1 Services Contracting in the DoD: An Empirical Analysis of the Use of a Project Management Approach Breakout Session # D14 Dr. Rene G. Rendon, CFCM, CPCM, Fellow Associate Professor U.S. Naval Postgraduate School Monday, July 30, :30-3:45

2 Background Services Acquisition Projects Management of Service Projects The Empirical Study Findings Recommendations Services Contracting in the DoD: An Empirical Analysis of the Use of a Project Management Approach

Current Deficiencies in Federal Government Contracting GAO High Risk –DoD contract management is listed as a “high risk” by the GAO (since 1992) Lack of well-defined requirements Use of ill-suited business arrangements Lack of trained contract management personnel GAO

Current Deficiencies in Federal Government Contracting DoD IG Findings –Not conducting adequate market research –Use of inappropriate contract type –Lack of management structure and processes –Insufficient requirements management –Insufficient contract administration and contractor oversight DoD IG D

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Source: DoD Strategic Human Capital Plan Update: The Defense Acquisition Workforce, April 2010

Service Acquisition Projects Characteristics of Services –Intangibility –Co-production –Measurement Difficulty (input, output, quality, etc.) –Simultaneity of production and consumption –Diversity of service requirements

Management of Service Projects Use of a Project Management Approach –Project Management Knowledge Areas –Project Management Team –Project Life Cycle –Integrated Processes –Supporting Organizational Structure

Project Management Integration Management Scope Management Time Management Cost Management Quality Management Human Resource Management Communications Management Risk Management Procurement Management Source: Project Management Institute, Guide to the PMBOK, 2008.

The Empirical Study Deployed web-based survey instrument –Army: 8 contracting centers, 81 contracting offices (response rate: 75%) –Navy: 6 regional contracting centers covering 66 installations (response rate: 100%) –Air Force: 50 contracting squadrons representing 6 major commands (response rate: 68%)

Previous Research Findings Project management approach is traditionally used to manage systems acquisition –Well-defined, disciplined methodology and infrastructure –Centralized, coordinated management Project lifecycle Integrated processes Designated manager with project authority Integrated cross-functional teams Enabling organizational structure However, project management approach is typically not used in managing services acquisition

Previous Research Findings Infrastructure for acquisition of services is less developed and less established compared to that of weapon systems acquisition. Less formal approach to the acquisition and management of services. Lack of standardization of business practices in services acquisition.

The Empirical Study Types of services studied: –Professional, Administrative, and Management Support, –Maintenance and Repair of Equipment, –Data Processing and Telecommunications, –Utilities and Housekeeping, –Transportation and Travel

The Empirical Study Research Focus: What project management practices are employed? –Organizational Level –Project Management Approach –Acquisition Leadership –Requirements Ownership –Use of a Life Cycle –Contractor Surveillance Responsibility – Level of Oversight

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

Findings Source: Rendon, Apte, Apte, Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), (2012)

25 Conclusions Navy predominantly uses a regional approach to acquiring services, whereas the Army and Air Force acquires services at the installation level. Army and Air Force predominantly use a project team approach in managing services acquisition. The PCO predominantly leads the project team (Army and Air Force) or the services acquisition effort (Navy).

26 Conclusions The PCO owns the service requirement (less frequently, but significantly) for the Army and Navy. Project life cycles are not consistently used in services acquisition. The PCO provides contractor surveillance approximately half of the time for the Navy.

27 Conclusions Army predominantly disagrees that proper level of oversight is used to monitor contractor performance. Air Force predominantly agrees that a proper level of oversight is used to monitor contractor performance.

28 Recommendations Management of services acquisition at the regional versus installation level has advantages and disadvantages. –Regional approach can benefit from economies of scale, consistency of procedures and best practices. –Installation level acquisition allows for easier implementation of project management approaches including accurate requirements definition, management, and proper surveillance. Whichever approach is used, it is important that the proper supporting management processes are in place.

29 Recommendations Ensure proper roles and responsibilities are established for managing services acquisition – Requirements management – Project management – Contractor surveillance Adopt a project team approach – Designated project manager – Functional representation from key stakeholders Implement the use of project life cycles –Emphasis on post-award acquisition assessment

References DoD IG D GAO Project Management Institute, Guide to the PMBOK, 2008 Rendon R., Snider, K. Management of Defense Acquisition Projects, 2008 USD(AT&L) Memo, September 14, 2010 U.S. Department of Defense Services Contract Spending and the Supporting Industrial Base, , Center for Strategic and International Studies Rendon, R.G., Apte, U. M., Apte, A. (2012), Services Contracting in the DoD: A Comparison of Management Practices in the Army, Navy, and Air Force, Defense Acquisition Research Journal, 19(1), DoD Strategic Human Capital Plan Update: The Defense Acquisition Workforce, April 2010

Questions/Comments Dr. Rene G. Rendon, CFCM, CPCM Associate Professor U.S. Naval Postgraduate School Monterey, CA