Maximizing Resources Through Secondary Reparable (SECREP) Residual Demand Management.

Abstract

The need for reform in the Department of Defense's (DoD) acquisition and management of services acquisitions has been recently highlighted by the Government Accountability Office and by top leadership within the DoD acquisition community. However, problems with the acquisition of business-to-business services have not been limited to purchasing in the public sector; industry has also struggled with the effective acquisition of business-to-business services because the complexities and unique nature of services render the definition of requirements and the specification and measurement of contractor performance problematic. Despite these difficulties, little research has been conducted to examine the determinants of sourcing performance in services acquisitions. This study uses structural equation modeling to examine the relationships between service quality and its determinants in the U.S. Air Force's acquisition of business-to-business services. Data were collected by surveying a sample of contract administrators assigned to services acquisitions. The results of a statistical analysis on this data suggest that requirement definition sufficiency and government contractor communication strongly affect the contract outcomes of service quality and regulatory and statutory compliance. A non-positive relationship was also found between the extent of compliance with regulations and statutes and the quality of the service rendered. Other results include a significant relationship between the level of commitment by the internal customer and the sufficiency of the requirement definition as well as the deleterious effects of personnel turnover on compliance with regulations and statutes. While the results present several practical implications for the DoD's acquisition and management of service contracts, this study also makes contributions to service quality theory in business-to-business contexts. A new service quality framework is proposed for customer-defined services, along with a revised scale for measuring service quality in business-to-business applications.