Seven Steps
to performance-based acquisition
    
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Market Research:
From Build-to-Spec to State-of-the-Shelf
Excerpt from "Market Research," Standardization Document 5, Department of Defense

Situation:
The near term digital radio program took a different approach to acquiring the latest technology in data communications for the Army. In November 1994 the PEO and PM were tasked to determine the "best" industry could offer in supplying the Army with a new communications system based upon a performance specification and full and open competition. To meet the delivery dates, the proposed system had to be "state of the shelf" with an open architecture to support future growth.

Response:
Industry was involved early in the process. Manufacturers were given an executive summary with draft performance specifications in January 1995. Face-to-face discussions with all interested bidders, which took place before release of the draft RFP (March 95), were conducted to determine what industry was capable of providing. Extensive use of an electronic bulletin board enabled faster dissemination of information and allowed frequent and open dialogue with interested suppliers. A performance specification that specified only minimum requirements allowed use of latest technology. A technical demonstration was part of the evaluation process. As a result of the market research, several changes were made to the acquisition. They included a reduction in environmental testing, added modeling and simulation, added technical features, a cost plus incentive fee added to the RFP for certain engineering efforts, and a reduced high capacity throughput (to be in line with industry standards).

Communication with industry shaped the specification and RFP. The end result is an Army radio with throughput performance twice that required by the performance specification. The radio was obtained for about one-fourth the cost of a new development. It contains about 95% commercial-off-the-shelf software. The entire process, from receipt of the mission to award of the contract, took fourteen months.

Lessons learned:

  • Ensure performance specifications include a clear understanding of the intended use and operational environment.
  • Involve industry early to get a realistic assessment of what they can accomplish.
  • Maximize the use of face-to-face discussions.
  • Use competition to provide leverage.

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