RESTON, Va., 22 Dec. 2007. Industry vendors should anticipate a potential impact on proposal costs and acquisition cycle time as a result of Department of Defense's (DoD's) Acquisition Transformation Initiatives, according to a recent report from the Input Executive Program (IEP). The Initiatives are aimed at improving risk identification, requirements development, and oversight to streamline the acquisition process for the DoD. Many of those initiatives may lengthen the acquisition cycle and drive up contractors' costs of bidding.

"DoD is making strides in improving its acquisition processes, but it may be a tradeoff for contractors," states Deniece Peterson, senior analyst for IEP. "Better risk management and requirements development are clearly beneficial for everyone, but contractors will need to adjust with DoD as it transitions."

For example, DoD has developed several methodologies for identifying and mitigating program risk much earlier in the development process, some of which shift focus from cost as the primary vendor selection criteria to vendors' risk assessment and management capabilities.

This process may ultimately enable DoD officials to take on more of the risk that often falls to contractors, but more thorough risk analysis may stretch the already lengthy concept-to-implementation timeline. In addition, contractors may need to spend additional resources on beefing up proposals to meet the additional criteria.

"A more streamlined DoD acquisition process holds a lot of promise for government and industry, alike," Peterson says, "but there may be rough roads ahead as everyone gains a better understanding of what changes there will be, and how to make the most of the new processes."

IEP's report, "DoD's View on Acquisition Transformation: Is It on Your Radar?" is available to Input Executive Program members.