DOD to emphasize small business, merit pay

As the Defense Department continues its ongoing process of transformation, its personnel can expect their pay structure to change and contractors can count on an increasing emphasis on small business.

Deidre Lee, director of Defense procurement and acquisition policy, outlined her priorities today at a luncheon meeting sponsored by the Fairfax County, Va., Chamber of Commerce.

Small businesses can expect to perform more work on Defense contracts, she said. The department, following the general government trend, intends to press large contractors to hire small firms.

"If you [a large company] promise us to subcontract [to] small businesses, we expect you to live up to it," she said.

She said small companies that graduate from small-business status may find themselves in a difficult position — too large to get small-business benefits, too small to compete head-to-head with major contractors.

"It's almost as if you fell off a cliff," she said. "But I do not have, nor do I count on getting, a midrange set-aside." Companies in that situation should consider partnering with larger firms, she said.

She also said she supports legislation that would award pay increases to DOD personnel based on their performance rather than seniority or an annual schedule.

"We're going to start evaluating for their contributions," she said.

She also touched on "spiral acquisition," the practice of deploying technology as soon as it's useful, rather than waiting until it has been perfected.

"In the past, we would work on something for 20 years," she said. "What we're trying to do is deploy something to the field they can use, recognizing that phase one may not be all they want it to be."