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The Department of Defense (DOD) obligated about $380 billion in fiscal year 2009 to acquire products and services. One approach DOD can take to evaluate offerors' proposals is the best value tradeoff process in which the relative importance of price varies compared to non-cost factors. The National Defense Authorization Act for Fiscal Year 2010 required GAO to review DOD's use of the best value tradeoff process, specifically when non-cost factors were more important than price. In response, GAO determined (1) how often and for what types of contracts DOD used the best value tradeoff process; (2) why and how DOD used such an approach; and (3) challenges, if any, DOD faces in using the best value tradeoff process. GAO identified a probability sample of new, competitively awarded fiscal year 2009 contracts in which DOD obligated $25 million or more. GAO reviewed guidance, solicitations, source selection decisions, and other documents for 129 contracts and interviewed DOD contracting and program staff about the use of the best value tradeoff process.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To help DOD effectively employ the best value tradeoff process, the Secretary of Defense should direct the Director of Defense Procurement and Acquisition Policy to work with the Defense Acquisition University to develop training elements, such as case studies or scenarios that focus on reaching tradeoff decisions, including consideration of price differentials, as it updates the source selection curriculum.
Closed - Implemented
In response to this recommendation, the Director, Defense Procurement and Acquisition Policy assigned the Panel on Contracting Integrity Subcommittee 5, Appropriate Contracting Approaches and Techniques, to develop case studies by the end of 2011 that focus on reaching tradeoff decisions. The panel developed the case studies and the Defense Acquisition University has incorporated them into its contract source selection training courses where appropriate.

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