Gaining Leverage Over Vendor Lock to Improve Acquisition Performance and Cost Efficiencies

Abstract

During the acquisition life cycle of a product, technology, or service, the Federal Government often finds itself dependent upon a single vendor to satisfy requirements. Once the Government enters into this long-term business relationship, there may be little leverage to control costs and manage performance. This research paper first describes vendor lock and its implications. The paper covers recent Department of Defense acquisition guidance and a change to the U.S. Federal Statute relative to intellectual property that could impact how a System Program Office deals with single-source vendors. The paper then explores specific steps that the Government can take now to avoid entering into vendor lock situations, as well as additional steps to mitigate the impact of a vendor-locked environment during contract performance. Finally, this paper suggests forms of continuous competition that could protect programs from vendor lock by maintaining the pressure of competition throughout the system life cycle.