DEFENSE 

ACQUISITIONS

Goals and Associated 

Metrics Needed to 

Assess Progress in 

Improving Service 

Acquisition

Report to Congressional Committees

June 2013

GAO-13-634

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-634, a report to 

congressional committees

June 2013

DEFENSE ACQUISITIONS

Goals and Associated Metrics Needed to Assess 

Progress in Improving Service Acquisition 

Why GAO Did This Study

In fiscal year 2012, DOD obligated 

more than $186 billion for contracted 

services, making it the federal 

government’s largest buyer of services. 

GAO’s prior work found that DOD’s 

use of contracted services has been 

the result of thousands of individual 

decisions, not strategic planning 

across the department. 

Over the years, Congress has 

legislated a number of requirements to 

improve DOD’s service acquisitions. 

For example, Congress required DOD 

to implement a service acquisition 

management structure, approval 

process, and policies. Congress also 

directed DOD to develop a plan to 

implement the Defense Science 

Board’s recommendations for

improving service acquisition. 

The National Defense Authorization 

Act for Fiscal Year 2012 mandated that

GAO report on DOD’s actions to 

improve service acquisition and 

management. GAO examined (1) the 

actions DOD has taken to respond to 

legislative requirements and (2) how 

DOD determines the effects of its 

actions to improve service acquisition. 

GAO reviewed documentation and 

interviewed DOD officials on the 

actions taken in response to the 

legislative requirements. GAO also 

assessed whether DOD addressed key 

factors, including establishing goals 

and metrics, to help it determine if it

has improved service acquisition.

What GAO Recommends

GAO recommends that DOD establish 

baseline data, specific goals for

improving service acquisition, and 

associated metrics to assess its 

progress. DOD concurred with the 

three recommendations.

What GAO Found

Over the last decade, the Department of Defense (DOD) has taken several 

actions to address legislative requirements to improve the acquisition and 

management of services. In 2001, as amended in 2006, Congress required DOD 

to implement a management structure for the acquisition of services. In 

response, DOD implemented such a structure and service acquisition review and 

approval process. Recently, DOD also established new positions within its 

management structure, including senior managers within the office of the Under 

Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) 

and the military departments, to oversee and coordinate service acquisition. With 

a management structure and review process in place, USD(AT&L) is focusing on 

efforts to improve the process for how requirements for individual service 

acquisitions are developed and enhancing training to respond to several 

legislative directives. USD(AT&L) also created its Acquisition of Services 

Functional Integrated Product Team, in part, to determine how to address 

legislative requirements to provide training for personnel acquiring services. 

USD(AT&L) did not develop a plan to implement the Defense Science Board 

recommendations to improve service acquisition but identified 23 different 

actions, including its Better Buying Power Initiative, it has planned or taken that 

officials regard as addressing what the plan was to include. For example, 

USD(AT&L) is updating its guidance on using incentives to improve contractor 

performance, which addresses one of the elements that was to be in the plan. 

While DOD has taken a number of actions that address legislative requirements, 

DOD is not yet positioned to determine what effects these actions have had on 

improving service acquisition. Specifically, USD(AT&L) has not identified specific 

goals and associated metrics that would enable it to assess progress toward 

achieving those goals. USD(AT&L) has identified improving service acquisition 

as a priority but has not defined a desired end state for its actions or the 

measurable characteristics that would embody achieving such a goal. It is 

challenged in defining a desired end state for its actions, in part, because it has 

not determined the current status of service acquisition in terms of the volume, 

type, location, and trends. DOD is taking steps to improve its contract and 

financial systems to obtain such data, but these efforts will not be complete until 

at least 2014. Further, DOD has not established departmentwide metrics to 

assess its progress in improving service acquisition but has acknowledged the 

need to do so, which officials described as challenging. Nevertheless, despite the 

challenges in doing so, it is not impossible. For example, DOD has agreed to set 

goals for the amount of spending managed through strategically sourced 

acquisitions, link strategic sourcing to its Better Buying Power Initiative, and 

establish metrics, such as utilization rates, to track progress toward these goals. 

However, DOD is not fully leveraging the command-level assessments, feedback 

from the military departments, and other ongoing efforts it relies on to gauge the 

effects of its actions to improve service acquisition. By using its budget and 

spending data and leveraging these efforts, DOD could develop baseline data 

and identify trends over time, enabling it to develop measurable goals and gain

more insight into whether its actions are improving service acquisition. Until then, 

DOD will continue to be in a position where it does not know whether its actions 

are sufficient to achieve desired outcomes.

View GAO-13-634. For more information, 

contact Timothy J. DiNapoli at (202) 512-4841 

or dinapolit@gao.gov. 
Page i GAO-13-634 Defense Acquisitions

Letter 1 

Background 4

DOD Has Taken Actions to Address Legislative Requirements to 

Improve Service Acquisition 6

DOD Has Not Fully Addressed Key Factors to Determine Whether 

Actions Are Improving Service Acquisition 14

Conclusions 20

Recommendations for Executive Action 21

Agency Comments and Our Evalutation 22

Appendix I: Department of Defense Actions to Implement Requirements in 10 U.S.C. § 2330 24

Appendix II: Under Secretary of Defense for Acquisition, Technology, and Logistics Actions to 

Address Elements in Section 807 of the National Defense 

Authorization Act for Fiscal Year 2012 37

Appendix III: Comments from the Department of Defense 47

Appendix IV: GAO Contact and Staff Acknowledgements 49

Tables

Table 1: Description of DOD Positions Responsible for Service 

Acquisition and Management 9

Table 2: Summary of DOD’s Service Acquisition Dollar Thresholds 

and Approval Authorities 26

Table 3: Actions Identified by USD(AT&L) and Military 

Departments to Address Requirements in 10 U.S.C. § 2330 27

Table 4: Summary of USD(AT&L)-Identified Actions that Address 

Elements of Section 807 of the NDAA for Fiscal Year 2012 39

Contents 
Page ii GAO-13-634 Defense Acquisitions

Abbreviations 

ARRT Acquisition Requirements Roadmap Tool 

Services FIPT Acquisition of Services Functional Integrated 

 Product Team

COR Contracting Officer’s Representative

DAU Defense Acquisition University

DAWDF Defense Acquisition Workforce Development Fund

DPAP Defense Procurement and Acquisition Policy

DSB Defense Science Board

DOD Department of Defense

FPDS-NG Federal Procurement Data System-Next 

 Generation

NDAA National Defense Authorization Act

SAW Services Acquisition Workshop 

USD(AT&L) Under Secretary of Defense for Acquisition, 

 Technology, and Logistics

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Page 1 GAO-13-634 Defense Acquisitions 

441 G St. N.W.

Washington, DC 20548

June 27, 2013

Congressional Committees

Since fiscal year 2000, the Department of Defense’s (DOD) annual 

obligations for contracted services have more than doubled when 

adjusted for inflation. In fiscal year 2012, DOD reported $186 billion in 

obligations for contracted services, making the department the federal 

government’s largest buyer of contracted services. DOD buys a wide 

range of services, including consulting, administrative, medical, and 

information technology, to support its missions. Within DOD, responsibility 

for acquiring these services is spread among buying activities within 

individual military commands, weapon system program offices, and 

functional units on military bases. We previously found the increased use 

of contracted services has been the result of thousands of individual 

decisions, not strategic planning across the department.1

Congress has passed a number of measures over the years to improve 

DOD’s acquisition and management of contracted services. In 2001, 

Congress required the Secretary of Defense to establish a management 

structure for the acquisition of services, under section 2330, title 10, 

United States Code.2

 

1

GAO, Defense Acquisitions: Further Actions Needed to Address Weaknesses in DOD’s 

Management of Professional and Management Support Contracts,

As part of the management structure, the Secretary 

was to designate officials within the military departments and defense 

agencies to be responsible for managing service acquisition within their 

respective departments or agencies. The Secretary was also directed to 

establish a process for approving individual service acquisitions in 

advance of contract award. Congress subsequently amended 10 U.S.C. 

§ 2330 in 2006 to require, among other things, that the Under Secretary 

of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) 

develop and maintain policies, procedures, and best practices guidelines 

GAO-10-39

(Washington, D.C.: Nov. 20, 2009). Over the years, we have made numerous 

recommendations to improve DOD’s acquisition of services. Information on these 

recommendations and their status is presented later in this report, as appropriate. 

2

National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, § 801(b) 

(2001).

 
 

Page 2 GAO-13-634 Defense Acquisitions 

for acquisition planning, requirements development, and other aspects 

involved with the procurement of contracted services.3

More recently, in section 802 of the National Defense Authorization Act 

(NDAA) for Fiscal Year 2010, Congress required USD(AT&L) to have the 

Defense Science Board (DSB) independently assess improvements to 

DOD’s acquisition and oversight of services.4 The resulting March 2011 

DSB report contained multiple recommendations to improve DOD’s 

approach to contracting for services.5 The DSB’s recommendations

focused on creating new policies and processes, strengthening 

management and oversight, designating roles and leadership 

responsibilities, and improving the skills and capabilities of personnel 

involved in services contracting. Subsequently, as part of section 807 of 

the NDAA for Fiscal Year 2012, Congress directed USD(AT&L) to 

develop a plan for implementing the recommendations of the DSB to 

include, to the extent USD(AT&L) deemed appropriate, eight elements, 

most of which align with the DSB’s recommendations.6

Section 807 of the NDAA for Fiscal Year 2012 also mandated that we 

report on DOD’s actions to improve service acquisition and 

management.

These eight 

elements include incentives for high contractor performance, guidance on 

the use of appropriate contract types, and training of services acquisition 

personnel.

7

To describe how DOD has addressed legislative requirements, we 

reviewed policies, guidance, memorandums, and additional information 

This report addresses (1) DOD’s actions to address 

legislative requirements in 10 U.S.C. § 2330 and section 807 and (2) the 

extent to which DOD is able to determine whether its actions have 

resulted in improvements to service acquisition and management.

 

3

National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 812.

4

Pub. L. No. 111-84 (2009). The Defense Science Board was established to provide 

independent advice and recommendations on science, technology, manufacturing, 

acquisition processes, and other matters of special interest to the DOD. 

5

Office of Under Secretary of Defense for Acquisition, Technology, and Logistics, Report 

of the Defense Science Board Task Force on Improvements to Services Contracting

(Washington, D.C.: Mar. 8, 2011). 

6

Pub. L. No. 112-81, § 807(b) (2011).

7

Pub. L. No. 112-81, § 807(c) (2011).
 

Page 3 GAO-13-634 Defense Acquisitions 

documenting the actions that USD(AT&L) and the Departments of the Air 

Force, Army, and Navy identified as taking in response to 10 U.S.C. 

§ 2330 and section 807 of the NDAA for Fiscal Year 2012. We 

interviewed USD(AT&L) and military department officials regarding how 

DOD is implementing these actions. We also met with Defense 

Acquisition University (DAU) officials to obtain information on training, 

guidance, and other efforts to address legislative requirements for service 

acquisition training or career development.

To evaluate the extent to which DOD is able to determine whether its 

actions have resulted in improvements to service acquisition and 

management, we interviewed USD(AT&L) and senior military department 

officials responsible for overseeing service acquisition and management. 

We reviewed supporting documentation on the approaches they have 

used to gain insight into the effectiveness of their actions, including 

USD(AT&L) and the military departments’ reviews of individual service 

acquisitions. We then assessed whether these approaches reflected key 

factors needed to improve service acquisition based on findings in our 

November 2006 report to determine if improvement efforts are achieving 

their intended results.8

We conducted this performance audit from September 2012 to June 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

In the 2006 report, we identified several key 

factors, which we consider to still be relevant, that leading commercial 

firms reported must be in place to significantly improve service 

acquisition. These factors include (1) leadership commitment, (2) a 

desired end state with goals for the future, and (3) metrics that define 

specified outcomes. We also found that critical to establishing a desired 

end state with goals for the future is the ability to determine where service 

acquisition is today in terms of specific and aggregate knowledge on the 

current volume, type, location, and trends.

 

8

GAO, Defense Acquisitions: Tailored Approach Needed to Improve Service Acquisition 

Outcomes, GAO-07-20 (Washington, D.C.: Nov. 9, 2006). 
 

Page 4 GAO-13-634 Defense Acquisitions 

Our prior work has found that DOD’s approach to managing service 

acquisition has tended to be reactive and has not fully addressed key 

factors for success at either the strategic or transactional level.9

Congress has required USD(AT&L) to take a number of steps to improve 

service acquisition. Specifically in 10 U.S.C. § 2330, enacted in 2001 and 

amended in 2006, Congress required USD(AT&L) and the military 

departments to establish a management structure for the acquisition of 

services.

The 

strategic level is where the enterprise sets the direction or vision for what 

it needs, captures knowledge to enable more informed management 

decisions, ensures enterprisewide goals and objectives are achieved, 

determines how to go about meeting those needs, and assesses the 

resources it has to achieve desired outcomes. The strategic level also 

sets the context for the transactional level, where the focus is on making 

sound decisions on individual acquisitions.

10 Since 2003, we have evaluated DOD’s implementation of 

10 U.S.C. § 2330 and efforts to establish the management structure and 

service acquisition approval process twice. First, in September 2003, we 

concluded that DOD’s approach to managing service acquisition did not 

provide a departmentwide assessment of how spending for services 

could be more effective.11

Subsequently, in November 2006, we found continued weaknesses 

associated with DOD’s management of service acquisitions at the 

strategic and transactional level.

We therefore recommended that DOD give 

greater attention to promoting a strategic orientation by setting 

performance goals for improvements and ensuring accountability for 

results. DOD concurred in principle with our recommendation and agreed 

that additional actions could strengthen the management structure and 

acquisition approval process but also identified challenges for doing so 

based on its organizational size, complexity, and the acquisition 

environment.

12

 

9

Specifically, we found that DOD’s 

approach to managing service acquisition tended to be reactive and that 

the department had not developed a means for evaluating whether 

GAO-07-20. 

10Pub. L. No. 107-107, § 801(b); Pub. L. No. 109-163, § 812.

11GAO, Contract Management: High-Level Attention Needed to Transform DOD Services 

Acquisition, GAO-03-935 (Washington, D.C.: Sept. 10, 2003).

12GAO-07-20. 

Background 
 

Page 5 GAO-13-634 Defense Acquisitions 

ongoing and planned efforts were achieving intended results. DOD had 

not developed a strategic vision and lacked sustained commitment to 

managing service acquisition risks and fostering more efficient outcomes. 

DOD also had not developed metrics to assess whether any changes to 

improve service acquisition actually achieved the expected outcomes. As 

a result, DOD was not in a position to determine whether investments in 

services were achieving their desired outcomes. Moreover, the results of 

individual acquisitions were generally not used to inform or adjust the 

strategic direction. We recommended that, among other actions, DOD 

take steps to understand how and where service acquisition dollars are 

currently and will be spent, in part, to assist in adopting a proactive 

approach to managing service acquisition. We also recommended that 

DOD take steps to provide a capability to determine whether service 

acquisitions are meeting cost, schedule, and performance objectives. At 

that time, DOD concurred with our recommendations. USD(AT&L), 

however, acknowledged in 2010 that DOD still needed a cohesive, 

integrated strategy for acquiring services. DOD contract management has 

remained on our High Risk List, in part, because DOD has not developed 

such a strategy and continues to lack reliable services spending data to 

inform decision making.13

While Congress has required USD(AT&L) to take steps to improve 

service acquisition, USD(AT&L) has taken actions on its own initiative as 

well. For example, USD(AT&L) established its Better Buying Power 

Initiative in a September 2010 memorandum to provide guidance for 

obtaining greater efficiency and productivity in defense spending. In its 

memorandum, USD(AT&L) emphasized that DOD must prepare to 

continue supporting the warfighter through the acquisition of products and 

services in potentially fiscally constrained times. In its own words, 

USD(AT&L) noted that DOD must “do more without more.” USD(AT&L) 

organized the Better Buying Power Initiative around five major areas, 

including an area focused on improving tradecraft in service acquisition. 

This area identified actions to improve service acquisition, such as 

categorizing acquisitions by portfolio groups and assigning new managers 

to coordinate these groups. USD(AT&L) issued another memorandum in 

April 2013 to update the Better Buying Power Initiative. This 

memorandum identifies seven areas USD(AT&L) is pursuing to increase 

efficiency and productivity in defense spending. One area is to improve 

service acquisition and the memorandum identifies a number of related 

 

13GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: February 2013).
 

Page 6 GAO-13-634 Defense Acquisitions 

actions, such as increasing small business participation in service 

acquisitions and improving how DOD conducts services-related market 

research.

Over the last decade, DOD has taken actions to address legislative 

requirements to improve the acquisition and management of services. 

Senior officials we spoke with across the military departments credit 

USD(AT&L)’s leadership and commitment as the driving force behind 

many of the actions taken to improve service acquisition. A number of 

these actions were intended to strengthen DOD’s management structure 

and approach to reviewing service acquisitions, as required by 10 U.S.C. 

§ 2330. For example, both USD(AT&L) and the military departments 

established new senior management positions to improve oversight and 

coordination of service acquisition. With this management structure and 

review process in place, USD(AT&L) is focusing on efforts to improve the 

process for how requirements for individual service acquisitions are 

developed and training to respond to legislative direction. USD(AT&L) 

also created a senior-level team to identify and determine the training 

needs for DOD personnel responsible for developing service acquisition 

requirements. USD(AT&L) did not develop a specific implementation plan 

as required by section 807, but officials identified a number of actions that 

they regard as addressing the eight elements specified.

Since 2002, DOD has increased its management attention on high dollar 

value service acquisitions by instituting new policies and review 

processes. In response to the initial requirements to establish a 

management structure for the acquisition of services, USD(AT&L) issued 

a guidance memorandum in May 2002. This memorandum required that 

service acquisitions be reviewed and approved based on dollar 

thresholds and that the acquisition strategy—addressing things such as 

the requirements to be satisfied and any potential risks—be approved 

prior to initiating any action to commit the government to the strategy. 

Under this policy, USD(AT&L) was responsible for reviewing and 

approving all proposed service acquisitions with an estimated value of 

$2 billion or more. Following the 2006 amendment to 10 U.S.C. § 2330, 

USD(AT&L) issued a revised memorandum in October of that year. Under 

the revised policy, which remains in effect, USD(AT&L) lowered the 

threshold for its review to service acquisitions valued at over $1 billion. 

The military departments have developed internal policies for reviewing 

and approving service acquisitions below USD(AT&L)’s threshold. 

Further, USD(AT&L) required that acquisition strategies be reviewed 

before contract award and that these and other acquisition planning 

DOD Has Taken 

Actions to Address 

Legislative 

Requirements to 

Improve Service 

Acquisition 

DOD Has Strengthened Its 

Management Structure and 

Service Acquisition Review 

Process
 

Page 7 GAO-13-634 Defense Acquisitions 

documents include a top-level discussion of the source selection process 

as well as noting any waivers and deviations. USD(AT&L) and military 

department officials informed us that while these reviews are conducted, 

they have not tracked the total number of service acquisitions reviewed to 

date.

In 2008, USD(AT&L) incorporated these requirements into DOD 

Instruction 5000.02, which is part of DOD’s overarching policy governing 

the operation of the defense acquisition system.14

• the source of the requirement,

This instruction 

currently requires that senior officials across DOD consider a number of 

factors when reviewing a service acquisition, including

• the previous approach to satisfying the requirement,

• the total cost of the acquisition,

• the competition strategy, and

• the source selection planning.

USD(AT&L) expects to issue a stand-alone instruction in 2014 for service 

acquisition policy to replace Enclosure 9 of DOD Instruction 5000.02. 

Additionally, in a February 2009 memorandum, USD(AT&L) refined its 

guidance on conducting service acquisition strategy reviews. Specifically, 

USD(AT&L)’s memorandum identified criteria that service acquisitions 

must adhere to and that reviewers are to assess, such as use of 

appropriate contract type, maximization of competition, and inclusion of 

objective criteria to measure contractor performance.

DOD also established new senior-level management positions, in part, to 

address legislative requirements, although some roles and responsibilities 

are still being defined. For example, the 2006 amendment to 10 U.S.C. 

§ 2330 required that USD(AT&L) and the military departments establish 

commodity managers to coordinate procurement of key categories of 

services. In 2010 and 2012, USD(AT&L) revised how it organized its 

contracted services under nine key categories. These categories of 

 

14Department of Defense Instruction 5000.02, Operation of the Defense Acquisition 

System Encl. 9 (Dec. 8, 2008). 
 

Page 8 GAO-13-634 Defense Acquisitions 

services, referred to as portfolio groups, are (1) research and 

development, (2) knowledge based, (3) logistics management, 

(4) electronic and communication, (5) equipment related, (6) medical, 

(7) facility related, (8) construction, and (9) transportation. In 2011, the 

military departments began establishing commodity manager positions to 

improve coordination and assist requiring activities with their procurement 

of services within these portfolio groups.15

 

15The military departments have different names for the commodity managers, including 

portfolio managers, program directors, and portfolio coordinators. 

By July 1, 2013, USD(AT&L) 

expects to establish similar positions responsible for supporting the DODwide procurement of services, but their authorities and responsibilities are 

not yet fully defined. Additionally, as part of its Better Buying Power 

Initiative, USD(AT&L) assigned the Principal Deputy Under Secretary of 

Defense for Acquisition, Technology, and Logistics as DOD’s senior 

manager for service acquisition, responsible for policy, training, and 

oversight across DOD. Table 1 summarizes the established positions and 

accompanying responsibilities in descending order of their hierarchy 

within DOD.
 

Page 9 GAO-13-634 Defense Acquisitions 

Table 1: Description of DOD Positions Responsible for Service Acquisition and Management

Position Description

Under Secretary of Defense for Acquisition, 

Technology, and Logistics (USD(AT&L))

• 10 U.S.C. § 2330 requires USD(AT&L) to develop and maintain policies, 

procedures, and best practices guidelines addressing procurement of contracted 

services

• Senior official for management of service acquisition across DOD

• Delegates approval authority for service acquisitions valued at $1 billion or more to 

the Director of Defense Procurement and Acquisition Policy

Principal Deputy Under Secretary for 

Acquisition, Technology, and Logistics

• USD(AT&L) designated this position as the senior manager for service acquisition 

through its April 2013 Better Buying Power Initiative memorandum

• While USD(AT&L) is defining specific responsibilities and authorities, DOD officials 

indicated this position will be generally responsible for policy, training, and 

oversight of service acquisition across DOD

Director, Defense Procurement and 

Acquisition Policy

• Responsible for acquisition policy, oversight of Defense Federal Acquisition 

Regulation Supplement, and other duties within USD(AT&L)

• Approval authority for service acquisitions valued at $1 billion or more, as 

delegated by USD(AT&L)

Military Department Service Acquisition 

Executives

• 10 U.S.C. § 2330 designated the Service Acquisition Executives as the senior 

officials responsible for service acquisition in the military departments a

• Responsible for management, oversight, and departmental policy for service 

acquisition

• Approval authority for service acquisitions valued between $250 million and 

$1 billion, unless otherwise delegated within their departments

Military Department Senior Services 

Managers

• USD(AT&L) required the military departments to establish these positions in its 

September 2010 Better Buying Power Initiative memorandum

• Senior manager within the military departments responsible for strategic planning, 

execution, and management of services within each military department

• Approval authority for service acquisitions valued between $10 million and $250 

million, unless otherwise delegated within their departments 

Military Department Commodity Managers • 10 U.S.C. § 2330 required these positions be established, but the military 

departments did not begin creating these positions until 2011

• Service acquisition professionals within the military departments’ offices of the 

senior services managers responsible for coordination of service acquisitions within 

their assigned portfolio group

• Support spend analysis and strategic sourcing efforts within their respective military 

departments

• Not an approval authority for service acquisitions

b

Source: GAO analysis of DOD data.

a

Service acquisition executives are responsible for overseeing the acquisition of both products and 

services within their respective military departments.

b

. 

Spend analysis provides knowledge about how much is being spent for goods and services, who the 

buyers are, who the suppliers are, and where the opportunities are to save money and improve 

performance. Strategic sourcing is defined by the Office of Management and Budget as a structured 

process based on spend analysis to make business decisions about acquiring commodities and 

services more efficiently and effectively. 
 

Page 10 GAO-13-634 Defense Acquisitions 

While these positions have a role in reviewing, approving, or coordinating 

individual service acquisitions, senior USD(AT&L) and military department 

officials explained that they do not have responsibility or authority for 

making departmentwide decisions, such as determining current or future 

resources allocated to contracted services. These officials explained that 

the military departments’ commands and requiring activities are 

responsible for determining their requirements and how best to meet 

them, as well as requesting and allocating budgetary resources. For 

example, while USD(AT&L) officials and the military department senior 

services managers are responsible for reviewing service acquisitions to 

determine whether the planned acquisition strategy clearly defines the 

military department’s requirement, they do not determine what contracted 

services are needed or whether an alternative acquisition approach could 

better meet their need. USD(AT&L) officials and the military department 

senior services managers stated they do not have insight into each 

requiring activity’s specific needs and are not positioned to validate those 

needs.

For additional details on the actions that USD(AT&L) and the military 

departments have taken to address the specific requirements of 

10 U.S.C. § 2330, see appendix I.

USD(AT&L) has planned and implemented actions to improve DOD’s 

process for developing requirements for individual service acquisitions, as 

required by the 2006 amendment to 10 U.S.C. § 2330.16

• USD(AT&L) collaborated with DAU to create the Acquisition 

Requirements Roadmap Tool (ARRT) in 2012. The ARRT is an online 

resource designed to help personnel write performance-based 

requirements and create several pre-award documents, including 

performance work statements and quality assurance surveillance 

plans. The ARRT guides users through a series of questions to 

develop the pre-award documents using a standardized template 

tailored to the specific requirement for services. Although using the 

USD(AT&L) 

officials noted that it has collaborated with DAU officials to develop new 

tools and training to help DOD personnel develop better acquisitions. For 

example,

 

16Requirements development is the process by which DOD personnel identify a need for a 

service and translate that need into certain contracting documents, including a 

performance work statement or quality assurance surveillance plan.

DOD Continues to Focus 

on Improving the 

Requirements 

Development Process and 

Training for Individual 

Service Acquisitions
 

Page 11 GAO-13-634 Defense Acquisitions 

ARRT is not required across DOD, DAU officials told us they have 

integrated its use into other DAU training, such as the Performance 

Requirements for Service Acquisitions course. DAU officials did not 

have data on the effectiveness of the ARRT but noted that feedback 

has been positive. For example, they have heard that performance 

work statements are better reflecting requirements as a result of 

personnel using the tool.

• In 2009, DAU introduced its Services Acquisition Workshop (SAW) to 

provide training and guidance on developing service acquisition 

requirements. The SAW is a 4-day workshop tailored to proposed 

service acquisitions. Upon request from commands or requiring 

activities, DAU officials travel to the requestor and convene the 

multifunctional team responsible for an acquisition, including general 

counsel, individuals associated with the acquisition requirements, 

contracting personnel, and oversight personnel. This team is then to 

develop the language that will be used to articulate the service 

requirement using the ARRT. By the end of the 4 days, the command 

is to have drafts of its performance work statement, quality assurance 

surveillance plan, and performance requirement summary. A key 

aspect of the workshop DAU officials identified is that it brings 

together the key personnel responsible for the acquisition to discuss 

the service requirements and how they will know if a contractor has 

met those requirements. From fiscal years 2009 through 2012, DAU 

conducted 78 SAWs. In 2012, USD(AT&L) mandated use of the SAW 

for service acquisitions valued at $1 billion and above and is 

encouraging its use for acquisitions valued at $100 million or more. 

USD(AT&L) has directed the Director of Defense Procurement and 

Acquisition Policy (DPAP) and the senior services managers to 

assess the effectiveness of the SAW and develop lessons learned 

and best practices by October 1, 2013.

In addition to implementing the ARRT and the SAW, USD(AT&L) 

established the Acquisition of Services Functional Integrated Product 

Team (Services FIPT) in August 2012, in part, to address training 

requirements in 10 U.S.C. § 2330. According to its charter, the Services 

FIPT is comprised of the Director of DPAP, DAU officials, and other 

officials responsible for acquisition career management within the DOD. 

The Services FIPT is to provide input toward the development and 

dissemination of training products and practical tools to assist personnel 

responsible for acquiring services. In addition, the Services FIPT is to 

explore the feasibility of certification standards and career development 

for all personnel who acquire services, including personnel within and 

outside of the defense acquisition workforce. USD(AT&L) officials 
 

Page 12 GAO-13-634 Defense Acquisitions 

explained that non-acquisition personnel are most often involved in the 

requirements development portion of the acquisition process but may not 

be trained on how DOD buys services. In 2011, we found that nonacquisition personnel with acquisition-related responsibilities represented 

more than half of the 430 personnel involved in the 29 services contracts 

we reviewed.17

The Services FIPT, however, has made little progress to date, and has 

met once since it was established. USD(AT&L) officials could not provide 

a time line for when the Services FIPT may fully address the training 

requirements in 10 U.S.C. § 2330. The officials explained that they expect 

the team to make more progress in 2013 when the Principal Deputy 

Under Secretary for Acquisition, Technology, and Logistics assumes 

leadership of the Services FIPT.

While we found that non-acquisition personnel received 

some acquisition training, this training was largely related to contract 

oversight as opposed to requirements development. According to its 

charter, one of the Services FIPT’s first tasks will be to identify DOD’s 

non-acquisition personnel involved in service acquisitions and determine 

how best to train them.

Section 807 of the NDAA for Fiscal Year 2012 required USD(AT&L) to 

develop a plan by June 28, 2012, for implementing the recommendations 

of the DSB to include, to the extent USD(AT&L) deemed appropriate, the 

following eight elements:

1. incentives to services contractors for high performance at low cost,

2. communication between the government and the services contracting 

industry while developing requirements for services contracts,

3. guidance for defense acquisition personnel on the use of appropriate 

contract types,

4. formal certification and training requirements for services acquisition 

personnel, 

5. recruiting and training of services acquisition personnel,

 

17GAO, Defense Acquisition Workforce: Better Identification, Development, and Oversight 

Needed for Personnel Involved in Acquiring Services, GAO-11-892 (Washington, D.C.: 

Sept. 26, 2011).

USD(AT&L) Did Not 

Develop a Plan to Meet the 

Requirement of Section 

807 but Has Taken Actions 

to Address Each Element 

in the Law
 

Page 13 GAO-13-634 Defense Acquisitions 

6. policies and guidance on career development for services acquisition 

personnel,

7. ensuring the military departments dedicate portfolio-specific 

commodity managers, and

8. ensuring DOD conducts realistic exercises and training that account 

for services contracting during contingency operations.

USD(AT&L) officials told us they did not develop a specific plan to 

address the section 807 requirement. They explained, however, that the 

April 2013 Better Buying Power Initiative memorandum addresses seven 

of the eight elements and that they have addressed the last element 

through a separate effort. In reviewing the April 2013 memorandum, we 

also found that it reflects actions to address all of the elements except the 

one pertaining to training and exercises during contingency operations. 

USD(AT&L) also identified 23 different actions it has taken or plans to 

take that officials regard as addressing all of the elements the plan was to 

include, some of which pre-date the April 2013 Better Buying Power 

Initiative memorandum. For example,

• In January 2012, USD(AT&L) issued guidance to improve how 

DOD communicates with the vendor community.

• In April 2013, USD(AT&L) directed that new guidance be 

developed to help acquisition personnel select the appropriate 

contract type and contractor performance incentives in DOD’s 

service acquisitions.

• DOD plans to conduct a joint mission rehearsal exercise in 2014 

that will include training for services contracting during 

contingency operations.

See appendix II for a more detailed description of the actions USD(AT&L) 

took to address the section 807 elements.
 

Page 14 GAO-13-634 Defense Acquisitions 

While DOD has taken a number of actions to address legislative 

requirements, DOD is not yet positioned to determine what effects its 

actions have had on improving service acquisition. Specifically, 

USD(AT&L) has not yet fully addressed two key factors—a desired end 

state for the future with specific goals and associated metrics that would 

enable it to assess progress toward achieving those goals and determine 

whether service acquisition is improving. USD(AT&L) is challenged in 

addressing these key factors, in part, because it has limited insight into 

the current status of service acquisition in terms of the volume, type, 

location, and trends. While they have not established metrics to assess 

departmentwide progress, USD(AT&L) officials rely on reviews of 

individual service acquisitions, command level assessments, and 

feedback from the military departments as means to gauge whether 

DOD’s efforts are contributing to better service acquisitions. DOD has not 

established aggregated results or trends which could be used to provide a 

departmentwide perspective on the effects of its actions.

USD(AT&L) and military department leadership have demonstrated a 

commitment to improving service acquisition, but USD(AT&L) officials 

stated that they have not defined the desired end state or specific goals 

its actions were intended to achieve. In our November 2006 report, we 

found, based on assessments of leading commercial firms, that 

identifying and communicating a defined end state or specific goals can 

significantly improve service acquisition.18

USD(AT&L) and the military department senior services managers 

acknowledge that they are challenged in defining the desired end state, in 

part, because limitations within DOD’s contracting and financial data 

systems hinder their insight into where service acquisition is today. 

USD(AT&L) and military department officials explained that DOD’s 

primary source of information on contracts, the Federal Procurement Data 

System-Next Generation (FPDS-NG), has a number of data limitations, 

including that it

This work also found that being 

able to define a desired end state or what goals are to be achieved at a 

specified time necessitates knowledge of the current volume, type, 

location, and trends of service acquisitions.

 

18GAO-07-20. 

DOD Has Not Fully 

Addressed Key 

Factors to Determine 

Whether Actions Are 

Improving Service 

Acquisition 

DOD Does Not Have the 

Information Needed to 

Define a Desired End State 

for Its Improvement 

Efforts 
 

Page 15 GAO-13-634 Defense Acquisitions 

• only reflects the predominant service purchased on a service 

contract, 

• does not reveal any services embedded in a contract for goods, 

and

• does not fully identify the location of the requiring activity 

contracting for the service.

Additionally, DOD’s financial systems do not provide detailed information 

on DOD’s budget and actual spending on specific types of contracted 

services and are not linked to the data maintained in FPDS-NG.19

To improve insight into DOD’s contracted services, USD(AT&L) is linking 

DOD’s contract and financial data systems and increasing the level of 

detail these systems provide. For example, DOD is updating its financial 

systems to provide data on each service purchased under a contract. 

USD(AT&L) officials stated that improving and linking data within its 

contract and financial systems will enable DOD to determine what it 

budgeted for a particular service, what it actually spent for that service, 

and which organizations bought the service. Officials, however, do not 

expect to have this capability until at least 2014. USD(AT&L) officials 

noted that this effort could help provide better insight into future budget 

requirements for services. USD(AT&L) officials also stated that they are 

exploring how to use Electronic Document Access—a DOD online 

document access system for acquisition related information—to provide 

them with better insight into the different types of services DOD buys 

under each of its contracts. USD(AT&L) identified that, collectively, these 

efforts will help them to improve the management of its nine portfolio 

groups of contracted services, thereby enabling the department to

According to USD(AT&L) officials and the senior services managers, 

collectively, the limitations of both FPDS-NG and DOD’s financial systems 

create challenges in identifying the current volume, type, location, and 

any potential trends in service acquisition. For example, USD(AT&L) 

stated that DOD wants to more strategically manage its nine portfolio 

groups of contracted services but does not have adequate insight into 

what services DOD currently buys within these portfolio groups.

 

19For additional information on DOD’s efforts to improve its insight into contracted 

services, see GAO, Defense Acquisitions: Continued Management Attention Needed to 

Enhance Use of DOD’s Inventory of Contracted Services, GAO-13-491 (Washington, 

D.C.: May 23, 2013). 
 

Page 16 GAO-13-634 Defense Acquisitions 

• better leverage its buying power,

• provide insight into the marketplace and buying behaviors, and

• identify opportunities for cost savings.

In its April 2013 Better Buying Power Initiative memorandum, USD(AT&L) 

also identified that by managing service acquisition by portfolio group, the 

senior services managers should be able to work with requiring activities 

to forecast future services requirements. While the military departments 

have taken some steps to forecast or track future contracted services 

requirements, these efforts are too new to determine their utility in 

identifying what services DOD plans to buy. For example, in 2012, the 

Army senior services manager requested that Army commands provide 

an estimate for contracted services valued over $10 million to be 

purchased over the next five fiscal years in an effort to identify any 

potential cost savings. Air Force officials also track information on service 

acquisitions that they expect will be awarded over the next three years to 

aid in planning acquisition strategy reviews. The Navy is developing its 

own approach to forecast future contracted services requirements, which 

officials stated will be implemented in 2013. While it is too early to assess 

the effects of these forecast or tracking efforts, they have the potential to 

help the military departments better understand what services will be 

purchased and facilitate DOD in identifying its desired end state for 

service acquisition.

USD(AT&L) has not established departmentwide metrics to assess the 

effects of its actions to improve service acquisition. Our prior work found 

that metrics linked to specified outcomes are another key factor to 

(1) evaluating and understanding performance levels, (2) identifying 

critical processes that require attention, (3) documenting results over 

time, and (4) reporting information to senior officials for decision making 

purposes.20

 

20

In lieu of such metrics, USD(AT&L) and military department 

officials stated that they rely on results from reviews of individual service 

acquisitions, command level assessments, and feedback from the military 

departments to gauge whether the department’s actions to improve 

services acquisitions, such as those required by Congress or established 

under DOD’s Better Buying Power Initiative, are having a positive effect.

GAO-07-20. 

USD(AT&L) Has Not 

Established Metrics to 

Determine its Progress in 

Improving Service 

Acquisition 
 

Page 17 GAO-13-634 Defense Acquisitions 

USD(AT&L) officials have acknowledged the need to establish 

departmentwide metrics but explained that developing such metrics has 

proven challenging. They further indicated that metrics used by leading 

commercial companies, which often focus on reducing spending for 

services to improve a company’s financial position, may not be 

appropriate for DOD.21

While developing goals and metrics is challenging, it is not impossible. 

DOD has acknowledged the need to establish departmentwide metrics. 

For example, our recent work on strategic sourcing—a process that 

moves an organization away from numerous individual acquisitions to a 

broader, aggregate approach—found that federal agencies, including 

DOD, could expand the use of this approach.

USD(AT&L) officials noted that DOD’s budget is 

based on an assessment of its missions and the resources needed to 

achieve its objective. These officials noted that while DOD is continuously 

looking for ways to improve its efficiency, it is difficult to set goals and 

measure actual reductions in spending as any savings or cost avoidances 

will generally be invested in other unfunded or high priority activities. 

Further, USD(AT&L) officials noted that since DOD’s budget is 

appropriated by Congress rather than derived from the sale of goods and 

services, changes in its resources are often outside its direct control.

22

In the absence of departmentwide metrics, USD(AT&L) officials and 

senior services managers identified several ongoing efforts they rely on to 

Strategic sourcing 

enables federal agencies to lower costs and maximize the value of 

services they buy, which is consistent with DOD’s Better Buying Power 

Initiative. We found that some agencies, including DOD, did not address 

the categories that represented their highest spending, the majority of 

which exceeded $1 billion and were for services. To improve its strategic 

sourcing efforts at DOD, we recommended, among other things, that 

DOD set goals for the amount of spending managed through strategically 

sourced acquisitions, link strategic sourcing to its Better Buying Power 

Initiative, and establish metrics, such as utilization rates, to track progress 

toward these goals. DOD concurred with the recommendations and 

stated it would establish goals and metrics by September 2013.

 

21For additional information on commercial practices, see GAO, Strategic Sourcing: 

Leading Commercial Practices Can Help Federal Agencies Increase Savings When 

Acquiring Services, GAO-13-417 (Washington, D.C.: May 15, 2013).

22GAO, Strategic Sourcing: Improved and Expended Use Could Save Billions in Annual 

Procurement Costs, GAO-12-919 (Washington, D.C.: Sept. 20, 2012).
 

Page 18 GAO-13-634 Defense Acquisitions 

gauge the effects of their actions to improve service acquisition. For 

example, USD(AT&L) and the military departments conduct pre- and 

post-award independent management reviews, or peer reviews, to ensure 

individual service acquisitions are conducted in accordance with 

applicable laws, regulations, and policies.23 USD(AT&L) and military 

department officials stated that through these peer reviews, they can 

determine if individual service acquisitions have resulted in the intended 

outcomes. For example, during the post-award phase, reviewers are to 

assess whether cost, schedule, and performance measures associated 

with individual service acquisitions are being achieved. We have 

previously found, however, that cost or schedule performance measures 

may not be as effective for service acquisitions as they are for product or 

weapon system acquisitions.24

Additionally, the Air Force and the Navy are conducting assessments at 

the command level to evaluate organizations that buy and manage 

service acquisitions. These assessments are intended to identify 

performance levels, needed improvements, and best practices. For 

example, the Air Force implemented health assessments to review a 

command’s timeliness of contract awards, creation and use of 

standardized templates, implementation of internal and external 

recommendations and new policy requirements, and quality of 

communication. According to officials, the Air Force first implemented its 

health assessments in approximately 2009 to rate or score each of its 

commands in a number of different performance areas, such as program 

management and fiscal responsibility. Air Force officials reported, 

however, that they have not established baselines or identified any 

quantifiable trends from these health assessments. That said, Air Force 

officials told us that these assessments have contributed to improvements 

in the service acquisition process. For example, in a 2011 health 

assessment, the Air Force found that one program office reduced the use 

of bridge contracts—a potentially undesirable contract that spans the time 

between an expiring contract and a new award—by 50 percent from fiscal 

Further, while peer reviews provide DOD 

with insight into the performance of a single service acquisition, DOD 

does not have information on how many post-award peer reviews have 

been completed by the military departments and has not aggregated the 

results or identified trends from all of DOD’s peer reviews.

 

23National Defense Authorization Act for Fiscal year 2007, Pub. L. No. 110-181, § 808 

(2008).

24GAO-07-20. 
 

Page 19 GAO-13-634 Defense Acquisitions 

year 2010 to 2011.25

USD(AT&L) officials also plan to assess the health of service acquisition 

across the military departments, potentially down to the program office 

level, using a number of indicators of risks, referred to as tripwires. 

Tripwires are established thresholds for measurable risk or performance 

indicators related to the acquisition of goods or services that, when 

triggered, could result in further review. USD(AT&L) officials stated that 

tripwires are still under development but could include thresholds for the 

number of days FPDS-NG data was input past deadlines or the number 

of contract modifications within 30 days of contract award. USD(AT&L) 

officials explained that tripwires alone are not sufficient to assess service 

acquisition performance, but tripwires could provide insight into what may 

or may not be going well and provide trend data over time.

The Navy completed its first health assessment in 

2012. During this assessment, the Navy identified a requirements 

development tool created and used within a command that was 

potentially a best practice and is being considered for Navy-wide use. The 

Army’s senior services manager is in the process of determining how to 

assess the health of the Army’s service acquisition organizations and 

expects to implement an approach in 2013.

Further, USD(AT&L) annually reviews the military departments and other 

DOD components to understand the effects of its actions and policies 

related to improving service acquisitions and solicit recommendations for 

changes. For example, in 2012, USD(AT&L) inquired about the actions 

that have been taken to comply with various defense acquisition 

regulations or policies, such as the Better Buying Power Initiative. The 

Army’s and Navy’s responses noted that actions to improve competition 

led to an 11 and 12 percent increase, respectively, in the rate of effective 

competition—situations where more than one offer is received in 

response to a competitive solicitation—for service contracts from fiscal 

year 2010 through 2012. In response to an open-ended question on 

recommendations for improvements, each military department suggested 

that USD(AT&L) take additional actions to increase departmentwide 

coordination on service acquisitions. Specifically, the Army and the Air 

Force recommended departmentwide service acquisition management 

 

25Our prior work has found that bridge contracts are typically the result of unexpected 

delays in the acquisition process such as bid protests or undesirable delays due to a lack 

of sufficient acquisition planning. GAO, Defense Contracting: Competition for Services and 

Recent Initiatives to Increase Competitive Procurements, GAO-12-384 (Washington, D.C.: 

Mar. 15, 2012).
 

Page 20 GAO-13-634 Defense Acquisitions 

meetings to coordinate on issues such as emerging regulations, 

directives, and policies to improve service acquisitions. In response, 

USD(AT&L) officials told us that the Director of DPAP meets with the 

military departments’ senior services managers regularly.

DOD’s ongoing efforts to gauge the effects of their actions to improve 

service acquisition also offer opportunities for DOD to develop baseline 

data, establish goals, and identify departmentwide metrics to measure 

progress. For example, by analyzing and aggregating the results of its 

health assessments, each military department could establish baselines 

against which to assess individual commands and over time, identify 

trends to determine if its commands are improving how they acquire 

services. Similarly, in coordination with the military departments, 

USD(AT&L) could use its tripwire approach to determine what percent of 

DOD’s service acquisition strategies are not approved or require changes 

before approval. DOD could then use such information to help identify 

reasons for why certain service acquisitions are not approved and 

determine appropriate corrective actions. DOD could further develop 

metrics associated with actions outlined in the Better Buying Power 

Initiative. For example, using its established services portfolio groups, 

DOD could develop baseline data on the degree of effective competition 

for services within each group. Depending on the results of that analysis, 

DOD could determine whether it would be appropriate to establish 

effective competition goals and metrics for each portfolio group or specific 

types of services within each group.

In light of the billions of dollars DOD spends each year on services and 

the constrained fiscal environment, it is critical for DOD to identify how it 

can best utilize its financial resources and acquire services more 

efficiently and effectively. DOD leadership has demonstrated a 

commitment to improving service acquisition and management and has 

taken a number of actions to address legislative requirements. For 

example, USD(AT&L) and the military departments have focused more 

management attention on improving service acquisitions through new 

policies and guidance, reviews of high-dollar service acquisitions, and 

new tools and training for personnel who acquire services. Further, DOD 

recently designated the Principal Deputy Under Secretary of Defense for 

Acquisition, Technology, and Logistics as the department’s senior 

manager for service acquisition and has established similar positions, 

including senior services managers, within each of the military 

departments. In some cases, however, DOD remains in the process of 

defining the duties and responsibilities of these positions. When taken 

Conclusions 
 

Page 21 GAO-13-634 Defense Acquisitions 

collectively, DOD has taken action to address the requirements of 

10 U.S.C. § 2330 and section 807 of the NDAA for Fiscal Year 2012.

DOD, however, does not know whether or how these actions, individually 

or collectively, have resulted in improvements to service acquisition. This 

is due, in part, to the fact that DOD continues to have limited knowledge 

and baseline data on the current state of service acquisition. To address 

this shortfall, DOD expects to obtain better service acquisition data by 

improving and linking data within its contract and financial systems, but 

this effort will not be complete until at least 2014. Having baseline budget 

and spending data can provide a foundation for measuring progress, but 

other factors such as articulating its desired end state and developing 

specific and measurable goals are also important for assessing progress. 

While developing specific goals and departmentwide metrics is 

challenging, it is not impossible. For example, DOD concurred with the 

need to set goals for the amount of spending managed through 

strategically sourced acquisitions, link strategic sourcing to its Better 

Buying Power Initiative, and establish metrics, such as utilization rates, to 

track progress toward these goals. However, DOD is currently missing 

opportunities to fully leverage its command-level assessments, feedback 

from the military departments, and other ongoing efforts it relies on to 

gauge the effects of its actions to improve service acquisition. Each of 

these efforts has merit and value in their own regard. Nevertheless, until 

DOD utilizes them to develop baseline data, goals, and associated 

metrics, similar to what it has committed to do for its strategic sourcing 

efforts, DOD will continue to be in a position where it does not know 

whether its actions are sufficient to achieve desired outcomes.

To better position DOD to determine whether its actions have improved 

service acquisition, we recommend that the Principal Deputy Under 

Secretary of Defense for Acquisition, Technology, and Logistics, in 

consultation with the military departments’ senior services managers, take 

the following three actions:

• identify baseline data on the status of service acquisition, in part, 

by using budget and spending data and leveraging its ongoing 

efforts to gauge the effects of its actions to improve service 

acquisition, 

• develop specific goals associated with their actions to improve 

service acquisition, and

• establish metrics to assess progress in meeting these goals.

Recommendations for 

Executive Action
 

Page 22 GAO-13-634 Defense Acquisitions 

DOD provided us with written comments on a draft on this report, which 

are reprinted in appendix III. DOD concurred with the three 

recommendations, noting that they are consistent with DOD’s ongoing 

Better Buying Power Initiative. DOD also stated that as it improves its 

management of service acquisition, it should be able to measure 

performance, track productivity trends, and establish consistent best 

practices across the department. We agree that DOD has the opportunity 

to leverage its ongoing efforts as it works to implement our 

recommendations. By incorporating our recommendations into those 

efforts, DOD will be better positioned to determine whether its actions are 

improving service acquisition. DOD also provided technical comments, 

which were incorporated as appropriate.

We are sending copies of this report to the Secretary of Defense; the 

Secretaries of the Army, Air Force, and the Navy; the Principal Deputy 

Under Secretary of Defense for Acquisition, Technology, and Logistics; 

and interested congressional committees. This report will also be 

available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions concerning this report, please 

contact me at (202) 512-4841 or by e-mail at dinapolit@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. Staff who made key contributions 

to this report are listed in appendix IV.

Timothy J. DiNapoli

Director

Acquisition and Sourcing Management

Agency Comments

and Our Evalutation 
 

Page 23 GAO-13-634 Defense Acquisitions 

List of Committees

The Honorable Carl Levin

Chairman 

The Honorable James Inhofe 

Ranking Member 

Committee on Armed Services 

United States Senate

The Honorable Dick Durbin 

Chairman 

The Honorable Thad Cochran 

Ranking Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate

The Honorable Howard P. “Buck” McKeon 

Chairman 

The Honorable Adam Smith 

Ranking Member 

Committee on Armed Services 

House of Representatives

The Honorable C.W. “Bill” Young 

Chairman 

The Honorable Pete Visclosky 

Ranking Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 24 GAO-13-634 Defense Acquisitions 

In 2001, Congress required the Secretary of Defense to implement a 

management structure for the acquisition of services under section 2330, 

title 10, United States Code (U.S.C.).1 This provision requires, among 

other things, the Department of Defense (DOD) to develop a process for 

approving individual service acquisitions based on dollar thresholds and 

other criteria to ensure that DOD acquires services by means that are in 

the government’s best interest and managed in compliance with 

applicable statutory requirements. Under DOD’s initial May 2002 

guidance for implementing the required management structure and 

service acquisition approval process, the Under Secretary of Defense for 

Acquisition, Technology, and Logistics (USD(AT&L)) was to review all 

proposed service acquisitions with an estimated value of $2 billion or 

more. The military departments and other defense components were to 

review service acquisitions below that threshold.2

In January 2006, Congress amended 10 U.S.C. § 2330 to include 

additional requirements for DOD’s management of the acquisition of 

services.

The military 

departments each subsequently developed their own service acquisition 

approval processes that had several elements in common. Chief among 

these elements was the requirement that acquisition strategies be 

reviewed and approved by senior officials before contracts are awarded. 

Acquisition strategies to be reviewed were to include, among other things, 

information on contract requirements, anticipated risks, and business 

arrangements. Once acquisition strategies were approved, DOD 

contracting offices may continue the acquisition process, including 

soliciting bids for proposed work and awarding contracts.

3

 

1

National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, § 801(b) 

(2001).

The amendment requires, among other things, that the senior 

officials responsible for management of acquisition of contract services 

assign responsibility for the review and approval of procurements based 

on estimated value of the acquisition. Senior officials within DOD are 

identified as USD(AT&L) and the service acquisition executives of the 

military departments. In response to these requirements, USD(AT&L) 

issued an October 2006 memorandum to update its 2002 acquisition of 

services policy. The revised policy identifies categories of service 

2

Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, 

Acquisition of Services, May 31, 2002.

3

National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 812. 

Appendix I: Department of Defense Actions 

to Implement Requirements in 10 U.S.C. § 

2330
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 25 GAO-13-634 Defense Acquisitions 

acquisitions, based on dollar thresholds and related roles and 

responsibilities within USD(AT&L) and the military departments.4 The 

policy requires all proposed service acquisitions with a value estimated at 

more than $1 billion be referred to USD(AT&L) and formally reviewed at 

the discretion of USD(AT&L).5 Acquisitions with a value estimated under 

that threshold are subject to military department acquisition approval 

reviews.6 USD(AT&L)’s 2006 acquisition of services policy was 

incorporated into Enclosure 9 of DOD’s 5000.02 acquisition instruction.7

 

4

Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, 

Acquisition of Services Policy, October 2, 2006. 

In 2010, USD(AT&L) required that each of the military departments 

establish senior managers to be responsible for the governance in 

planning, execution, strategic sourcing, and management of service 

contracts. Additionally, these senior managers are to review service 

acquisitions valued at $10 million but less than $250 million. USD(AT&L) 

expects to issue a stand-alone instruction in 2014 for service acquisition 

policy to replace Enclosure 9 of DOD Instruction 5000.02. See table 2 for 

a summary of service acquisition review thresholds and approval 

authorities.

5

The memorandum also provides for the review of “special interest” acquisitions, which 

are not defined in the memorandum but may be designated as such by USD(AT&L) or 

other senior officials. 

6

Specifically, under the 2006 policy, a service acquisition valued at greater than the 

simplified acquisition threshold but not greater than $1 billion by or on behalf of a military 

department will be reviewed by the senior official responsible for the management of 

acquisitions of services for the respective military department, or as designated. A service 

acquisition valued at greater than the simplified acquisition threshold but not greater than 

$1 billion by or on behalf of the DOD components outside the military departments will be 

reviewed by the senior official responsible for the management of acquisitions of services 

for the DOD components, who is USD(AT&L), or as designated. 

7

Although the acquisition of services policy incorporated in enclosure 9 of the 5000.02 

instruction is substantially similar to USD(AT&L)’s 2006 policy, the 5000.02 policy provides 

that for service acquisitions estimated to cost over $1 billion, the senior officials of the 

military departments and decision authorities in DOD components outside the military 

departments shall notify USD(AT&L) of the proposed acquisition, and USD(AT&L) or as 

designated shall initiate a review of the proposed acquisition strategy. The review shall be 

completed within 30 days and the acquisition may only proceed after the acquisition 

strategy has been approved. Department of Defense Instruction 5000.02, Operation of the 

Defense Acquisition System Encl. 9, paras. 5.b.(1)-(4). 
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 26 GAO-13-634 Defense Acquisitions 

Table 2: Summary of DOD’s Service Acquisition Dollar Thresholds and Approval 

Authorities

Service acquisition dollar threshold Approval authority

Any acquisition of services with a total estimated value 

of $1 billion or more

USD(AT&L) or designee

As designated by USD(AT&L), DOD Chief Information 

Officer, or military department senior official

USD(AT&L) or senior officials

Acquisitions of services with estimated value of $250 

million or more

Military department senior 

officiala

Acquisitions of services with estimated value of $10 

million or more, but less than $250 million 

or as designated

Military department senior 

manager or as designated

Acquisitions of services with estimated value more than 

the simplified acquisition threshold but less than $10 

million

Military department senior 

manager or as designated

Source: USD(AT&L).

Note: Approval authorities for service acquisitions with an estimated value of under $250 million differ 

within the military departments, as these responsibilities may be delegated to other officials within 

each department consistent with USD(AT&L)’s policy. Also, any acquisition of information technology 

services with a total estimated value greater than $500 million is to be approved by the DOD Chief 

Information Officer or as designated.

a

USD(AT&L) is the senior official for other defense agencies with DOD.

The 2006 amendments to 10 U.S.C. § 2330 require DOD to take a 

number of other actions. For example, DOD is to develop service 

acquisition policies, guidance, and best practices; appoint full-time 

commodity managers for key categories of services; and ensure 

competitive procedures and performance-based contracting be used to 

the maximum extent practicable. In table 3, we summarize the actions 

that DOD took in response to the requirements in 10 U.S.C. § 2330. To 

do so, we collected USD(AT&L) and each military department’s selfreported information using a data collection template; corroborated 

reported actions with related documentation when available; and 

conducted interviews with knowledgeable agency officials to clarify 

responses. We did not evaluate the appropriateness or sufficiency of any 

actions taken or planned by DOD.
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 27 GAO-13-634 Defense Acquisitions 

Table 3: Actions Identified by USD(AT&L) and Military Departments to Address Requirements in 10 U.S.C. § 2330

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(a) Requirement for management structure. The Secretary of Defense shall establish and implement a management structure for the 

procurement of contract services for the DOD. The management structure shall provide at a minimum, for the following:

(a)(1)(A) USD(AT&L) shall develop and maintain (in consultation with the service acquisition executives) policies, procedures, and 

best practices guidelines addressing procurement of contract services, including policies, procedures, and best practices guidelines 

for

(a)(1)(A)(i) acquisition planning; USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that senior officials 

or their designees consider various elements in reviewing a planned 

service acquisition including acquisition planning. The instruction also 

requires officials to consider the cost of the total acquisition, the 

availability of funding, opportunities to implement socio-economic 

business concerns and strategic sourcing, competition strategy, and 

source selection planning. 

DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to 

provide guidance for the activities that should be conducted during 

acquisition planning. The guidance recommends the formation of a multifunctional team to plan and manage an acquisition throughout its lifecycle, 

a review of current approaches to acquiring the required services, and the 

need to conduct market research.

The Office of the Secretary of Defense, Defense Procurement and 

Acquisition Policy (DPAP) issued, in April 2012, the “Market Research 

Report Guide For Improving the Tradecraft in Services Acquisition” to aid 

in the conducting of market research. According to the guidance, it was 

developed in part to translate DOD’s best practices for conducting and 

documenting market research into standard processes and reports. The 

guidance includes a template for documenting market research to 

facilitate more effective collection and sharing of market research across 

DOD.
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 28 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(a)(1)(A)(ii) solicitation and contract award; USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires senior officials or 

their designees to consider various elements in reviewing a planned 

service acquisition including the identified approach for solicitation and 

contract award. Officials are required to consider the type of business 

arrangement anticipated, pricing arrangements, and proposed evaluation 

criteria.

DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to 

provide guidance for the activities that should be conducted when 

soliciting and awarding contracts, including factors to consider when 

determining the type of business arrangement and incentives that will be 

used. The guidebook also provides instructions for drafting a request for 

proposal and for performance work statements.

Defense Acquisition University (DAU) developed the “Acquisition 

Requirements Roadmap Tool (ARRT)” in 2012 to provide DOD personnel 

with a step-by-step process for developing performance-based service 

acquisitions. Among other things, the tool is intended to help users 

generate a performance work statement tailored to their requirements 

within a standardized format.

(a)(1)(A)(iii) requirements development and management; USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that senior officials 

or their designees consider various elements in reviewing a planned 

service acquisition including the source of the requirement, outcomes to 

be achieved, and how the requirement was previously satisfied.

In 2012, DPAP required the military departments to establish processes 

for identifying, assessing, reviewing, and validating requirements in 

response to a separate legislative requirement.a

DAU developed the ARRT to provide guidance on developing 

requirements for contractor-provided services. DAU officials told us that, 

according to ARRT-users, the tool has resulted in more precise language 

on the requirement for services in performance work statements.

The military departments 

subsequently developed their own processes to meet the requirement.

DAU, in coordination with DPAP, developed the Service Acquisition 

Workshop in 2009 to provide participants with a tailored, interactive, 

week-long course on performance-based techniques to service 

acquisitions. The DPAP-funded workshop sponsors instructors from DAU 

to travel to commands that are developing new service acquisitions. DAU 

officials explained that once the workshop is complete, the command will 

have drafted the performance work statement and quality assurance 

surveillance plan. DAU reported that it conducted 80 workshops between 

2009 and 2012. In December 2012, DPAP issued a policy memorandum 

requiring that Service Acquisition Workshops be conducted for all service 

acquisitions valued at $1 billion or more. The memorandum notes that this 

workshop has improved the quality of requirements documents while

increasing the likelihood of competition and shortening acquisition lead 

times. 
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 29 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(a)(1)(A)(iv) contract tracking and oversight; USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that senior officials 

or their designees consider various elements in reviewing a planned 

service acquisition including the existing or planned management 

approach for contract tracking and oversight, and tracking procedures or 

processes used to monitor contractor performance for the proposed 

services acquisition. 

DOD Instruction 5000.02 Enclosure 9, “Acquisition of Services,” also 

requires that DOD officials collect service contract data. Officials told us 

such data is compiled through use of the Federal Procurement Data

System-Next Generation (FPDS-NG). USD(AT&L) officials stated that 

they are taking steps to obtain better service contact budget and 

expenditure data, in part, due to limitations with FPDS-NG. For example, 

FPDS-NG data lists a single Product and Service Code, the predominant 

one purchased, for each contract action rather than detailed information 

on each type of service purchased under the contract.b

In response to other legislative requirements, DOD components, including 

the military departments, compile annual inventories of activities 

performed on their behalf by contractors under contracts for services.

To improve data 

on service acquisition, in November 2010, DPAP directed the military 

departments to organize services spending data into six portfolio groups, 

which were later increased to nine. USD(AT&L) classified nearly 3,000 

different Product and Service Codes within its nine portfolio groups, in 

part, to enhance its ability to analyze service contract spending and 

support strategic sourcing initiatives. Additionally, in January 2013, 

USD(AT&L) began an effort to improve its ability to track service contract 

budget requests, obligations, and expenditures by requiring the military 

departments to include Product and Service Code line-item data in both 

acquisition and financial data systems. USD(AT&L) expects that DOD’s 

data systems will have this capability by October 2013.

c

The legislation requires DOD to annually compile and review an inventory 

of activities performed pursuant to contracts to help provide better insights 

into the number of contractor full-time equivalents providing services to 

DOD and the functions they are performing. To date, DOD has submitted 

annual inventories of contracted services for fiscal years 2007 through 

2011. GAO, however, has found that DOD inventories have significant 

limitations and do not accurately reflect the number of contractors 

providing services to DOD.d In response to GAO’s recommendations, 

DOD has identified a number of actions it is taking to more accurately 

reflect the number of contactors providing services to DOD.
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 30 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(a)(1)(A)(v) performance evaluation; and USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that senior officials 

or their designees consider various elements in reviewing a planned 

service acquisition including the plan for evaluating whether the metrics 

and any other measures identified to guide the acquisition have been 

achieved; measures shall include the thresholds for cost, schedule, and 

performance for the acquisition.

In response to other legislative requirements, USD(AT&L) implemented 

independent management reviews, commonly referred to as peer reviews, 

of contracts for services. e

DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to 

provide guidance for developing contract performance objectives and 

metrics, and a methodology for assessing contractor performance. For 

example, it provides the steps DOD officials should take to develop a 

quality assurance surveillance plan and ensure that a contracting officer’s 

representative (COR) is appointed and trained to implement that plan.

Peer reviews are conducted by teams

composed of senior contracting officials from the military departments and 

defense agencies as well as legal advisors that are not associated with 

the service acquisition. Part of the review includes an evaluation of 

whether the contractor met cost, schedule, and performance 

requirements. DPAP is responsible for conducting pre- and post-award 

peer reviews for services acquisitions with an estimated value of $1 billion 

or more and the military departments, defense agencies, and field 

activities are responsible for conducting similar reviews for service 

acquisition under that threshold.

DOD issued its “DOD COR Handbook” in March 2012 to provide guidance 

on the roles and responsibilities of CORs. For example, it provides CORs 

with guidance on how to perform effective contract quality surveillance as 

well as supplemental information on COR training requirements. 

(a)(1)(A)(vi) risk management; USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that senior officials 

or their designees consider various elements in reviewing a planned 

service acquisition including whether the proposed service acquisition 

includes an assessment of the current and potential technical, cost, 

schedule, and performance risks and a plan for mitigating or retiring those 

risks.

DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to 

provide guidance on how to identify, assess, and mitigate cost, schedule, 

and performance risks.
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 31 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(a)(1)(B) USD(AT&L) shall work with the service acquisition executives and other appropriate officials of the DOD -

(a)(1)(B)(i) to identify the critical skills and competencies 

needed to carry out the procurement of contract services 

on behalf of DOD;

In August 2012, USD(AT&L) established an Acquisition of Services 

Functional Integrated Product Team (Services FIPT), chaired by the 

director of DPAP, to identify the critical skills, competencies, and training 

DOD that personnel with service acquisition responsibilities need. 

According to USD(AT&L) officials, the team has met once since it was 

established and has not yet determined what these skills and 

competencies might be. While USD(AT&L) does not have a timeframe 

for making such decisions, it expects to make more progress in 2013 

when the Principal Deputy Under Secretary of Defense for Acquisition, 

Technology, and Logistics assumes leadership over the team. 

(a)(1)(B)(ii) to develop a comprehensive strategy for 

recruiting, training, and deploying employees to meet the 

requirements for such skills and competencies; and

USD(AT&L) established the Services FIPT, in part, to identify personnel 

with service acquisition responsibilities, the critical skills those personnel 

need to complete their responsibilities and improve service acquisitions, 

and support a human capital strategy. USD(AT&L) officials explained, as 

discussed above, that the Services FIPT has not yet developed a 

comprehensive strategy for recruiting, training, and deploying employees 

with services acquisition responsibilities.

(a)(1)(B)(iii) to ensure that the military departments and 

Defense agencies have staff and administrative support 

that are adequate to effectively perform their duties under 

this section;

USD(AT&L) issued its April 2013 memorandum “Implementation 

Directive for Better Buying Power 2.0—Achieving Greater Efficiency and 

Productivity in Defense Spending.” The memorandum identifies a 

number of actions DOD is taking to improve the professionalism of the 

total acquisition workforce. These include: (1) establishing higher 

standards for key leadership positions; (2) establishing increased 

professional qualification requirements for all acquisition specialties; (3) 

increasing the recognition and support of excellence in acquisition 

management; and (4) continuing to increase the cost consciousness of 

the acquisition workforce. However, the memorandum does not include 

details on how USD(AT&L) has ensured that the military departments 

and Defense agencies have staff and administrative support to 

effectively perform their duties related to the acquisition of services. 

USD(AT&L) did not identify additional actions to address this 

requirement.
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 32 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(a)(1)(C) USD(AT&L) shall establish contract services 

acquisition categories, based on dollar thresholds, for the 

purpose of establishing the level of review, decision 

authority, and applicable procedures in such categories.

USD(AT&L) issued its October 2006 memorandum, “Acquisitions of 

Services Policy,” in part, to address the requirement to establish a 

management structure and service acquisition approval process. The 

policy requires that USD(AT&L) review all proposed service acquisitions 

valued at over $1 billion or any classified as “special interest.” The policy 

further directed the military departments to issue guidance implementing 

the policy. USD(AT&L) later implemented pre and post-award peer 

reviews of services acquisitions in a 2008 policy memorandum 

responding to requirements in the NDAA for Fiscal Year 2008. While the 

2006 and 2008 policy memoranda identified what officials were to 

consider when reviewing service acquisitions, DPAP issued additional 

guidance in February 2009. This 2009 guidance establishes key services 

acquisition tenets including use of a comprehensive acquisition strategy, 

appropriate contract type, maximum competition, and objective criteria to 

measure performance. The guidance provides that acquisition strategy 

reviews and peer reviews will include the extent to which these tenets 

are demonstrated.

(a)(1)(D) USD(AT&L) shall oversee the implementation of 

the requirements of this section and the policies, 

procedures, and best practices guidelines established and 

developed in response to this section pursuant to 

subparagraph (A).

USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services” in December 2008. This instruction requires that senior officials 

or their designees consider various elements in reviewing a planned 

service acquisition including whether the proposed service acquisition 

addresses requirements for acquisition planning, requirements 

development and management, solicitation and contract award, contract 

tracking and oversight, performance evaluation, and risk management.

The peer review process, which USD(AT&L) also cited as an action to 

address (a)(1)(A)(v) of this section, is a mechanism to oversee the 

implementation of the policies, procedures, and best practices guidelines 

established in response to subparagraph (A).

USD(AT&L)’s Services FIPT is part of its efforts to oversee the 

implementation of the requirements of the policies, procedures, and best 

practices guidelines established in response to subparagraph (A). 
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 33 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(b) Duties and responsibilities of senior officials responsible for the management of acquisition of contract services -f 

(b)(1) Except as provided in paragraph 2, the senior 

officials responsible for the management of acquisition of 

contract services shall assign responsibility for the review 

and approval of procurements in each contract services 

acquisition category established under subsection (a)(1)(C) 

to specific DOD officials, subject to the direction, 

supervision, and oversight of such senior officials.

While the USD(AT&L) is the senior official responsible for the 

management of acquisition of contract services for and on behalf of the 

defense agencies and other components outside the military 

departments, USD(AT&L) assigned the Principal Deputy Under 

Secretary of Defense for Acquisition, Technology, and Logistics as 

DOD’s senior manager for service acquisition, responsible for policy, 

training, and oversight across DOD. Officials stated, however, that 

specific roles and responsibilities with respect to service acquisition are 

still being defined. USD(AT&L) officials stated that they have selected 

the individual who will assume this position, but cannot proceed until a 

DOD hiring freeze is lifted. The military departments established similar 

positions between 2010 and 2012, known as senior services managers, 

at the direction of USD(AT&L). These managers are responsible for the 

governance in planning, execution, strategic sourcing, and management 

of service contracts.

Each of the military departments developed a management structure and 

acquisition strategy review policy to compliment USD(AT&L)’s 2006 

policy. For each military department, the service acquisition executive is 

responsible for the overall management and acquisition of contract 

services. The military departments’ policies identify contract service 

acquisition categories and approval responsibilities based, in part, on 

dollar thresholds. The policies generally require that service acquisitions 

valued over $1 billion, unless indentified as “special interest,” be referred 

to USD(AT&L) for review and approval. However, for service acquisitions 

under $1 billion, the thresholds and review responsibilities differ by each 

military department. For example

• The Air Force requires that any service acquisition valued 

between $100 million and $1 billion be referred to the Air Force 

Program Executive Office for Combat and Mission Support.

• Navy officials stated that any service acquisition valued between 

$100 million and $1 billion be referred to Deputy Assistant 

Secretary of the Navy for Acquisitions.

• The Army requires that service acquisitions valued between 

$500 million and $1 billion be referred to Deputy Assistant 

Secretary of the Army for Procurement.

• While the military departments’ senior services managers also 

support the review of these large dollar services acquisitions, 

they are also the decision authority for service acquisitions 

valued at $250 million or less, but can delegate that 

responsibility.

The military departments delegate decision authority for certain lower 

dollar services acquisitions to other officials such as the head of 

contracting authority or base commanders. These authorities are 

delegated for service acquisitions valued as low as the simplified 

acquisition threshold, as required by USD(AT&L). 
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 34 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(b)(2) With respect to the acquisition of contract services by 

a component or command of DOD the primary mission of 

which is the acquisition of products and services, such 

acquisitions shall be conducted in accordance with policies, 

procedures, and best practices guidelines developed and 

maintained by the USD(AT&L) pursuant to subsection 

(a)(1), subject to oversight by the senior officials referred to 

in paragraph (1). 

USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that all 

acquisitions of services shall comply with applicable statutes, 

regulations, policies, and other requirements, whether the services are 

acquired by or on behalf of DOD. 

The military departments’ service acquisition review processes, oversight 

by the senior services managers, and other policies or instructions 

ensure that service acquisitions comply with USD(AT&L) policies, 

procedures and best practice guidelines. 

For example 

• The Army’s senior services manager conducts an annual 

forecast of contract services, assesses costs savings quarterly, 

reviews service acquisition strategies valued between 

$10 million and $250 million, and annually reviews command 

processes for awarding service contracts.

• The Navy revises the Navy Marine Corps Acquisition Regulation 

to incorporate service acquisition policy information where 

appropriate, annually reviews command procedures for 

awarding services contracts, and requires that individuals who 

award contracts ensure compliance with both Navy and 

USD(AT&L) policies, procedures, and best practices.

• The Air Force policies governing service acquisitions require 

similar compliance. The Air Force also noted that its senior 

services manager is developing additional instructions to 

strengthen requirements to increase compliance with 

USD(AT&L) and other policies, procedures, and best practices.

(b)(3) In carrying out paragraph (1), each senior official responsible for the management of acquisition of contract services shall

(b)(3)(A) implement the requirements of this section and 

the policies, procedures, and best practices guidelines 

developed by the USD(AT&L) pursuant to subsection 

(a)(1)(A); 

USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services,” in December 2008. This instruction requires that all 

acquisitions of services shall comply with applicable statutes, 

regulations, policies, and other requirements, whether the services are 

acquired by or on behalf of DOD. 

The military departments’ management structure and service acquisition 

review process, reviews of command procedures for awarding services 

acquisitions, and various policies and procedures implement the 

requirements of this section, as well as the policies, procedures, and 

best practices guidelines developed by USD(AT&L) pursuant to section 

(a)(1)(A). 
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 35 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(b)(3)(B) authorize the procurement of contract services 

through contracts entered into by agencies outside DOD in 

appropriate circumstances, in accordance with the 

requirements of section 854 of the Ronald W. Reagan 

NDAA for Fiscal Year 2005 (10 U.S.C. § 2304 note), 

section 814 of the Strom Thurmond NDAA for Fiscal Year

1999 (31 U.S.C. § 1535 note), and the regulations 

implementing such sections;

Defense Federal Acquisition Regulation Supplement subpart 217.78 and 

part 242.002 provide DOD policy on contracts or delivery orders issued 

by a non-DOD agency, and interagency agreements. Each of the military 

departments has also issued policies or procedures for procuring 

services through interagency agreements. For example

• Subpart 5117.78 of the Army Federal Acquisition Regulation 

Supplement provides Army policy and procedures for contracts 

awarded by other entities,

• Subpart 5217.5 of the Navy Marine Corps Acquisition Regulation 

Supplement provides Navy policy and procedures for 

interagency agreements, and

• Air Force Instruction 65-116 and Mandatory Procedure 5317.5 

provides Air Force policy and procedures for entering into 

interagency agreements. 

(b)(3)(C) dedicate full-time commodity managers to 

coordinate the procurement of key categories of services;

USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of 

Services” in December 2008. This instruction requires that the senior 

officials dedicate commodity managers to coordinate the procurement of 

key categories of services. All of the military departments reported that 

they began to assign such commodity managers in 2012. The 

commodity managers we met with explained that their roles include 

providing procurement advice to commands within their military 

department, tracking service contract spending and forecasting data, and 

assisting in the evaluation of individual service acquisitions and 

command procedures for developing, awarding, and managing service 

acquisitions. Officials noted that these managers are sometimes 

responsible for the coordination of more than one service portfolio group. 

USD(AT&L) officials stated that by July 1, 2013, they will establish 

commodity managers within their office to support service acquisition 

across DOD. These officials also stated that the roles and responsibilities 

of commodity managers across DOD will be further defined in the DOD 

instruction that will replace Enclosure 9 of DOD Instruction 5000.02 in 

2014.

(b)(3)(D) ensure that contract services are procured by 

means of procurement action that are in the best interests 

of DOD and are entered into and managed in compliance 

with applicable laws, regulations, directives, and 

requirements;

USD(AT&L) and the military departments’ management structure and 

service acquisition review process in combination with a number of 

policies ensure that contract services are procured in the best interest of 

the DOD and comply with applicable laws, regulations, directives, and 

requirements. 
Appendix I: Department of Defense Actions to 

Implement Requirements in 10 U.S.C. § 2330

Page 36 GAO-13-634 Defense Acquisitions 

10 U.S.C. § 2330 requirements

Actions indentified by USD(AT&L) or the military departments to 

address requirements 

(b)(3)(E) ensure that competitive procedures and 

performance-based contracting are used to the maximum 

extent practicable for the procurement of contract services; 

and

USD(AT&L) issued its October 2006 memorandum “Acquisition of 

Services Policy” and December 2008 DOD Instruction 5000.02 

Enclosure 9, “Acquisition of Services,” to require that senior officials 

ensure that services acquisitions are based on clear, performance-based 

requirements and that cost, schedule, and performance outcomes are 

identifiable and measurable.

USD(AT&L) issued its April 2013 memorandum “Implementation of 

Better Buying Power 2.0—Achieving Greater Efficiency and Productivity 

in Defense Spending.” Within the memorandum, USD(AT&L) 

emphasized the need to promote effective competitive procedures 

across DOD. The memorandum includes a number of actions 

USD(AT&L) has planned to promote competition, including providing 

more opportunities for small business participation.

The military departments’ management structure and services 

acquisition review processes, various policies, and reviews of command 

process for awarding contracts ensure that competitive procedures and 

performance-based contracting are used to the maximum extent 

practicable.

(b)(3)(F) monitor data collection under section 2330a of this 

title, and periodically conduct spending analyses, to ensure 

that funds expended for the procurement of contract 

services are being expended in the most rational and 

economic manner practicable.

In response to other legislative requirements, DOD components, including 

the military departments, compile annual inventories of activities performed 

on their behalf by contractors under contracts for services.g The legislation 

requires DOD to annually compile and review an inventory of activities 

performed pursuant to contracts to help provide better insights into the 

number of contractor full-time equivalents providing services to DOD and 

the functions they are performing. To date, DOD has submitted annual 

inventories of contracted services for fiscal years 2007 through 2011. 

GAO, however, has found that DOD inventories have significant limitations 

and do not accurately reflect the number of contractors providing services 

to DOD.h

Each of the military departments also identified that their senior services 

managers conduct service contract spending analyses that are either in 

support of or in addition to its inventory of activities performed by contractors. 

In response to GAO’s recommendations, DOD has identified a 

number of actions it is taking to more accurately reflect the number of 

contactors providing services to DOD.

Source: GAO analysis of DOD data.

a

Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub. L. No. 111-383, § 863.

b

Product and Service Codes are used within FPDS-NG to identify and classify the services, supplies, 

and equipment purchased under a contract.

c

National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 807.

d

GAO, Defense Acquisitions: Continued Management Attention Needed to Enhance Use and Review 

of DOD’s Inventory of Contracted Services, GAO-13-491 (Washington, D.C.: May 23, 2013).

e

National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 808.

f

10 U.S.C. § 2330(a)(2) and (3) provide that the senior official responsible for the management of 

acquisition of contract services is the service acquisition executive with respect to the military 

departments and USD(AT&L) with respect to the defense agencies and other components of DOD.

g

National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 807.

h

GAO-13-491. 
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 37 GAO-13-634 Defense Acquisitions 

Section 802 of the National Defense Authorization Act (NDAA) for Fiscal 

Year 20108 required the Under Secretary of Defense for Acquisition, 

Technology, and Logistics (USD(AT&L)) to direct the Defense Science 

Board (DSB) to independently assess improvements to the Department of 

Defense’s (DOD) acquisition and oversight of services.9 The resulting 

March 2011 DSB report, “Improvements to Services Contracting,” 

contained 20 recommendations aimed at improving DOD’s contracting for 

services. These recommendations focused on developing new policies 

and processes to strengthen management and oversight of services 

contracting, designating roles and leadership responsibilities, and 

strengthening the skills and capabilities of personnel involved in services 

contracting, including those in contingency environments. Subsequently, 

section 807 of the NDAA for Fiscal Year 2012 required USD(AT&L) to 

develop a plan, by June 28, 2012, to implement the DSB 

recommendations.10

USD(AT&L) officials told us they did not develop a specific plan to 

address the section 807 requirement, but that the April 2013 Better 

Buying Power Initiative memorandum addresses seven of the eight 

elements. In reviewing the memorandum, we also found that it reflects 

actions to address all of the elements except the one pertaining to training 

and exercises during contingency operations. USD(AT&L) also identified 

23 different actions it has taken or plans to take that officials regard as 

addressing all of the elements the plan was to include, a number which 

pre-date the April 2013 Better Buying Power Initiative memorandum.

The plan was to address, to the extent USD(AT&L) 

deemed appropriate, eight different elements most of which align with the 

DSB recommendations.

 

8

Pub. L. No. 111-84, § 802 (2009).

9

The DSB is a federal advisory committee established to provide independent advice and 

recommendations on science, technology, manufacturing, acquisition process, and other 

matters of special interest to the Secretary of Defense. 

10Pub. L. No. 112-81, § 807 (2011).

Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics

Actions to Address Elements in Section 807 

of the National Defense Authorization Act for 

Fiscal Year 2012
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 38 GAO-13-634 Defense Acquisitions 

Table 4 provides a summary of the actions USD(AT&L) reported as 

addressing each of the eight section 807 elements. To determine if 

USD(AT&L) has taken or planned actions to address the elements in 

section 807, we collected USD(AT&L)’s self-reported information using a 

data collection template, corroborated reported actions with related 

documentation when available, and conducted interviews with 

knowledgeable USD(AT&L), military department, and Defense Acquisition 

University officials to clarify responses. We did not evaluate the 

appropriateness or sufficiency of any actions taken or planned by 

USD(AT&L).
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 39 GAO-13-634 Defense Acquisitions 

Table 4: Summary of USD(AT&L)-Identified Actions that Address Elements of Section 807 of the NDAA for Fiscal Year 2012

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

1. Meaningful incentives to 

services contractors for high 

performance at low cost, 

consistent with the objectives 

of the Better Buying Power 

Initiative established by the 

Under Secretary. 

Note: Text in italics explains 

Better Buying Power Initiative 

objectives.

USD(AT&L) established its Better Buying Power Initiative in September 2010 with its memorandum, 

“Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense 

Spending.” One of the Better Buying Power Initiative focus areas is “incentivize productivity and 

innovation in industry.” The area includes five principle actions that focus on the tie between profit 

and performance, contract type justification, the use of progress payments, a preferred supplier 

program, and independent research and development.

USD(AT&L)’s October 2006 “Acquisitions of Services Policy” memorandum established its process 

for reviewing and approving service acquisitions and requires senior officials or their designees to 

consider various elements in reviewing a service acquisition strategy.a

In December 2012, USD(AT&L) required that DOD personnel developing service acquisitions with an 

estimated value of $1 billion or more participate in Defense Acquisition University’s (DAU) Services 

Acquisition Workshop. The workshop is a four-day, team-based training tailored to individual 

proposed service acquisitions to help develop contractor performance incentives. Through the 

workshop, DOD personnel use the Acquisition Requirements Roadmap Tool (ARRT) to develop their 

service acquisition requirement. This tool is an online resource designed to help acquisition 

personnel write performance-based requirements for service acquisitions and draft several pre-award 

documents. According to USD(AT&L) officials, the ARRT helps personnel articulate desired service 

acquisition outcomes, which helps them to develop contractor performance incentives. USD(AT&L) 

officials stated that as leadership within the military departments participate in the Services 

Acquisition Workshops and are exposed to the use of the ARRT, the use of this tool will become 

institutionalized throughout DOD.

USD(AT&L) issued additional 

guidance in February 2009 that established key services acquisition tenets and required that 

acquisition strategy reviews document the extent to which these key tenets are demonstrated. One of 

these tenets is that the service acquisitions include objective incentives, whenever possible. The 

guidance also provides instruction for how reviewers are to assess the use of such incentives.

In response to other legislative requirements, USD(AT&L) hosted a public meeting in March 2013 to 

obtain the views of experts and interested parties in government and the private sector regarding the 

profit guidelines in the Defense Federal Acquisition Regulation Supplement.b

In April 2013, USD(AT&L) updated the Better Buying Power Initiative with a memorandum entitled, 

“Implementation Directive for Better Buying Power 2.0 – Achieving Greater Efficiency and 

Productivity in Defense Spending.” USD(AT&L), through this initiative, identified the need for 

incentivizing productivity and innovation in industry and government to achieve its goal of greater 

efficiency and productivity in defense spending. The memorandum specifies a number of actions 

DOD plans to take to improve the use of incentives in its acquisitions, including those for services. 

USD(AT&L) officials identified that one of the memorandum’s actions is to provide additional 

guidance on the use of incentives by updating the 1969 “DOD and National Aeronautics and Space 

Administration Incentive Contracting Guide.”

This meeting was to 

help USD(AT&L) revise DOD profit policy guidelines and to identify any modifications to such 

guidelines that are necessary to ensure an appropriate link between contractor profit and contractor 

performance. According to USD(AT&L) officials, any changes to DOD profit policy will affect 

contracting incentives.

c According to the memorandum, a draft of the revised 

guidance is due by July 1, 2013.
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 40 GAO-13-634 Defense Acquisitions 

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

2. Improved means of 

communication between the 

government and the services 

contracting industry in the 

process of developing 

requirements for services 

contracts. 

USD(AT&L) issued a January 2012 “Vendor Communication Plan,” noting its commitment to 

engaging in timely, constructive, and professional information exchanges with the vendor community. 

It noted specific actions it would take, including the publication of industry engagement opportunities,

outreach to small businesses, and holding pre-solicitation conferences.

USD(AT&L) issued its April 2012 “Market Research Report Guide for Improving The Tradecraft in 

Services Acquisition,” to aid contracting personnel in conducting market research. According to the 

guidance, it was developed, in part, to translate DOD’s best practices for conducting and 

documenting market research into standard processes and reports. The guidance includes a 

template for documenting market research to provide for more effective collection and sharing of 

market research across DOD. According to USD(AT&L) officials, the guide helps acquisition 

personnel solicit better information when conducting market research and interacting with the 

contracting community.

In December 2012, Defense Procurement and Acquisition Policy (DPAP) issued a policy 

memorandum requiring that Services Acquisition Workshops be conducted for all service acquisitions 

valued at $1 billion or more, noting that this workshop has improved the quality of requirements 

documents while increasing the likelihood of competition, and shortening acquisition lead times. In its 

April 2013 Better Buying Power Initiative memorandum, USD(AT&L) directed the Director of DPAP 

and the senior services managers to assess the effectiveness of the Services Acquisition Workshop 

and develop lessons learned and best practices by October 1, 2013. According to USD(AT&L) 

officials, improving requirements definition will also promote better communication with the services 

contracting industry as contract solicitation documents will more clearly articulate DOD’s needs. 

3. Clear guidance for defense 

acquisition personnel on the 

use of appropriate contract 

types for particular categories 

of services contracts.

USD(AT&L)’s February 2009 memorandum “Review Criteria for the Acquisition of Services”

established key services acquisition tenets and requires that acquisition strategy reviews include the 

extent to which these key tenets are demonstrated. One of these tenets is that service acquisitions 

include the appropriate contract type.

USD(AT&L) issued a class deviation from Federal Acquisition Regulation section16.601(d)(1) and 

Defense Federal Acquisition Regulation Supplement sections 216.601(d)(i) and (ii), regarding 

limitations on the use of labor hour and time and materials contract types in October 2012. The class 

deviation adds additional requirements for a determination and finding supporting the use of these 

contract types. The class deviation does not, however, direct the usage of certain contract types for 

particular categories of services.

In accordance with USD(AT&L)’s April 2013 update to the Better Buying Power Initiative, the Director 

of Defense Pricing is developing guidance on the appropriate use of contract types that will include 

examples of when to use specific contract types in developing service acquisitions. According to the 

April 2013 Better Buying Power Initiative memorandum, this guidance will encourage acquisition 

officials to consider the full range of contract types before deciding on an acquisition approach, 

although the USD(AT&L) continues to emphasize the use of fixed-price incentive contracts in certain 

situations.d The memorandum further notes that the use of a specific contract type should be 

governed by the nature of the work and deliverables being placed on contract.
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 41 GAO-13-634 Defense Acquisitions 

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

4. Formal certification and 

training requirements for 

service acquisition personnel, 

consistent with the 

requirements of sections 1723 

and 1724 of title 10 United 

States Code (U.S.C.).

Note: Text in italics explains 

sections 1723 and 1724 of title 

10, U.S.C.

Section 1723, title 10 U.S.C., requires that the Secretary of Defense establish education, training and 

experience requirements for each acquisition position or category of acquisition positions, except, pursuant 

to §1733, for critical positions. It also requires, for each career path, that the Secretary of Defense, acting 

through USD(AT&L), establish requirements for completion of course work and on-the-job training and 

demonstration of qualifications. Section 1724, title 10 U.S.C., provides that the Secretary of Defense: shall 

require completion of courses, two years of experience in a contracting position, and a baccalaureate 

degree to qualify for a contracting officer position, with authority to award or administer contracts for 

amounts above the simplified acquisition threshold; shall require a baccalaureate to qualify for a GS-1102 

position and similar military position; may establish developmental programs; and shall establish 

qualifications for the contingency contracting force. 

In August 2012, USD(AT&L) established an Acquisition of Services Functional Integrated Product 

Team (Services FIPT), currently chaired by the Director of DPAP, to determine the certification and 

training requirements for DOD’s acquisition personnel. The Services FIPT is responsible for 

identifying the critical skills, competencies, and training DOD personnel with service acquisition 

responsibilities need. According to USD(AT&L) officials, while the team has met once since it was 

established, it has not yet determined formal certification and training requirements related to 

services acquisitions. USD(AT&L) officials could not provide a timeline for when the Services FIPT 

may fully address such requirements, but officials stated they are gathering information needed to 

make their decisions. Further, in April 2013, USD(AT&L) updated the Better Buying Power Initiative 

and identified the Services FIPT as a means to develop training solutions that address the needs of 

those responsible for managing service acquisitions.

USD(AT&L) officials explained that DOD’s acquisition workforce includes individuals who buy both 

products and services and they have no current plans to develop a separate career path for 

personnel acquiring services. According to USD(AT&L) officials, senior officials responsible for 

service acquisitions across DOD are planning to meet with the Services FIPT to discuss what policies 

and guidance may be needed for acquisition career development in fiscal years 2014 through 2018.

While USD(AT&L) has not determined specific training requirements for personnel acquiring services, 

the Defense Acquisition University (DAU) has developed a number of different service acquisitionrelated classroom courses and online training materials and guidance that are open to all DOD 

personnel. In addition, DAU provides online resources for personnel conducting service acquisitions, 

such as the ARRT.
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 42 GAO-13-634 Defense Acquisitions 

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

5. Appropriate emphasis on 

the recruiting and training of 

services acquisition personnel, 

consistent with the strategic 

workforce plan developed 

pursuant to section 115b of 

title 10 U.S.C. and the funds 

available through the 

Department of Defense 

Acquisition Workforce 

Development Fund (DAWDF), 

established pursuant to section 

1705 of title 10, U.S.C.

Note: Text in italics explains 

sections 115b and 1705 of title 

10, U.S.C.

Section 115b, title 10, U.S.C., requires the Secretary of Defense to submit a strategic workforce plan 

in every even-numbered year to shape and improve DOD’s civilian workforce. The Under Secretary 

of Defense for Personnel & Readiness shall have overall responsibility for developing and 

implementing the strategic workforce plan in consultation with USD(AT&L).e Section 1705, title 10, 

U.S.C., requires the Secretary of Defense to establish DAWDF to provide funds, in addition to other 

funds that may be available, for the recruitment, training, and retention of acquisition personnel. This 

section establishes rules concerning the use and transfer of DAWDF funds and identifies 

USD(AT&L), acting through the senior official designated to manage the fund, as the source of 

guidance for the administration of the fund.

In August 2012, USD(AT&L) established its Services FIPT to determine the training and recruitment 

requirements for DOD service acquisition personnel. The August 2012 charter outlining the Service 

FIPT roles and responsibilities identified that the team is responsible for identifying the critical skills, 

competencies, and training DOD personnel with service acquisition responsibilities need, including 

but not limited to acquisition personnel. The charter also identifies recruitment and retention of 

service acquisition personnel as an area the Services FIPT is to address. According to USD(AT&L) 

officials, the team has met only once since it was established and has not yet determined how it will 

emphasize recruitment and training for personnel with service acquisition responsibilities or how this 

effort will be consistent with the strategic workforce plan. USD(AT&L) officials could not provide a 

timeline for when the Services FIPT may fully address training and recruitment, but stated they are 

gathering information needed to make their decisions. Further, in April 2013, USD(AT&L) updated the 

Better Buying Power Initiative and identified the Services FIPT as a means to develop training 

solutions that address the needs of those responsible for managing service acquisitions.

f

USD(AT&L) officials reported they have taken actions to support acquisition personnel and have 

worked with DAU to make changes to its acquisition workforce curriculum. 
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 43 GAO-13-634 Defense Acquisitions 

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

6. Policies and guidance on 

career development for service 

acquisition personnel, 

consistent with the 

requirements of section 1722a 

and 1722b of title 10 U.S.C.

Note: Text in italics explains 

sections 1722a and 1722b of 

title 10, U.S.C.

Section 1722a provides that the Secretary of Defense shall require the secretary of each military 

department and USD(AT&L) to establish policies and guidance to ensure development, assignment, 

and employment of members of the armed forces in the acquisition field.g Section 1722b provides 

that the Secretary of Defense, acting through the USD(AT&L), shall establish policies and guidance 

to ensure development, assignment, and employment of civilian members of the acquisition 

workforce.

In August 2012, USD(AT&L) established its Services FIPT to determine career development 

requirements for DOD service acquisition personnel. The August 2012 charter outlining the Services

FIPT roles and responsibilities identified that the team is responsible for providing information, 

perspectives, and recommendations to guide decisions on career development for the service 

acquisition workforce. USD(AT&L) officials explained that DOD’s acquisition workforce includes 

individuals who buy both products and services and they have no plans to develop a separate career 

path for personnel acquiring services.

h

According to USD(AT&L) officials, senior managers responsible for service acquisition within the 

military departments and the Services FIPT are planning to meet to discuss policies and guidance for 

acquisition career development, specifically identifying priorities for fiscal years 2014 through 2018. 

Officials emphasized that DOD does not distinguish between personnel acquiring services or 

systems, and has no plans to establish a separate career path for the acquisition of services.

In April 2013, USD(AT&L) updated the Better Buying Power Initiative with a memorandum entitled, 

“Implementation Directive for Better Buying Power 2.0 – Achieving Greater Efficiency and 

Productivity in Defense Spending.” USD(AT&L), through this initiative, identified the need for 

qualification standards for acquisition personnel in leadership positions for all types of acquisitions, 

including services. USD(AT&L) will establish qualification boards to certify DOD acquisition personnel 

as qualified for key leadership positions. According to the memorandum, board certification is 

expected to be a factor in promotion.
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 44 GAO-13-634 Defense Acquisitions 

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

7. Actions to ensure that the 

military departments dedicate 

portfolio-specific commodity 

managers to coordinate the 

procurement of key categories 

of contract services, as 

required by section 

2330(b)(3)(C) of title 10 U.S.C.

Note: Text in italics explains 

section 2330(b)(3)(C) of title 10 

U.S.C.

Section 2330(b)(3)(C), title 10 U.S.C., requires that the senior officials responsible for the 

management and acquisition of contract services dedicate full-time commodity managers to 

coordinate the procurement of key categories of services.

USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of Services,” in December 

2008. This instruction requires senior officials to determine key categories of services for DOD and 

dedicate full-time commodity mangers to coordinate procurement of these services.

i

j 

USD(AT&L) issued its September 2010 memorandum “Better Buying Power: Guidance for Obtaining 

Greater Efficiency and Productivity in Defense Spending.” The memorandum established six key 

categories of spending on services, also known as portfolio groups. USD(AT&L) revised these 

portfolios from six to nine in 2012. The nine portfolios are (1) research and development, 

(2) knowledge-based, (3) logistics management, (4) electronic and communication, (5) equipment 

related, (6) medical, (7) facility related, (8) construction, and (9) transportation services. In its April 

2013 memorandum to update the Better Buying Power Initiative, USD(AT&L) required that each 

senior services manager, including those within the military departments, appoint commodity 

managers for each of these portfolio groups by July 1, 2013.

The military 

departments began to establish commodity manager positions in 2011 to help coordinate the 

procurement of services portfolio groups. Army, Navy, and Air Force commodity mangers explained 

that their roles include providing procurement advice to commands within their military department, 

collection of service contract spending and forecasting data, and assistance in the evaluation of 

individual service acquisitions and command procedures for developing, awarding, and managing 

service acquisitions. USD(AT&L) officials told us that they anticipate establishing DOD-wide 

commodity manager positions within its office, but officials did not have further details or a time frame 

for when such positions may be established.

USD(AT&L) expects to issue a stand-alone instruction in 2014 for service acquisition policy to replace 

Enclosure 9 of DOD Instruction 5000.02. Officials stated that the new instruction will include more 

specific language on the roles and responsibilities of the commodity managers.
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 45 GAO-13-634 Defense Acquisitions 

Element of section 807 of the 

NDAA for Fiscal Year 2012 Actions identified by USD(AT&L) 

8. Actions to ensure that DOD 

conducts realistic exercises 

and training that account for 

services contracting during 

contingency operations, as 

required by section 2333(e) of 

title 10 U.S.C.

Note: Text in italics explains 

section 2333(e) of title 10 

U.S.C.

Section 2333(e), title 10 U.S.C., requires that the joint policy for requirements definition, contingency 

program management, and contingency contracting required by section 2333(a) provide for training 

of military personnel outside the acquisition workforce who are expected to have acquisition 

responsibility during combat operations, post-conflict operations, and contingency operations. The 

joint policy shall also provide for the incorporation of contractors and contract operations in mission 

readiness exercises for operations that will include contracting and contractor support.

USD(AT&L)’s Contingency Contracting Handbook, updated in October 2012, provides tools 

templates, and training that enable a contingency contracting officer to be effective in any contracting 

environment. While the handbook does not provide guidance specifically to military personnel outside 

the acquisition workforce, USD(AT&L) officials explained that such personnel use the handbook as a 

reference document. In addition, according to USD(AT&L) officials, DOD provides tools to assist nonacquisition personnel in contingency environments, such as the Contingency Acquisition Support 

Model for Requirements Generation and the Contingency Contracting Officer’s Representative 

Handbook. The Contingency Acquisition Support Model is a web-based application designed to 

assist those individuals responsible for initiating contacting requirements in a contingency 

environment. The application identifies the documents required to initiate a contract, provides 

templates for the documents, and routes the documents to the appropriate reviewers and approvers. 

The Contingency Contracting Officer’s Representative Handbook provides guidance for personnel 

acting as Contracting Officer’s Representatives in a contingency environment.

k

DOD plans to conduct a joint mission rehearsal exercise in 2014 that will include training for 

contracting during contingency operations. According to a Joint Staff briefing, this exercise 

builds on a model the Army Contracting Command established in its “Operation Joint Dawn” 

exercises in 2011 and 2012 that provided contingency contracting training to deployable military 

and civilian contracting officers. USD(AT&L) officials confirmed that this exercise will include 

non-acquisition personnel.

According to USD(AT&L) officials, contingency contracting training is also being integrated into 

education provided by the National Defense University and Army Staff College. These officials stated 

that non-acquisition personnel would be among the training recipients. 

Source: GAO analysis of DOD documents.

a

USD(AT&L) established its 2006 “Acquisition of Services Policy” memorandum to address the requirement

under 10 U.S.C. § 2330 that it develop a management structure for the procurement of contract services. 

This policy requires that all proposed service acquisitions with an estimated total value of over $1 billion be 

referred to USD(AT&L) and formally reviewed at USD(AT&L)’s discretion. The military departments are 

responsible for reviewing acquisitions valued below this threshold. See Appendix II for more information on 

USD(AT&L)’s actions to address the requirements of 10 U.S.C. § 2330.

b

National Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112-239, § 804.

c

Department of Defense and National Aeronautics and Space Administration, Incentive Contracting 

Guide, October 1969.

d

A fixed-price incentive contract is a contract that allows for the adjusting of profit and establishing the 

final contract price by application of a formula based on the relationship of the total final negotiated 

cost to the total target cost. The final price is subject to a price ceiling, negotiated at the outset. 

Federal Acquisition Regulation § 16.403.

e

10 U.S.C. § 115b(a).

f

10 U.S.C. § 1705.

g

10 U.S.C. § 1722a(a). 

h

10 U.S.C. § 1722b(a). 

i

10 U.S.C. § 2330(b)(3)(C).
Appendix II: Under Secretary of Defense for 

Acquisition, Technology, and Logistics 

Actions to Address Elements in Section 807 of 

the National Defense Authorization Act for 

Fiscal Year 2012

Page 46 GAO-13-634 Defense Acquisitions 

j

Department of Defense Instruction 5000.02, Operation of the Defense Acquisition System Encl. 9, 

para. 3.e (Dec. 8, 2008).

k

10 U.S.C. § 2333(e).
Page 47 GAO-13-634 Defense Acquisitions 

Appendix III: Comments from the 

Department of Defense
Page 48 GAO-13-634 Defense Acquisitions 
Timothy J. DiNapoli (202) 512-4841 or dinapolit@gao.gov

In addition to the contact name above, the following staff members made 

key contributions to this report: Johana R. Ayers; Helena Brink, Burns 

Chamberlain Eckert, Danielle Greene, Kristine Hassinger; Justin Jaynes; 

and Roxanna Sun. 

Appendix IV: GAO Contact and Staff 

Acknowledgements 

GAO Contact 

Staff Acknowledgments
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