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The 2002 National Defense Authorization Act set goals for the Department of Defense to achieve savings in service contract expenditures over a ten-year period through changes in contracting practices and improvements in management techniques. The authors of this report investigate ways to measure whether the Air Force is achieving these cost-reduction goals and discuss the primary steps in the measurement process.

Defense contracts - United States. --- Defense contracts --- Defense contracts --- Appropriations and expenditures --- Forecasting --- United States. --- Appropriations and expenditures. --- United States. --- United States. --- Materials management. --- Procurement.

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The authors examine whether and how well-respected commercial firms apply performance-based practices within their facilities and food services contracts. Communication between buyers and providers is critical; a small set of metrics is helpful for performance management; and incentives and a flexible contract can be of value.

Defense contracts --- Performance contracts --- Cost effectiveness --- United States. --- Facilities. --- Procurement.

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To assist the Air Force in the process of changing the way it purchases services, this report reviews related commercial sector practices and suggests metrics to track progress and refine services procurement efforts over time.

United States. --- Appropriations and expenditures --- Evaluation. --- Materials management. --- Procurement.

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This annotated briefing examines the incentives of participants in the Air Force's sourcing process (encompassing both A-76 competitions and direct conversions). The goal of this research is to suggest how process participants can best be induced to start and complete cost-effective sourcing studies that will help the Air Force realize its goal of reducing the cost of support activities without inappropriately reducing military capability or quality of life. Personnel at the Air Staff, major commands, and installations play important roles in identifying activities to be studied and conducting sourcing studies. Although the Air Staff has strong fiscal incentives to start and complete sourcing studies, it relies on command and installation personnel actually to carry out sourcing activities. Major command leadership, due to informational asymmetries, is largely dependent on its functional and installation personnel to identify prospective studies and complete them successfully. Unfortunately, functional and installation personnel have strong incentives to work against sourcing studies, and installation commanders' tenures are often too short to affect the process adequately. The Air Staff has passed down operations and maintenance budget cuts to the major commands, providing them with fiscal incentives to perform sourcing studies as well as pursue other cost-saving activities. However, the Air Staff faces a difficult challenge associated with appropriate allocation of budget cuts, and these cuts do not address the challenges that major commands face in motivating their functional and installation personnel.

Contracting out --- Privatization --- Cost effectiveness. --- United States. --- Procurement. --- Planning. --- Appropriations and expenditures.

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Under pressure to improve performance and reduce expenditures, the Air Force is reexamining the source of provision of many of its support activities such as installation services. This documented briefing describes how innovative commercial customers and world-class providers of facility management services (analogous to base operating support services) use performance metrics in their sourcing decisions. These firms use performance metrics to inform the original make/buy decision, to guide the source selection, to manage the customer/provider relationship, and to improve the provision of services over time. Although the practices of innovative commercial firms differ dramatically from the Air Force's traditional approach to sourcing, they are broadly compatible with current Air Force efforts to extend the benefits of acquisition reform to services acquisition. In addition to using performance metrics to focus its limited sourcing resources on those activities that offer the highest potential returns in performance and cost, to guide the source selection decision, and to better manage its relationships with external providers, the Air Force can use performance metrics to improve the performance of its in-house provider organizations

Contracting out. --- United States. --- Procurement.