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Hearing Of The House Committee On Armed Services- Can DOD Improve Innovation And Competition In Acquisition By Better Utilizing Small Business?


Location: Washington D.C.

"Today's hearing is the last in our series of ‘hypothesis' hearings examining the ways in which DOD sometimes loses value in defense acquisition. Our task today is to determine whether DOD can better utilize small business to improve innovation and competition in acquisition. Our hypothesis is that the Department can and should better utilize small business to access new innovative technologies and to enhance the discipline that competition brings to acquisition.

"Most people intuitively understand that truly revolutionary ideas and technologies almost never come from the dominant firms in an industry. In some cases, those firms may actually generate some of these ideas, but their institutional interests and limits usually keep them from developing truly revolutionary products. So we are quite likely to find that the ‘next big thing' in defense acquisition will be something developed by a small firm or a non-traditional defense supplier. How do we create a defense acquisition system where DOD is able to identify and take advantage of these breakthroughs? In an era when DOD is hoping to acquire innovative technologies faster and cheaper, it seems highly likely that small businesses will need to play a significant role.

"Innovation is not the only reason to believe that better small business participation in defense acquisition can improve DOD's outcomes. The sheer size and complexity of today's largest defense firms can create a host of organizational conflicts of interest and can make it difficult for them to meaningfully compete with one another. Properly structured acquisition programs, as mandated by the Weapon Systems Acquisition Reform Act of 2009, can allow for smaller firms, including small businesses, to bring their independence to the contracting process and to increase competition for significant elements of defense acquisition.

"The Department of Defense, like the Federal Government as a whole, has a suite of programs in place to support and assist small businesses. Our question today is do those programs posture us in the most productive way to capitalize on the advantages of small business in defense acquisition."

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