Gaining Leverage Over Vendor Lock to Improve Acquisition Performance and Cost EfficienciesApril 2014
Topics: Acquisition Management, Government Acquisition, Economic and Cost Analysis
During the acquisition life cycle of a product, technology, or service, the federal government often finds itself dependent upon a single vendor. Once the government enters into this long-term business relationship, it may have little leverage to control costs and manage performance. This research paper first describes vendor lock and its implications. The paper covers recent Department of Defense acquisition guidance and a change to the U.S. Federal Statute relative to intellectual property that could impact how a System Program Office deals with single-source vendors. The paper then explores specific steps that the Government can take now to avoid entering into vendor lock situations, as well as additional steps to mitigate the impact of a vendor-locked environment during contract performance. Finally, we introduce an innovative form of continuous competition that could protect programs from vendor lock by maintaining the pressure of competition throughout the system lifecycle.