when attempting to enter into contracts with the Department of Defense (DoD), especially when they are not traditional DoD suppliers. To learn more about barriers, the authors interviewed personnel in companies that are in industries of likely interest to DoD and interviewed DoD personnel who work with suppliers. The interviews revealed some shared experiences that reportedly made some suppliers less willing to bid on DoD contracts: lack of access to and communication from DoD; DoD's complex and inefficient bid and selection process; the extra work and delays entailed in DoD's administration and management of contracts; and the lengthy funding time line and delays in final payments. DoD personnel interviewed had different perceptions, although they did confirm the existence of some barriers.

Key Findings

One Prevalent Barrier Is the Department of Defense's (DoD's) Cumbersome Bid and Selection Processes

  • These processes often require that bidders employ specialized units or employees.

Another Barrier Is DoD's Limited Communication with Potential or Actual Bidders

  • Access points within DoD are lacking, and bidders reportedly have difficulty getting answers to questions about design specifications.

A Third Barrier Is Contract Administration and Management That Created Extra Work and Delays

  • Delays in final payments often caused particular hardship for small businesses.

A Fourth Barrier Is a Lengthy Funding Time Line and Final Payments That Often Also Involved Delays and Gaps

  • The extensive time between initial bid and initial funding can be difficult to bridge, especially for small businesses with little capital that have to cover employees' time.

Recommendations

In the short term:

  • DoD and suppliers should work to improve communication between them.
  • Bidding processes should be streamlined.
  • A list of prequalified suppliers should be maintained to reduce delays during the bidding process.

In the longer term:

  • Some effort should be directed at simplifying and speeding the final payment processes.
  • Backlogs should be reduced at the Defense Contract Audit Agency and the Defense Contract Management Agency.
  • Best commercial procurement practices should be adopted.

Table of Contents

  • Chapter One

    Nontraditional Suppliers to the Department of Defense

  • Chapter Two

    Attracting Nontraditional Suppliers: A Recurring Problem

  • Chapter Three

    Industries of Greatest Interest to the Department of Defense

  • Chapter Four

    Interview Results

  • Chapter Five

    Conclusions and Recommendations

  • Appendix A

    Industries Linked to Future DoD Technologies

  • Appendix B

    Interview Protocols: Business Interview Protocol for RAND Study

This research was sponsored by the DoD Office of Small Business Programs and conducted within the Acquisition and Technology Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Department of the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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

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