Friday, June 3, 2011

Assa d, in New Position, To Help Pentagon Get Best Deal

There will be a new negotiator at the table as the Pentagon and Lockheed Martin hammer out a pricing deal for the latest batch of F-35 Joint Strike Fighters.
Pentagon veteran Shay Assad has been named the U.S. Defense Department’s director of defense pricing. (File photo / U.S. Defense Department)
Shay Assad, the newly named director of defense pricing, will help the U.S. Defense Department buy weapons at a lower cost than official budget estimates. The creation of the new position is part of the Pentagon's quest to drive down the cost of weapons at a time when defense budgets are constricting.
"We simply intend to be much more professional, much more capable, when it gets to sitting at the table and negotiating the price on behalf of the taxpayers," Assad said during a June 2 briefing at the Pentagon.
The creation of the position is part of Pentagon acquisition executive Aston Carter's Better Buying Power initiative to buy more for less money. Part of that initiative is looking beyond program cost estimates and determining what a program should cost.
In his new role, Assad will help program managers hit these should-cost targets, which will be set at levels less than official budget estimates.
In addition, he will spend more time improving the contracting and pricing work forces in "improving their skills on what it is we pay on the goods and services we buy."
One of the major elements of this is to transform the Defense Contract Management Agency (DCMA), Assad said. DCMA has hired 300 pricing analysts who will assist contract officers during negotiations for weapons, sustainment, services and other contracts. It will take 18 to 24 months to bring this work force up to speed, Assad said.
Officials are also creating an online system that will "enable our contracting officers to get insight into the financial aspects of the companies that we deal with in a real-time way," he said. The system, which already includes rate data, is being tested.
Currently, it could take contracting officers months or even a year to compile this type of data. Soon it will all be organized under one roof and should take minutes to retrieve.
"What we're really trying to do is have contracting officers push away from the table and say: 'I did very well by the taxpayers,' " Assad said.
Assad previously served as director, defense procurement and acquisition, a position he has held since 2006. Richard Ginman, Assad's former deputy, has assumed that position and is responsible for general acquisition and contract policy.
While Assad will conduct peer reviews for sole-source programs that cost more than $1 billion and selective deals above $500 million, Ginman will work on competitive programs.
Assad will be "intimately involved" supporting the acquisition of the F-35, the Pentagon's most expensive program. DoD converted the program to a fixed-price construct last year and has entered new negotiations for the fifth batch of production aircraft.
The F-35 negotiations will likely not wrap up until this fall, Assad said.

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