Sourcing in the Air Force: An Optimization Approach

Abstract

Faced with budget cuts and other resource constraints, the DoD must monitor its procurement process to ensure a continuous flow of critical supplies and services. One aspect of current transformation in DoD is the use of a strategic sourcing approach for the procurement of installation-level services. Using the Air Force's strategic sourcing process as our context, we develop an optimization model for selecting a set of bids among multiple offeror proposals for installation services. The selection achieves the most favorable objective based on balancing the confidence performance level in past performance of the offerors and the cost to the Air Force.