Seven Steps
to performance-based acquisition
    
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step 2

DESCRIBE THE PROBLEM THAT NEEDS SOLVING
Decide what constitutes success.

Just as important as a clear vision of desired results is a clear vision of what will constitute success for the project. These are two distinct questions: Where do I want to go, and how will I know when I get there?

In the Joint Direct Attack Munitions (JDAM) research and development acquisition, for example, affordability (in terms of average unit production price) was a key element, along with "how well the product met the live-or-die criteria." Affordability was communicated in no uncertain terms from top-level management to the acquisition team, and from the acquisition team to the competing contractors. As the project manager recalled--

I had a strong sense of empowerment... from the Air Force Chief of Staff who said basically, "Do what you have to do to get the products under $40,000"...



With that clear a mandate and the benefits of head-to-head contractor competition, the final, winning proposal included an average unit production price between $14,000 and $15,000... far lower than the original cost target of $40,000 and the original cost estimate of $68,000 per unit.

So it is important to establish a clear target for success, which will then serve to focus the efforts of the integrated project team in crafting the acquisition, the contractors in competing for award, and the government-industry team throughout contract performance.

Read the JDAM success story.


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