BoldBites Podcast

The Section 809 Panel produces 

a monthly podcast called 

Bold Bites. Commissioners 

and professional staff speak 

about their latest research, 

recommendations, and meetings. To listen, 

go to section809panel.org/media/bold‐

bites‐podcast/.

Rec. 1: Revise definitions related to 

commercial buying to simplify their 

application and eliminate inconsistency.

The FAR’s commercial buying terms are 

confusing, poorly defined, or undefined 

altogether. For more than 2 decades, 

Congress and DoD have encouraged use of 

commercial buying by easing the statutory, 

regulatory, and procedural framework for 

buying commercial goods and services, yet 

DoD’s acquisition workforce has struggled 

to interpret and apply commercial buying 

policy. Revising the related definitions 

would enhance the preference for acquiring 

commercial items.

Rec. 2: Minimize government-unique 

terms applicable to commercial buying.

The Federal Acquisition Streamlining Act 

was intended to allow the government to 

be more commercial-like in its dealings

with the commercial market place. Success 

has been limited. To effectively use the 

commercial marketplace, selling products to 

the government must be much simpler and 

more closely reflect commercial practices. 

Streamlining contracts for commercial items 

by eliminating as many government-unique

contract terms as possible will support 

expanded commercial buying.

Rec. 3: Align and clarify FAR 

commercial termination language.

Policy for terminating commercial contracts 

has been subject to litigation in the last 24 

years, and policy guidance in FAR parts 12 and 

49 does not align and should be reconciled. 

Additionally, the language at FAR 52.212

4(l) and (m) requires further clarification to 

elucidate the fair compensation principle in 

paragraph (l) and the use of a cure notice for 

termination for cause in paragraph (m). 

Rec. 4: Revise DFARS sections related 

to rights in technical data policy for 

commercial products.

DFARS clauses 252.227-7015 and 252.22

7037 establish rights in intellectual property 

for DoD that are not aligned with commercial 

practice. The policies in FAR 27.102 and 

DFARS 227.7102-1 are generally adequate

to protect DoD and balance interests of 

the government and the contractor, yet 

subsequent paragraphs of DFARS 227.7102 

deviate from commercial practice. Adopting 

policies aligned with commercial practice 

will remove barriers that inhibit access to 

innovations in the commercial market.

Rec. 5: Align DCAA’s mission statement 

to focus on its primary customer, the 

contracting officer.

Although DCAA was established to provide 

accounting, auditing, and financial advisory 

services to DoD contracting officers, in 2010, 

the organization’s mission statement shifted 

emphasis to taxpayer and public interest. 

Aligning DCAA’s mission statement to focusing 

on serving contracting officers will support 

the contracting officers in performing quality 

work, which will, in turn, benefit taxpayers.

Rec. 6: Revise the elements of 

DCAA’s annual report to Congress to 

incorporate multiple key metrics.

Congress’s reporting requirement for DCAA 

lacks critical merit to adequately measure 

DCAA’s performance. The current reporting 

requirement emphasizes the number of 

audits and the questioned costs. Congress 

should measure DCAA’s effectiveness by using 

a balanced scorecard that keeps the focus on 

serving contracting officers.

Rec. 7: Provide flexibility to contracting 

officers and auditors to use audit and 

advisory services when appropriate.

Prior to requesting field pricing/audit 

assistance, contracting officers should 

consider other available internal resources 

and tailor their request for assistance to 

the maximum extent. To help contracting 

officers in this process, the term audit should 

be defined so there are clear distinctions 

between audits and advisory services. 

DCAA should use the full range of audit and 

nonaudit services available. The roles of 

DCAA/DCMA should be reviewed to ensure 

alignment and eliminate redundancies.

Rec. 8: Establish statutory time limits 

for defense oversight activities.

Financial and business system oversight of 

DoD’s contractors often starts too late and 

takes too long. DCAA’s work is untimely, 

causing delays in contract awards, as well 

as other negative effects. Congress should 

establish statutory oversight time limits to 

focus oversight on providing contracting 

officers what they need in a timely manner, 

to focus on what matters, to better manage 

audits and other services, and to forge more 

cooperative relationships amoung contracting 

officers, compliance professionals, and 

contractors.

Rec. 9: Permit DCAA to use IPAs to 

manage resources to meet time limits.

DCAA cannot eliminate its current backlog of 

unaudited final indirect cost rate proposals 

while providing timely financial oversight 

and advisory services to contracting officers. 

DCAA should use independent professional 

auditors (IPAs) to provide timely audit 

and advisory services in accordance with 

statutory time limits. Timely performance 

of risk management activities will facilitate 

faster corrective action, reduce risk of 

noncompliance, and reduce DoD’s oversight 

burden.

Rec 10: Replace system criteria from 

DFARS 252.242-7006, Accounting 

System Administration, with an internal 

control audit to assess the adequacy of 

contractors’ accounting systems.

DoD is not obtaining timely assurance that 

internal controls for defense contractors’ 

accounting systems are properly designed and 

functioning. DoD should use the framework 

provided by the Sarbanes–Oxley Act as a basis 

for defineing criteria and terminology, which 

in turn will reduce time needed to make 

that framework operational. Internal control 

audits should be performed as the basis for 

assessing adequacy of defense contractors’ 

accounting systems because these audits 

(a) use an engagement framework used in 

the private sector that is well established 

and understood; (b) provide more useful 

and relevant information to the acquisition 

team, contracting officer, and contractor; 

and (c) offer clear and objective criteria for 

accounting system requirements.

Rec. 11: Develop a Professional 

Practice Guide for DoD’s oversight of 

contractor costs and business systems.

DoD’s oversight functions within DCAA 

provide professional services and skilled 

advice to contracting officers. The quality and 

consistency of this advice is highly dependent 

on the quality and consistency of foundational 

standards that guide the professionals’ work. 

Although professional standards are common 

in the accounting and auditing profession, 

none have been collectively developed 

or interpreted for the unique purpose of 

federal government contract oversight. A 

Professional Practice Guide would clarify the 

types of engagements that may be performed 

to accomplish DoD’s contract compliance 

oversight objectives.

Rec. 12: Require DCAA to obtain peer 

review from a qualified external 

organization.

Peer reviews are designed to validate a 

professional service organization’s compliance 

with professional standards. DoDIG currently 

performs peer review for DCAA; however, 

DoDIG’s mission is vastly different than 

DCAA’s, so the two organizations do not 

perform similar services. DoDIG cannot serve 

as an independent, qualified peer reviewer 

of DCAA while supervising DCAA in oversight 

of contract audits. DCAA peer review should 

be performed by an organization other than 

DoDIG. Congress should amend the targeted 

DoD-specific portions of the IG Act and other

relevant sections of U.S. Code to eliminate 

DoDIG as the peer reviewer for DCAA.

Rec. 13: Increase coverage of the 

effectiveness of contractor internal 

control audits by leveraging IPAs.

DoD has not provided sufficient reviews and 

audits of contractor business systems that 

would satisfy the requirements in the DFARS. 

Deficiencies almost always are identified. 

Leveraging IPAs would allow timely assurance 

that defense contractors have effective 

internal controls is an essential component of 

all cost-effective compliance frameworks

Summary of Recommendations Published in Volume 1

continued on next page

THE SECTION 809 PANEL’S VOLUME 1 REPORT is the first of three volumes and continues the panel’s mandate for making recommendations to streamline 

acquisition. To date, the efforts of the panel have proven highly productive, and outreach 

efforts continue to generate hundreds of ideas for improving acquisition that the panel 

is diligently investigating. The May 2017 Section 809 Panel Interim Report provided 

three statutory recommendations that were all enacted into law in the FY 2018 NDAA. 

Through these actions, Congress demonstrated its willingness to expedite the panel’s 

recommendations to improve the efficiency and effectiveness of the DoD acquisition 

process. In the coming months, the panel will continue to be a partner to Congress, 

DoD, and industry in support of further efforts to streamline acquisition to better enable 

DoD to meet its strategic warfighting goals. One key area of work for the Section 809 

Panel is the conceptualizing of a Dynamic Marketplace framework—an outcome-based

acquisition process for providing DoD simplified access to the global marketplace. The 

The Section 809 Panel interacts regularly 

with stakeholders inside and outside 

government. The research teams have 

met with hundreds of representatives 

from industry, think tanks, DoD, and other 

entities in an effort to carefully consider 

all aspects of the system. Outreach 

efforts have generated hundredsof ideas 

for reform that the panel is diligently 

investigating.

Contacting Us...

Website

The Section 809 Panel offers multiple 

avenues for offering feedback on 

its website at section809panel.org. 

Stakeholders can submit general comments 

and questions about the Section 809 Panel 

by choosing the General Comments option 

under the Contact Us tab.

Daily Media Clips

Each business day, the 

Section 809 Panel

publishes news clips that 

highlight current

articles related to defense acquisition. 

Social Media

For information related specifically 

to the panel, stakeholders can follow 

the Section 809 Panel on Twitter 

(@Section809Panel) and connect on 

LinkedIn (Section 809 Panel).

50 Worst! Campaign

For information related 

specifically to the panel, 

stakeholders can follow 

the Section 809 Panel on 

Twitter (@Section809Panel) and connect 

on LinkedIn (Section 809 Panel).

panel’s research shows that the current acquisition process is an obstacle to DoD’s ability 

to access a marketplace that has moved far beyond the traditional defense industrial 

base of the Cold War era. Accordingly, the Section 809 Panel has started to develop a new 

framework that can harness the benefits from the global marketplace of ideas, solutions, 

products, and services at a speed that is closer to real time than the current acquisition 

process allows (see the Volume 1 Report for details). The Volume 1 Report contains 

recommendations to update the process by which DoD acquires IT business systems, to 

streamline DoD’s cumbersome auditing requirements, to address challenges in how the 

small business community and DoD interact, to update commercial buying, to clarify the 

definition of personal and nonpersonal services, to remove statutory requirements for 13 

acquisition-related DoD offices, and to repeal 20 acquisition-related statutory reportin

requirements. In all cases, the Section 809 Panel has laid out the rationale for change, and 

followed up with specific, actionable, statutory and regulatory language.
Rec 14: Incentivize contractor 

compliance and manage risk efficiently 

through robust risk assessment.

DCAA uses a simple risk assessment to 

prioritize workload. Because DCAA bears 

all oversight responsibilities regarding 

contractor costs and related business 

systems, and it will be affected by 

recommended oversight time limits, DCAA 

needs a more robust risk assessment 

approach. With a refocused mission, 

oversight time limits, more tools in the 

oversight professional’s toolbox, and more 

robust risk assessments, DCAA can become 

more effective and efficient.

Rec. 15: Clarify and streamline the 

definition of, and requirements for, 

an adequate incurred cost proposal to 

refocus the purpose of DoD’s oversight.

The term incurred cost proposal is 

not defined within federal acquisition 

regulations, creating unnecessary burdens 

on both the government and contractors.

The timeliness of final rate settlements 

and consequent contract closeouts will 

substantially improve if DCAA refocuses on 

ensuring the allowability of contractors’ 

indirect costs, not direct costs. DCAA 

must refocus on its mission of providing 

contracting officers with the information 

they need and auditing direct contract costs 

only by contracting officer request.

Rec. 16: Combine authority for 

requirements, resources, and 

acquisition in a single, empowered 

entity to govern DBS portfolios 

separate from the existing acquisition 

chain of command.

Responsibility for acquisition of DBSs is 

diffused across DoD, with no single entity 

accountable for results. Consequently, 

DBS programs take too long and cost too 

much to implement. Fragmented and 

overlapping oversight processes create a 

burdensome parallel acquisition system 

that hinders flexibility and inhibits use of 

modern commercial IT acquisition and 

implementation practices. Some progress 

has been made in terms of deployed DBSs, 

but only with vast amounts of financial and 

personnel resources. The need exists to 

transition to enterprise services, and the 

Military Services must be empowered to 

transform their own DBS portfolios while 

supporting the larger departmentwide 

transition to enterprise services. Combining 

authority for requirements, resources, and 

acquisition in a single, empowered entity 

will facilitate this transition.

Rec. 17: Eliminate separate 

requirement for annual IRB 

certification of DBS investments.

The Investment Review Board (IRB) 

annual certification requirement for DBS 

investments leads to unnecessary delays 

and is duplicative of the program objective 

memorandum in the PPBE process.

Eliminating the separate requirement for 

annual IRB certification would facilitate 

more timely development and deployment 

of DBSs.

Rec. 18: Fund DBSs in a way that 

allows for commonly accepted 

software development approaches.

The current statutory and policy regime 

does not enable the speed DoD needs 

to effectively acquire DBSs. Funding 

constraints, in various forms, are key 

contributors to this problem. The traditional 

appropriations model provides a helpful 

framework when developing complex 

weapons systems is fundamentally 

incompatible with open-architecture

business software programs intended to 

deliver new capabilities multiple times per 

year. Greater funding flexibility is required 

if DBSs are to deliver value to warfighters at 

substantially lower cost to taxpayers.

Rec. 19: Eliminate the Earned Value 

Management (EVM) mandate for 

software programs using Agile methods.

DoD established use of EVM as a 

requirement for periodically measuring 

linear programs with firm baselines 

established prior to starting development. 

EVM is not well suited as a measurement 

tool in an Agile environment, which is 

dynamic by design. By its nature, Agile 

provides dynamic and ongoing feedback to 

stakeholders participating on development 

teams. PMs should have the option to 

choose the project monitoring and control 

methods best suited for their acquisition 

programs. 

Rec. 20: Clarify the definitions of 

personal and nonpersonal services and 

incorporate in the DFARS a description 

of supervisory responsibilities for 

service contracts.

The FAR, DFARS, and other DoD issuances 

provide policies for contracted services for 

mission support. Acquisition policies are 

vague on supervisory responsibilities of 

contractors providing contracted services 

support and on appropriate direction 

that government employees can provide 

contractors, which creates confusion. 

Providing clear and definitive guidance will 

streamline the requirements definition 

process and improve communication.

Rec. 21: Refocus DoD’s small business 

policies and programs to prioritize 

mission and advance warfighting 

capabilities and capacities.

DoD’s slow acquisition system and 

ineffectiveness in engaging with small, 

innovative businesses, puts DoD at risk 

of losing the race to advanced capabilities. 

DoD’s small business policies and programs 

currently focus on acquiring supplies and 

services that further socioeconomic goals but 

do not fully leverage innovative and unique 

capabilities of small businesses to support 

DoD’s mission. Establishing the infrastructure 

necessary to create and execute a DoD 

small business strategy, ensuring alignment 

of DoD’s small business programs with the 

agency’s critical needs, and building on the 

successes of the SBIR/STTR and RIF programs 

could enable innovation in the acquisition 

system and foster more effective inclusion of 

small businesses.

Rec. 22: Eliminate, or sunset within 5 

years, statutory offices and Secretary 

of Defense designated officials when 

practical to increase flexibility and/or 

reduce redundancy.

Codifying the existence and structure of 

certain offices may unnecessarily restrict 

the Secretary’s ability to adapt the DoD 

organizational structure to improve efficiency 

and effectiveness consistent with the intent 

of the FY 2017 NDAA. Congress should repeal 

or sunset the statutory requirement for 

acquisition-related offices or Secretary of

Defense designated officials. 

Rec. 23: Establish a permanent, 

automatic 5-year sunset provision 

for DoD congressional reporting 

requirements. 

Excess reporting requirements can impose 

costs on DoD that outweigh the specific 

benefits of each individual report. Automatic 

sunsets can be an effective means to 

encourage Congress to regularly assess 

the value of a report. A sunset created by 

Congress will always be susceptible to the 

decisions of a later Congress. Inevitably, 

sunset provisions are only as strong as 

the congressional will to uphold them, 

yet an automatic sunset for reporting 

requirements is still a useful tool for 

maintaining congressional discipline. A 

sunset forces Congress to make an active 

decision to explicitly reauthorize a reporting 

requirement, prevents the unwitting growth 

of reports, and imposes an evaluation of 

costs and benefits for determining the 

necessity of a report.

Rec. 24: Repeal, preserve, or maintain 

various DoD congressional reporting 

requirements. 

Despite widespread support for reporting 

requirement reform, remedies have 

repeatedly failed. Congress should repeal, 

preserve, or maintain the statutory 

requirement for various reports in a manner 

consistent with Recommendation 23 above.

For detailed analysis, see the 

Section 809 Panel’s Volume 1 

Report at section809panel.org

Advisory Panel on 

Streamlining and Codifying 

Acquisition Regulations

Summary of Recommendations for

Volume 1 of 3