The Defense Federal Acquisition Regulations Supplement (DFARS), requires every Department of Defense (DoD) sole-source contract exceeding a billion dollars go through peer review. Many of these reviews utilize the experts at Naval Supply Systems Command Weapon Systems Support (NAVSUP WSS) Navy Price Fighters (NPF).

The Sole Source Peer Review program provides expert pricing advice, improves the quality of the business deal, and facilitates the sharing of best practices and lessons learned across the DoD. The Assistant Secretary of Defense (Acquisition), Defense Pricing and Contract, Price, Cost, & Finance (OSD DPC PCF) office requests support from Navy Price Fighters to assist with the peer reviews.

“The Director, OSD DPC PCF, requests Navy Price Fighters to be a part of the peer review team at her discretion,” said Nick Cuffe, NAVSUP WSS NPF.

The review process is accomplished in two phases. In the first phase, the NPFs review the procurement and may be asked to help with negotiations.

“During Phase I Peer Reviews, the Peer Review team, which is led by OSD DPC PCF, reviews the pre-negotiation documentation prepared by the buying agency. The review team assesses the implementation of policy, the quality of the contracting processes, and the use of best practices,” said Cuffe. “Specific areas of interest are often the data available and relied upon, application of learning curves, pricing variable quantities, and contracting clauses such as economic price adjustments and performance-based payments.”

One recent review resulted in a cost avoidance of more than $100 million. The case involved pricing variable quantities. According to Cuffe, the buying agency and the contractor developed a range pricing structure accounting for product quantity variation and overall contract quantity, taking advantage of economies of scale to provide lower prices at higher quantities.

“There was an opportunity to apply a curve pricing approach that enabled a more fair outcome by balancing the risks to both parties,” said Cuffe. “The Peer Review team assisted in creating a complex pricing model that developed specific prices at every possible quantity combination and allocated the fixed costs appropriately.”

During the second phase of the process, the Peer Review team reviews the post-negotiation documentation prepared by the buying agency.

“The team specifically assesses how the negotiation team addressed any findings during the Phase I review, negotiated positions compared to the objective positions in Phase I, and any significant changes to terms, clauses, or data obtained,” said Cuffe. “Additionally, the team captures best practices and lessons learned from the buying agency.”

In total, the NPF have assisted DPC through 42 DoD Sole-Source Peer Reviews for procurements over a billion dollars since November 2020, including 22 in FY22. The NPF’s cross-service support included contracts for: the Department of the Navy, including the F-35 Lightning II Joint Program Office; Department of the Army; Department of the Air Force, including the United States Space Force; and the Missile Defense Agency.

For more information on sole-source peer reviews, visit https://www.acq.osd.mil/asda/dpc/pcf/ss-peer-reviews.html.

NAVSUP WSS is one of 11 commands under Commander, NAVSUP. Headquartered in Mechanicsburg, Pennsylvania, NAVSUP employs a diverse, worldwide workforce of more than 22,500 military and civilian personnel. NAVSUP and the Navy Supply Corps conduct and enable supply chain, acquisition, operational logistics and Sailor and family care activities with our mission partners to generate readiness and sustain naval forces worldwide to prevent and decisively win wars. Learn more at www.navsup.navy.mil, www.facebook.com/navsupwss, and https://twitter.com/navsupsyscom.