Pentagon Recruiting Vendors for Online Marketplace (UPDATED)

Pentagon contractors spend years and millions of dollars building relationships with potential buyers and learning about their needs — or what executives call “business development.”
Connections usually are made via face-to-face meetings or at “industry day” conferences that defense agencies host when they want to share their technology wish lists with potential vendors.
That business model has served the industry well, and no other one has emerged to take its place. But Pentagon officials believe there is a cheaper and faster way for companies to engage with defense buyers.
Industry-day briefings and individual meetings are costly and waste too much of the government’s time, says Jack Blackhurst, director for the Air Force human effectiveness directorate. Further, the current system is not helping contractors target their products to the military’s needs, he says.
Blackhurst, who heads the Defense Department’s “human systems” programs — which focus on how to use technology to help troops train and do their jobs more efficiently — would like to see more of the industry-government communication take place in an online forum that the Pentagon launched in 2011. Called theDefense Innovation Marketplace, the site was designed to match up supply with demand.
“This is part of ‘Better Buying Power 2.0’ to incentivize productivity in industry and government,” he says, referring to the latest policy guidance that Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall unveiled in November.
There needs to be a better way for government to connect directly with companies that have the desired technologies without having to spend considerable time and money conducting meetings, says Blackhurst.
The current approach is inefficient, he says. Industry days, for instance, require that government officials spend a day or two answering questions from industry executives, many of whom are marketers and not technology experts, says Blackhurst. “We want to accomplish the same objectives in a more efficient manner.” Communications should not happen one or two days a year, he says. “It should be 24/7.”
Industry days are “one-way communications,” he says. “We don’t have a true dialogue with industry on the state of technology,” he says. “Typically we get the marketers to come in. They want the information so they can do the analysis that we would do” in the Defense Innovation Marketplace.
There are incentives for both contractors and government buyers to get involved in the Defense Innovation Marketplace, he says. The government needs greater insight into how industry research and development projects, and companies want more detailed intelligence on defense buying priorities, he adds.
In his particular area of business, human systems, the Defense Department spends approximately $500 million a year on technologies. And yet his office has no easy visibility into what the private sector has to offer. “There is no simple system to find out what companies are doing, map that out against what I’m trying to accomplish, and find opportunities for synergy.”
The human systems office published a solicitation on Defense Innovation Marketplace for companies to respond by Feb. 15. It is seeking vendors that can provide mobile training systems — such as video games or computer-based simulators — so pilots or ground troops can practice their skills while deployed. Other sought-after technologies are “interfaces” that simplify the operation of computers and expedite the processing of data that is downloaded by intelligence analysts.
Blackhurst says future solicitations will seek suppliers of protective equipment such as flight suits, body armor and eye-protectors that shield from lasers. Other human systems programs will focus on how to capture social-media data to help military commanders understand the cultural environment of a particular region.
Vendors’ papers received by Feb. 15 will be reviewed and some could be selected to participate in a human systems research conference later this year.
“This is an experiment to see if it works,” said Blackhurst. “We want to get the bugs out before we go full bore with the other technology areas across the Defense Department.”
He says the priority now is to get companies to participate and use the system. “If they don’t engage, they are not helping themselves.”
The Pentagon also is relying on the Defense Innovation Marketplace to keep tabs on the dollars it pays companies for research-and-development projects. The Defense Department reimburses contractors $4 billion a year for independent research-and-development (IR&D) projects, but has relatively little insight into how companies spend those funds.
Currently about 1,300 companies claim IR&D expenses under defense contracts. Over the past decade, the Defense Department lost track of how IR&D funds were spent. It used to be the responsibility of the Defense Technical Information Center to collect that data, but over time company participation dropped off. In 2000, about 10,000 reports were filed, and last year only 700.
A recently revised rule in the Defense Federal Acquisition Regulation Supplement requires all contractors that spend more than $11 million a year on combined IR&D and bidding/proposal costs to submit detailed project data once a year.
Clarification: An earlier version of this post said the Pentagon's top acquisitions executive, Frank Kendall, has asked program offices to promote the Defense Innovation Marketplace.  According to a Pentagon spokeswoman, Kendall has not spoken publicly about the marketplace. "Mr. Kendall certainly supports it as part of his Better Buying Power 2.0 initiatives, but he has not asked program offices specifically to promote the forum," the spokeswoman said.
Photo Credit: Defense Department

Topics: Business Trends, Business Development, Doing Business with the Government, Human Systems, Procurement, Acquisition Reform, Defense Department