Benchmarking procurement functions: causes for superior performance

Benchmarking contract management process maturity: a case study of the US Navy

Purpose

– The purpose of this paper is to present the results of contract management process maturity assessments in the US Navy using a process capability maturity model. The maturity model is used to benchmark an organization’s contract management process maturity and to use the assessment results to develop a road map for implementing process improvement as well as knowledge-sharing initiatives.

Design/methodology/approach

– This is survey-based research on benchmarking contract management processes in the US Navy. A web-based assessment tool was deployed to US Navy contracting officers located at aeronautical systems, sea systems, and logistics support contracting agencies. The assessment tool consists of survey items related to the use of contracting best practices. The survey responses are then used to calculate the agency’s contract management process maturity level.

Findings

– The benchmarking results reflected higher maturity levels in the pre-award contracting processes (Procurement Planning, Solicitation Planning, and Source Selection), while lower maturity levels were reflected in the post-award contracting processes (Contract Administration and Contract Closeout). The research findings related to process capability enablers also reflected higher mean scores for the pre-award processes and lower mean scores for the post-award processes. These maturity levels and process capability enabler scores reflect the extent of the implementation of contracting best practices within the Navy contracting agencies.

Research limitations/implications

– This research uses a purposeful sampling approach designed to acquire data on organizational contract management processes. The assessment survey was administered only to qualified Navy contracting officers. The Navy contracting agencies are responsible for procuring billions of dollars in supplies and services in support of the Navy mission. Although the assessed contracting agencies procure different types of systems, supplies, and services, the contract management processes used are common to all Navy, Army, Air Force, and other US federal government agencies. The conclusions based on the analysis of these benchmarking assessments may be applicable to Department of Defense (DoD) and other government agencies.

Practical implications

– The findings suggest that benchmarking can be effective in measuring and improving contracting process capability within the Navy. Benchmarking contracting processes can have far-reaching effects throughout the DoD. The Under Secretary of Defense’s has mandated initiatives related to improving both pre- and post-award contracting processes. The use of these benchmarking assessments can be instrumental in tracking the achievements of these process improvement initiatives. Additionally, the US Congress is leading the push for auditability in procurement operations. By benchmarking and improving its contracting processes, the DoD will be winning the battle toward integrity, accountability, and transparency of its financial operations.

Social implications

– Benchmarking contracting processes can also have far-reaching effects in society. Many governments are focussing on integrity, accountability, and transparency in public procurement. International organizations such as Transparency International (TI) have identified process capability and process integrity as key for reducing the potential for procurement-related fraud, waste, and abuse. Additionally, NATO member countries and partner nations are focussing on the value of assessing and improving procurement processes for strengthening transparency and accountability. The value of benchmarking and improving contracting processes is gaining much attention in global public procurement agencies as they strive for accountability, integrity, and transparency in their governance processes.

Originality/value

– There are multiple reports on deficiencies in DoD’s contract management processes, identifying poor contract planning, and Contract Administration as just some of the critically deficient areas. In response, the DoD is increasing its emphasis on developing its workforce competence through education initiatives. However, very little attention is being paid to benchmarking contract management processes. This research reflects the value of benchmarking DoD’s contract management process maturity and using the results for implementing process improvement initiatives. Using process benchmarking data, agencies can identify process improvement initiatives that will ensure government tax dollars are spent in the most effective and efficient ways.