DOD services contract chief considers new small biz policy

The head of Pentagon services contracting wants to explore a new policy that would mandate the creation of special small business set-asides for all services contracting administration work.

Ken Brennan, the deputy director of services acquisition, said the Defense Department's ongoing effort to more widely establish Service Requirement Review Boards (SRRBs) had uncovered data indicating that most DOD purchasers of administrative services procure it in "little chunks."

"I'm actually contemplating and working through the potential development -- I don't want to get too far out ahead of this; it's not endorsed through the decision process -- but, the kinds of things I'm thinking about are issuing a policy guidance memo that says, 'Hey, if you're going for admin, you really ought to be going only small business, it ought to be local and it ought to likely be a set-aside or within the small-business rules,'" he said Monday during a joint event hosted by the Professional Services Council and Inside Defense.

"There is probably some real benefit there to do a strategic sourcing or category management for that capability and create a vehicle that meets those things I just mentioned -- small business," he continued. "We'll see how that goes; that's the kind of thing that would definitely go out for public comment. That's the kind of mindset I'm thinking though."

Brennan participated in Monday's event in an aim to explain in greater detail DOD's recent policy changes for services contracting, which stem from a desire to get a better handle on managing the area. The Pentagon spent $145 billion on services in FY-15, and the contracts typically account for half of DOD's acquisition budget.

A key aspect of the new policy is the broad establishment of SRRBs, which are expected to save $3 billion over the next five years, according to the Pentagon's FY-17 budget submission. Various "tripwires" that trigger SRRB intervention include labor rates and performance, bridge contracts, use of subcontractors, single-bid procurements and best-value, source-selection premiums.

Brennan said recent policy changes to establish greater DOD oversight on services contracts were only in the early stages of a process that could take more than a decade.

"It's a 15-year effort that we're about three years into," he said. "There's a lot of room for growth yet, but it's going to be a decade at least. My goal is that services becomes less of a standalone and more part of general culture and policy. We'll see if I'm successful on that."

Alan Chvotkin, the executive vice president and counsel of the Professional Services Council who appeared alongside Brennan, said he hoped DOD could institutionalize its process a lot sooner, given the rapidly changing nature of the commercial marketplace where many services companies also work.

"I hope it doesn't take 15 years to memorialize this," he said. "The nature of services changes a lot. I'm really concerned it'll take much too long, and want to see what we can do to accelerate it if at all possible."