To satisfy requirements in the fiscal year 2002 National Defense Authorization Act (U.S. Congress, 2001) to improve the acquisition of services by the Department of Defense, the Air Force established a Program Executive Officer for Combat and Mission Support (AFPEO/CM) who is responsible for management and oversight of a well-defined portfolio of Air Force services acquisition activities. This office is the single point of contact for Air Force services acquisition inquiries and is also responsible for developing long-range plans for cost-effective acquisition of services. To fulfill its responsibilities, the AFPEO/CM needs metrics to help it monitor compliance with statutory requirements, needs to respond to congressional inquiries about specific acquisitions, and needs to effectively manage Air Force services acquisition activities and organizations. RAND Project AIR FORCE was asked to help develop a portfolio of ‘overarching’ measures that will allow the AFPEO/CM to assess the health of Air Force acquisition activities, diagnose problems, and target improvement efforts. This report describes our recommendations. To help develop this portfolio of metrics, we considered the experience of commercial firms, which have long had a ‘strategic’ view of purchasing direct materials (goods) because they are direct inputs to production, but have only recently explored applying such approaches to purchasing services. Through interviews with well-respected chief purchasing officers and other executives involved in service acquisitions, through conference participation, and through a review of the business literature, we found that commercial firms are beginning to manage their service acquisitions in a manner similar to their acquisition of direct materials.
