The Acquisition Research Program publishes a weekly email newsletter, Need to Know, in which we highlight key developments in acquisition, policy, government innovation, and research—as well as the latest news about ARP events and research. We hope you enjoy the newsletter, and let us know if you are doing work we can highlight in future issues. 

To subscribe, please send us an email. 

Looking for an old newsletter? Browse previous issues. 

September 10, 2021                                                                                  Issue 69

This week, DoD moved out on a few supply chain initiatives. There’s a new supply chain task force headed up by the under secretary of defense for acquisition and sustainment, and a call for information about the barriers small businesses face in working with DoD—to be used as DoD updates its Small Business Strategy. OMB has released its zero trust strategy and is also looking for public input to shape this new cybersecurity policy.

Our top story showcases excellent research and reporting on the rare earth supply and manufacturing chain, with details on some of the companies looking to reshore refining capabilities in the US. As Stew Magnuson explains, there’s the potential for the mining and refining of these strategic minerals to use resources in coal country, replacing one declining industry with another on the rise.

In ARP updates, we’ve posted a new video from this year’s symposium on the topic of risk and resilience in the supply chain. Each of the presenters gives solid research and insight into the topic. We’ll also point out that one of those presenters, Jerry McGinn, is hosting an event next week continuing the conversation of his symposium presentation.

As we mark 20 years since September 11, a number of events take note of this milestone. The Pentagon will have a ceremony tomorrow morning, livestreamed. And experts from the NPS Center for Homeland Defense and Security share their thoughts on 9/11 and its legacy.

This Week’s Top Story

U.S. Startups Seek to Claw Back China’s Share of ‘Technology Minerals’ Market
Stew Magnuson, National Defense

The elements that occupy 17 spots on the periodic table are categorized as “strategic minerals” by the U.S. government and therefore considered vital for national defense. Along with smartphones, they are used in fiber-optic cables, medical devices and high-performance magnets, which are needed in a host of machines, including jet fighters, wind turbines — and most importantly on the commercial side — electric vehicle engines.

The problem is that China has a near monopoly on the complex process of separating 16 of the 17 elements currently used in these technologies from the source material and refining them to a point where they can be made into useful metals and materials.

The Biden administration’s 100-day review, “Building Resilient Supply Chains, Revitalizing American Manufacturing and Fostering Broad-Based Growth,” released in June, devoted an entire section on strategic and critical materials and minerals, including its thoughts on rare earths.

“Rare earths” are a misnomer and are not that rare. China does have an abundance of them, but they are also found in concentrations high enough to mine in several U.S. states and other nations throughout the world.

MP Materials — along with three other companies interviewed — are seeking to exploit the abundance of rare earths found in the United States and to end China’s monopoly on their refinement and return some of the market share back to the United States.

Read more.

ARP and NPS News

Congratulations to Philip J. Candreva, Senior Lecturer at NPS, for receiving the Graduate School of Defense Management Executive Master of Business Administration Teaching Excellence Award. Phil has published and presented his research on the defense budget and cost growth at several ARP symposiums. His latest paper was “A Critical Look at ‘Use or Lose.’”

18^th Annual Acquisition Research Symposium, Panel 6: Risk and Resilience in the Supply Chain (Video)

Papers and panelists: "Quantifying Systemic Risk and Fragility in the U.S. Defense Industrial Base" by John Ullrich. Read the Paper and Presentation.

"Design and Development of a Risk Assessment Tool to Enhance Decision Making Capabilities of Federal Acquisition Data by Leveraging Web Information" by Ningning Wu. Read the Paper and Presentation.

"Building Industrial Resilience with a Little Help from our Friends: Adapting DoD Acquisition Processes to Facilitate Allied and Partner Engagement" by Jerry McGinn. Read the Paper and Presentation.

Special Alumni Hour focuses on 9/11 20th anniversary, U.S. fight against terrorism
Center for Homeland Defense and Security at NPS

Acquisition and Innovation

DOD's silence on CMMC is worrying industry, trade groups claim
Lauren C. Williams, FCW

DoD Forms New Task Force To Shore Up Supply Chain
Brad T. Williams, Breaking Defense

Should You File Your Bid Protest Before GAO or COFC: For the Record, the Record Can Make All the Difference
Katherine Burrows and Eric Valle, JD Supra

Eight bid protests over CIO-SP4 solicitation yet to be resolved
John Hewitt Jones, Fedscoop

Space Force expects $1 billion in contracts in first year of Space Enterprise Consortium Reloaded
Nathan Strout, Defense News

Research

What Is DoD Buying? Defense Acquisition Trends 2020
Rhys McCormick, Center for Strategic & International Studies

How to train supply managers – Necessary and sufficient purchasing skills leading to success
Klaas Stek and Holger Schiele, Journal of Purchasing and Supply Management

Policy

Federal Zero Trust Strategy
OMB is accepting public comment on the Federal Zero Trust Strategy through September 21, 2021.

Notice of Request for Comments on Barriers Facing Small Businesses in Contracting With the Department of Defense
Federal Register

Events

Pentagon 9/11 Observance Ceremony
September 11, 2021  |  09:00am ET

Building Industrial Resilience with a Little Help from Our Friends
Center for Government Contracting at George Mason University
September 15, 2021  |  10:30am-12:00pm ET

CISA to Host Fourth Annual National Cybersecurity Summit
Cybersecurity & Infrastructure Agency
Wednesdays in October

Defense and Federal Government

DOD deputy secretary sets Jan. 1 deadline for transferal of chief management officer assets
John Hewitt Jones, Fedscoop

Hicks Says DOD to Link Strategy, Capabilities to Meet China Challenge
Terri Moon Cronk, DoD News

Next Pentagon budget will detail climate change spending
Sebastian Sprenger, Defense News

Biden moves to boot Trump loyalists from advisory boards
Daniel Lippman, Politico

GSA names Raylene Yung director of Tech Modernization Fund
John Hewitt Jones, Fedscoop

Gilday: New task force will help US Navy speed up unmanned system integration
Megan Eckstein, Defense News

Top US Air Force general supports proposed F-35 cost constraints
Valerie Insinna, Defense News

Acquisition Tips and Tools, with Larry Asch

We Are Struggling to Buy Services

I have worked on Major Weapon Systems, Defense Business Systems, and Service Requirements. The hardest requirements to define and articulate are for services. Contracts for services are governed by complicated rules and procedures in FAR Part 37 and DoDI 5000.74. In addition to the extra rules associated with service contracting, these requirements frequently enter contentious territory on differences in services requirements, e.g., Cloud Services, XaaS, Lawn Cutting, Staff Augmentation, and Advisory & Assistance Services (A&AS). This makes it difficult to define evaluation and selection methods, OCI clauses, intellectual property rights, software maintenance agreements, pricing arrangements and contract types, performance requirement standards, and payment arrangements. Yes, service acquisitions are hard.

Service acquisition teams need better guidance and training, starting with understanding what they are buying and requirements development. Until we improve in service acquisition, th\/*e opportunity for protest, ineffective pricing that does not leverage commercial best practices, change order cost increases, claims, and administrative nightmares are rampant.

I found this very interesting recent Nash & Cibinic article by Vern Edwards: “PERFORMANCE WORK STATEMENTS: The Policymakers’ Monster—Where Is Our Theseus?” A couple excerpts below:

“From 1979 to the present day OFPP and agency acquisition policymakers have devoted a lot of time and effort to leading federal agencies into a labyrinth of half-baked thinking and service contracting policy confusion, at the heart of which they placed the idea of the performance work statement, a policy minotaur.”

“Though our review of what agencies called performance-based contracts…. raises concern as to whether agencies have a good understanding of performance-based contracting and how to take full advantage of it. Some agency officials said that they would like better guidance on performance-based contracting, particularly with respect as to how it can be applied in more complex situations. Agency officials also said that there is a need for better criteria on which contracts should be labeled as performance based.”

I’m sure there are many in Government who say there is no problem as we:

• Have numerous PWS templates, and we don’t need to tailor for use
• Can cut and paste from previous samples
• Can continue to award low-bid race to the bottom A&AS support contractors who the Government needs to train rather than bring their own expertise and experience
• Can treat all services the same, i.e., Performance Based Services output versus staff augmentation A&AS
• Are buying Cloud Services, XaaS etc., without any problems. Here the Acquisition community does not agree, and a group of Government and Industry volunteers have been working on developing a How to Buy Cloud Services Guidebook. Thank you OMB/OFPP! This is the type of initiative we need more of!!!!!
• Don’t use Time and Materials/ Labor Hours approval; when it requires higher level approval, it becomes rarely used. Change the culture to the importance of the acquisition team and Contracting Officer determining the right Contract Type and have PM and CO approve.  

If you think we don’t need help, ask your acquisition folks and/or A&AS contractors to walk you through the steps and elements of preparing a Performance Requirements Summary (PRS) as part of the PWS to include Performance Standards, Acceptable Quality Level (AQL), Incentives and Remedies and how to capture into a surveillance plan in the QASP. If your acquisition folks or A&AS contractors can walk you through this process or even come close, they are keepers. Hopefully they can execute too.

Help Needed:

There are numerous challenges in service acquisitions. The DoDI 5000.74 and the Services team were making progress BUT what happened? We need much more. We need to:

• Review the whole Performance Based concept and realize there is no one size fits all

• Dissect the different types of services and provide guidebooks, samples, and training
• Change the “Cut & Paste-itis” culture
• Determine how to buy staff augmentation without depending on overly specific Personnel Qualifications, Key Personnel, and resumes
• Train how to define measurable performance requirements and proper surveillance

Each service acquisition is different, and we need help for a very serious issue of how to buy Services and reengineer how we buy and then effectively administer the contract.