December 10, 2019
Section 804 of the defense authorization law, that was put into place four years ago, changed the acquisition rules for the Pentagon. While some were thrilled by the new process, there have been others who have found it to have come with its own set of issues. The Senate has noted that the trend of using Section 804 to build prototypes, as opposed to more traditional approaches, has limited the Navy’s ability to manage programs well resulting in difficultly predicting costs and a possible reduction in competition.
The Senate Appropriations Committee fears that once contractors build prototypes under the new approach, they’ll still need to compete for the right to produce their product, whereas under the current system there is more assurance their product will be produced. Some Congress members fear that without the usual assurances of a payoff, many producers in the industry won’t take the time or money to research new products. The House and Senate negotiators are still working to draft appropriations and authorization bills that may affect the current system.
To read more about the changes to the Pentagon’s procurement process and discussions between committees, click here.