Defense Contracts: Practical Solutions for Common Challenges

Government defense contracting is a highly complex landscape requiring contracting officers (COs) to balance compliance, cost-effectiveness, and mission success. With evolving rules, workforce shortages, cybersecurity risks, and contractor performance concerns, COs must adopt a strategic approach to overcome these challenges.

The TARGET framework—training, accountability, regulations, governance, efficiency, and technology—provides a structured approach to navigating these complexities and implementing actionable solutions. By following this method, COs can improve contract management, enhance efficiency, and mitigate risks while ensuring the integrity of the procurement process and delivering value to national security initiatives.

Training and Workforce Development

A major challenge in government defense contracting is workforce shortages and skill gaps. A well-trained acquisition workforce is crucial for effective contract management, compliance, and cost control. The increasing complexity of acquisition policies and regulatory requirements makes it essential for COs and procurement professionals to continually evaluate skill gaps and expand their knowledge base.

The Federal Acquisition Regulation (FAR) acknowledges that bundling can offer substantial benefits to the government but also highlights its potential negative impact on small business participation. Therefore, agencies must make a written determination that it’s necessary and justified before proceeding with such an acquisition strategy.

Best Practices:

• Leverage Defense Acquisition University (DAU) Courses: DAU provides essential training programs that upskill COs and acquisition professionals, keeping them updated on evolving procurement practices.
• Foster Transparent Communication: Encouraging interagency collaboration and knowledge-sharing improves coordination and decision-making. Training should integrate lessons learned from multiple agencies and contracting environments.
• Implement Knowledge Transfer Programs: Establish mentorship initiatives where seasoned professionals train junior staff to bridge knowledge gaps and retain institutional expertise. A robust training pipeline ensures continuity and mitigates the impact of workforce attrition.
• Encourage Certifications and Continuous Learning: Professional certifications, such as the Certified Federal Contracts Manager or Defense Acquisition Workforce Improvement Act credentials, enhance credibility and competence in procurement roles.
• Engage with Small Business Offices: Collaborate with your agency's Office of Small Business Programs to evaluate the impact of bundling on small business participation. The staff can provide guidance and resources to help structure inclusive and competitive procurements.
• Do Document Justifications: If bundling is deemed necessary, document the rationale thoroughly, including analyses of the benefits versus potential drawbacks, especially concerning small business participation. This documentation is crucial for transparency and compliance with acquisition regulations.

Accountability and Contractor Performance

Ensuring high contractor performance while preventing fraud and waste or poor execution is key to mission success. COs must establish accountability mechanisms to maintain oversight of contractors and their deliverables. The procurement process should prioritize contractors who demonstrate a strong track record of performance and compliance.

Best Practices:

• Effectively leverage the Contractor Performance Assessment Reporting System: It enables COs to track contractor performance, ensuring accountability and informed decision-making.
• Conduct Regular Compliance Audits: Periodic audits identify performance issues early and ensure adherence to contractual obligations. Routine oversight deters fraudulent activity and prevents mismanagement of taxpayer funds.
• Implement Performance-Based Contracting: Tying payments to performance metrics and deliverables enhances contractor accountability. Contracts structured with incentive-based mechanisms reward quality performance and penalize subpar execution.
• Establish Clear Key Performance Indicators (KPIs): Defining measurable KPIs ensures that expectations are communicated and monitored. These should be aligned with mission objectives and include quantifiable metrics, such as cost efficiency, timely delivery, and quality standards.
• Strengthen Contract Enforcement Mechanisms: Contracts should outline strict consequences for non-compliance, including termination clauses and financial penalties.

Defense Contracts: Regulations and Compliance Management

The complex landscape of federal procurement regulations—such as the FAR, the Defense Federal Acquisition Regulation Supplement, and agency-specific rules—can create compliance challenges for COs. Understanding these is fundamental to maintaining ethical contracting practices and avoiding legal pitfalls.

Best Practices:

• Stay Updated on Regulatory Changes: Regularly monitor updates on regulatory websites like Acquisition.gov.
• Implement Contracting Compliance Checklists: Checklists help standardize compliance across contract management teams. Developing a standardized framework reduces inconsistencies and errors in procurement operations.
• Use Automated Systems: Automating compliance tracking minimizes errors and improves regulatory adherence. AI-driven contract management tools can help analyze regulatory changes and provide alerts on updates.
• Collaborate with Legal Advisors: Ensuring compliance requires close coordination with legal experts to interpret regulatory requirements correctly and apply them appropriately in contract structures.

Governance and Risk Mitigation

Strong governance and risk mitigation strategies help prevent operational and reputational risks associated with defense procurement. Effective governance frameworks verify that procurement decisions align with strategic objectives and fiscal responsibility.

Best Practices:

• Strengthen Cost Control through Earned Value Management: This provides insights into project performance and cost-effectiveness, ensuring that budget forecasts align with actual expenditures.
• Draft Clear and Well-Structured Solicitations: Ambiguities in solicitations can lead to bid protests and inefficiencies. Precise language and defined scopes reduce misinterpretations and contract disputes.
• Establish Risk-Based Assessment Frameworks: Proactively identifying risks reduces procurement failures. Risk matrices should categorize risks based on severity and likelihood, allowing for effective contingency planning.
• Review GAO Reports on Bid Protests: Understanding past bid protests helps COs mitigate potential challenges and strengthen their solicitation processes.
• Ensure Ethical Conduct and Transparency: Governance structures should enforce integrity and fairness in contractor selection and contract award processes.

Efficiency in Procurement and Supply Chain Security

Supply chain vulnerabilities, cyber threats, and procurement inefficiencies pose significant risks to defense contracting, so it’s essential to verify procurement efficiency and secure supply chains. Additionally, safeguarding sensitive information requires contractors to obtain and maintain the appropriate Cybersecurity Maturity Model Certification (CMMC) throughout the contract lifecycle. The Department of Defense mandates CMMC compliance, and COs are pivotal in validating and leveraging this certification to uphold cybersecurity standards.

Additionally, COs should avoid the practice of "bundling," where multiple contracted requirements are combined into a single procurement. While this approach may seem efficient, especially for understaffed offices, it can inadvertently harm small businesses, restrict competition, and lead to increased workloads. Larger procurements necessitate bigger evaluation teams and more personnel for contract management after the award.

Best Practices:

• Strengthen Supply Chain Due Diligence: Vet suppliers for compliance with security and regulatory standards. Conducting background checks and financial reviews ensures reliability.
• Optimize Procurement Processes: Leveraging advanced contract management tools enhances efficiency. Digital procurement solutions reduce processing times and improve vendor selection accuracy.
• Verify Certification Prior to Award: Before awarding a contract, COs should confirm that the prospective contractor holds a valid CMMC certification at the required level. This verification can be done through the Supplier Performance Risk System or by reviewing certification documentation provided by the contractor.
• Monitor Compliance During Contract Performance: Implement regular assessments to confirm ongoing compliance with CMMC requirements. This can include doing periodic audits, requiring contractors to submit self-assessment reports, or utilizing third-party assessors to conduct evaluations.
• Address Non-Compliance Promptly: Establish clear procedures for addressing instances where a contractor's CMMC certification lapses or is revoked. This may involve corrective action plans, suspension of work, or contract termination if necessary.
• Avoid Bundling When Possible: Assess whether combining requirements is essential. Unnecessary bundling can limit opportunities for small businesses and reduce market competition. By keeping procurements separate, COs can foster a more diverse contractor base and promote innovation.
• Conduct Market Research: Before deciding to bundle, perform thorough market research to understand the capabilities of small businesses. This ensures that bundling does not inadvertently exclude qualified contractors.

Technology and Innovation Integration

Bureaucracy often slows the adoption of emerging technologies in defense contracts. COs must explore innovative procurement mechanisms to integrate new technologies effectively.

Best Practices:

• Use Other Transaction Authority (OTA) for Rapid Procurement: OTAs provide the flexibility to acquire emerging defense technologies quickly.
• Partner with Technology Experts: Engaging subject matter experts ensures the successful integration of cutting-edge solutions.
• Support Small Business Innovation Research and Small Business Technology Transfer Programs: Encouraging small businesses to contribute to defense technology fosters innovation.

Conclusion

Navigating government defense contracts is no easy feat, but by applying the TARGET framework, COs can overcome challenges and drive mission success. Implementing best practices in training, accountability, regulations, governance, efficiency, and technology ensures compliance, enhances performance, and fosters innovation in defense procurement. COs can contribute to a stronger, more effective national defense strategy by staying proactive and leveraging the right tools.

Building strong partnerships with reliable and experienced experts in government contracts is essential for the success of mission-critical projects. Sumaria Systems, a trusted small business, has been a committed industry partner to the US government for over forty years. As a CMMI Level 3, ISO 9001, and ISO 27001-certified contractor with current registrations in SAM.gov, it maintains a clean record and has never been listed as debarred or suspended. By collaborating with the Sumaria team, you increase the likelihood of success and can confidently address complex challenges, leading to significant and impactful results. Together, we can unlock new opportunities and drive meaningful change.