DOD Acquisitions: Opportunities May Exist to Increase Utility of Nondevelopmental Items Pilot Program

Abstract : In its 2010 Quadrennial Defense Review of strategies and priorities, the Department of Defense (DOD) found that it needed to better involve commercial and small business companies so that it could acquire innovative solutions to meet military requirements. As recognized by Congress, federal regulations included a preference for acquiring commercial items and other nondevelopmental items, but there were no procedures that incentivized private companies to develop items to exclusively meet a military purpose.1 To address this gap, Section 866 of the Ike Skelton National Defense Authorization Act (NDAA) for Fiscal Year 2011 established a pilot program that authorized DOD to award contracts for military purpose nondevelopmental items (MPNDI) to companies that had not contracted with DOD for at least a year.2 The pilot program was designed to test whether streamlined acquisition procedures similar to those available for commercial items can serve as an incentive for these nontraditional defense contractors to innovate in areas useful to DOD.3 Section 866 of the NDAA for Fiscal Year 2011 mandated GAO to assess DOD s use of the pilot program. Specifically, GAO was to assess the extent to which the pilot program (1) enabled DOD to acquire items that otherwise might not have been available to DOD; (2) assisted the department in the rapid acquisition and fielding of capabilities needed to meet urgent operational needs; and (3) protected the interests of the United States in paying fair and reasonable prices for the item or items acquired. This report addresses the extent to which DOD awarded contracts that met these goals and issues potentially affecting use of the pilot program.