AFMC Command News

DOD pricing director visits Electronic Systems Center

  • Published
  • By Patty Welsh
  • 66th Air Base Group Public Affairs
HANSCOM AIR FORCE BASE, Mass. --  "Common sense" was a main theme when Shay Assad, Defense Pricing director for the Department of Defense, spoke to the Electronic Systems Center workforce on 'Better Business Initiatives' at the base theater Jan. 30, 2012.

Saying that for a long time the Department has just been paying too much, Assad outlined the Better Buying Power initiative that Dr. Ashton Carter, previous undersecretary of Defense for Acquisition, Technology and Logistics and now deputy secretary of Defense, has championed.

"This is not acquisition reform or lightning bolt," Assad said. "It's taking fundamental best practices, 35-40 years' worth, and inculcating them throughout the organization."

He emphasized that "common sense" needs to be used throughout the acquisition process. From the beginning, he said, we need to ask, "Do we understand the requirement?" And if so, is there something that is available today that can solve the problem?

If a new system does need to be developed, the next question should be, "Is the technology there?"

Citing examples of programs that never came to fruition, such as the Presidential helicopter and Future Combat System, he said, "We need to ensure we can create successful programs."

Assad also said that the common sense rule applies to the BBP. He said DOD is working to have more informed buyers who use the best practices that make sense for the work they are doing.

"If a fixed price contract makes sense, then it should be used, but if it doesn't, it shouldn't be," Assad said, "The flexibility is yours."

He said key elements need to be identified by the program managers and program executive officers and risk analyses need to be completed to ensure best value, but that cost is always a factor.

"Price should always be important," he said.

Assad highlighted the fact that DOD needs a healthy defense industry, saying they have created the greatest warfighting machines the world has ever known, but that DOD needs to get that equipment for less cost.

"We're taking industry out of its comfort zone," he told the audience. "It's going to be hard and you're going to get pushback. We're trying to change the game."

Industry incentives were another area Assad spoke on.

One suggestion he made was to use profit to reduce the price we're paying. The example he gave was if DOD was paying $100 for an item and the company was making $10. He said DOD would rather pay $90 but let the company make $15 in profit.

Upcoming changes at the Defense Contract Auditing Agency and Defense Contract Management Agency were also mentioned, along with how those changes will help program managers and program contracting officers. He noted that DCMA and DCAA will now offer a constant position on contractor rates and that DCMA will soon provide a central repository where information on industry will be available.

Assad said DOD has paid a premium in recent years to get needed capabilities on contract quickly. While speed remains important, the Department needs to ensure it has the right balance -- getting a good deal that can be accomplished both effectively and efficiently.

"We need to have realistic goals," he said, "to provide that best value for our warfighters and taxpayers."

Assad closed out his presentation by thanking the workforce for what they do.