In the world of government contracting, achieving pricing excellence is a paramount goal. But what does pricing excellence mean from both a buyer's and seller's perspective? How can we bridge the gap between these two viewpoints? These are questions that have been increasingly relevant, especially during uncertain times. The following is an excerpt from a 2023 GCP Summit breakout session presented by Mr. Kelley Poree, Assistant Chair Acquisition Management – Naval Postgraduate School.
Having transitioned from military service to contracting, Kelly highlighted the challenges he faced in understanding the intricacies of pricing. He also stressed the importance of education and training, both for buyers and sellers, in the complex world of government contracting.
Government/Industry Co-Education: What Is It?
Government-industry co-education isn't a new concept, but it gained significant attention in 2019 when researchers from RAND were tasked with assessing the acquisition workforce's training and development effectiveness. They discovered knowledge gaps in areas such as business acumen, industry knowledge, and industry motivations. While it was clear that these gaps existed, their extent remained uncertain.
The study's recommendations revolved around defining the essential knowledge needed for cost and price analysis and contract negotiations, differentiating between "nice to know" and "need to know" information. Another key recommendation was to foster frequent, fair, and transparent dialogue between the government and industry.
Challenges in Achieving Co-Education
One of the central challenges in achieving government/industry co-education is the timing of interactions between buyers and sellers. Typically, they first meet during negotiations, which occur in the execution domain. This timing is far from ideal for fostering collaborative discussions, given the external and internal pressures both sides face.
Internal and External Uncertainties
The execution domain is where buyers and sellers meet to hash out deals and negotiate contracts. In this space, they must navigate external pressures like strategic competition with other nations and persistent threats. Internally, they grapple with variations in people, products, and processes. The pressure to adapt and survive is palpable.
Aligning Education, Training, and Execution
Kelly emphasized the need to align education, training, and execution. The cumulative effect of these three domains significantly impacts contract outcomes. Education and training should prepare individuals for the realities of the execution domain, where decisions must be made swiftly.
To achieve pricing excellence, minimizing variations is key. Variations exist in all domains – education, training, and execution. Addressing these variations is crucial to achieving consistent and reliable outcomes. Poree highlighted five essential questions:
- What data is common across major weapons systems and contract negotiations?
- What common tools and resources can be used across the board?
- Are there shared best practices that can be incorporated into education and training?
- Can we create a common language and understanding for all stakeholders?
- How can we establish feedback loops to continuously improve education, training, and execution?
By addressing these questions, government and industry can work together to reduce variations and improve pricing excellence.
Government/industry co-education is a promising approach to bridging the gap between buyers and sellers in the world of government contracting. By aligning education, training, and execution, and by focusing on common goals and shared knowledge, we can work towards achieving pricing excellence during uncertain times. This collaborative effort is essential in a constantly evolving national security and defense environment. With commitment and coordination, both government and industry stakeholders can navigate the challenges they face and contribute to the success of their missions.
Topics like this and many others were featured at the 2023 Government Contract Pricing Summit in San Diego, CA. Attendees walked away with actionable, real-life concepts they could begin to put into practice. Breakout sessions such as this, along with keynote addresses from government/industry luminaries and multiple networking opportunities, made for a jampacked week of professional growth for everyone involved.
Start making plans today to join us next June 11-13, 2024 for an experience that will serve you well for years to come! To learn more about our unique event or to become a subscriber to the GCP Summit, visit our website.