Services Supply Chain in the Department of Defense: Defining and Measuring Success of Services Contracts in the U.S. Navy

Abstract

Department of Defense (DoD) spending on services has been trending upwards for over a decade and, as of 2011, it accounted for 56% of total contract spending. The increased reliance on services contractors has prompted the Government Accountability Office (GAO) to look more closely at the acquisition and contract management process. In this research we address the following questions: (1) How do different stakeholders define successful services contracts within the Navy? (2) How do different stakeholders measure services contracts within the Navy? and (3) how should Navy services contracts be defined and measured? We conducted a survey of 168 key stakeholders. We discovered that when defining and measuring the success of a service contract all stakeholders tend to utilize outcome-related factors over process-oriented factors. We believe this is because outcomes tend to drive perceptions of success more than processes and are more easily quantifiable. Metrics used to measure success are typically related to cost, schedule, and performance. Based on these findings, we provide recommendations on establishing better internal control measures, putting in place an operational audit process, and creating a standardized reporting process.