The Need for a Strategic Approach to Contingency Contracting

Abstract

The purpose of this study is to examine the applicability of a strategic approach to contingency contracting. Strategic approaches to procurement are successful in both industry and the Department of Defense; however, the contingency arena is often overlooked. Corporations are finding a strategic enterprise orientation to procurement can create or enhance their own competitive position within a market. This is done by identifying opportunities to leverage purchases—thus reducing costs by more than any subsequent trade-off to product market value or identifying opportunities to increase product value by more than any subsequent trade-off to cost. Indeed, the purpose of competitive advantage is to create the largest delta between a cost position and product market value or customer willingness-to-pay. This project applies the principles of competitive advantage and with them, creates a strategic approach to contingency contracting operations. This paper first recommends the DoD create a centralized activity, such as Joint Contracting Command-Iraq/Afghanistan, to consolidate contracting activities within a Combatant Commander’s contingency theater. Secondarily, this discussion suggests the DoD initiate spend analysis of all contracting activities within Combatant Command geographic regions. The DoD can identify opportunities to capture maximum value from key regional suppliers. This framework emphasizes achieving Combatant Commanders’ objectives.