DOD program drops the ball on pricing paperwork, IG says

Despite a push to gather better pricing information on defense contracts, one Defense Department office that handled an $11.2 billion contract did not keep records on pricing negotiations or other procurement information, according to a new report.

Contracting officials at DOD’s Program Executive Office for Simulation, Training, and Instrumentation lacked required documents, such as records on pre-negotiations and price negotiation memos, which are essential for accountability and transparency of the acquisition process, according to a report from DOD’s inspector general from June 1. Read the report.

Senior defense procurement officials are starting to emphasize pricing data from purchases. They want to centralize the data for other contracting officers to use and compare. Officials said the information should show whether DOD is paying fairly and getting all it can from the money it spends.

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Officials of the faulty program didn’t have a complete history of the $11.2 billion Warfighter Field Operations Customer Support (FOCUS) contract and the program office also didn’t have a place to centralize program and contract information, a requirement of defense offices, the report said. The IG's office said it had no way of auditing the subcontracting work. The missing data would help it make educated decisions throughout the life of the 10-year, indefinite-delivery, indefinite-quantity contract, the report states.

There wasn’t enough information to confirm what DOD paid a reasonable price for the contract, the IG said.

DOD wants detailed records on prices, a key to carrying out the Better Buying Power Initiative, which was developed under Ashton Carter, the under secretary of defense for acquisition, technology, and logistics. When it comes to spending, the program seeks to make DOD more efficient and its employees smarter at the negotiating table. Read the full story.

Throughout its agencies, DOD is underway in developing a department-wide repository of pricing information that would allow contracting officers to compare what DOD has paid in the past for a similar item or service. Contracting officers are expected to file their contract negotiation and pricing information into the database for other contracting officers to see. The database is currently in the testing stage.

“We simply intend to be much more professional, much more capable when it gets to sitting at the table and negotiating price,” Shay Assad, the new director of defense pricing, said in a press briefing on June 2. Assad became the director in May. He had been the director of defense procurement and acquisition policy since 2006.