A senior Defense Department procurement official said this week the Pentagon has little appetite for new contracts involving a lead system integrator approach, but he stopped short of saying department officials will never use the concept again.
The Pentagon is using lead system integrators for a small number of large, complex and expensive programs. Companies designated as lead system integrators have a high degree of influence over program decisions, performing duties traditionally reserved for government employees.
In the future, DOD officials will use the construct sparingly, if at all, said Shay Assad, director of procurement policy in the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics. “We can effectively accomplish the work that we need to get accomplished with the mechanisms we already have,” he said in an Aug. 28 interview with Federal Computer Week.
The military’s most notable example of a lead system integrator-led program is the Future Combat System, in which Boeing and Science Applications International Corp. act as lead system integrators. The program has come under fire from lawmakers for cost overruns and schedule slips.
Assad said the use of lead system integrators raises questions of organizational conflicts of interest both for the lead contractor and the government. “I think this whole issue of what’s inherently governmental and what isn’t gets clouded in that world.”
In a report released in June, the Government Accountability Office alluded to these conflicts of interest. Auditors said the close working relationship between the Army and Boeing in managing FCS makes government oversight for the program difficult. “Depending on the closeness of the working relationship, the government can become increasingly vested in the results of shared decisions and runs the risk of being less able to provide oversight...especially when the government is disadvantaged in terms of workforce and skills,” the auditors wrote.
Assad stopped short of saying the Pentagon will drop its use of lead system integrators altogether. There may be a program that needs to use a lead system integrator concept, "and if that’s the case then we’ll examine it,” he said.
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