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Army Acquisition Chief Looks Beyond Fixed Pricing

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By David Perera April 2, 2007

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Congress wants the Army to expand its use of firm fixed-price contracts, according to its top procurement executive.

But no single contracting method can reform the acquisition process, said Claude Bolton, assistant secretary of the army for acquisition, logistics and technology.

For one thing, the Army has used plenty of firm fixed-price contracts in the past. “Some of you may harken back to the 1980s when we did that more…You harken back to the World War II, you’ll see it again. You go back to the Civil War, you’ll see it, too,” Bolton said Thursday at the annual Program Executive Office Enterprise Information Systems industry day in Bethesda, Md. (For more blog entries from the conference, click here.)

Good contracting requires training, Bolton said. He told a story of meeting with a logistics program manager who, despite huge contractor cost overruns, was confident of the outcome because the contract was firm fixed price and the contractor was tied to a large parent corporation.

“This young man said, yessir! …‘I’ve got a core firm fixed price contract! They’ve got to book it!’” Bolton recalled. But, it turns out the parent corporation was divesting itself of the contractor, which means there would be no one to absorb the costs. “The manager almost fainted,” Bolton said. “You have to educate and train the people,” he later told Tech Insider.

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