WASHINGTON, D.C. — On July 14, the Department of the Air Force announced its top performing industry partners for 2015. This is the second annual ranking released as part of the Defense Department’s Superior Supplier Incentive Program.
SSIP is designed to incentivize contractor performance by identifying suppliers with the highest rankings in terms of cost, schedule, performance, quality and business relations. Its publication is intended to incentivize suppliers to improve performance.
“The feedback the department provides to industry through the Superior Supplier (Incentive) Program is intended to allow our suppliers to benchmark their major business units against other firms,” said Frank Kendall, the under secretary of defense for acquisition, technology and logistics. “It lets the leadership and employees of the best performing firms know that their work is high quality and appreciated, and it helps the firms that have more room to improve know where they need to focus their efforts.”
SSIP uses performance data gathered through the Contractor Performance Assessment Reporting System to rate the 25 largest companies doing business with each of the three services based on contract obligations, and categorizes their business segments into one of three performance tiers, with “Tier I” being the best.
Last year was the first year the SSIP was brought to life as part of Kendall’s Better Buying Power initiative. The Air Force joined the other services in releasing results that validated and, in some cases, surprised industry.
“I (would) say the first year was very successful,” said Bobby Smart, the deputy assistant secretary for Acquisition Integration. “We gained industries’ attention, but we also gained their confidence that we’re trying to create an environment to communicate with them and set up a series of metrics that we could all measure and understand to gauge their performance against their competitors and continually improve.”
SSIP has several objectives in order for it to be successful: improve productivity, publicly acknowledge performance and provide incentives, and continuously improve suppliers’ performance.
Broken into three tiers, 45 business sectors were rated based on a set of metrics established by the Army, Navy and Air Force.
“We got with the Army and Navy and have started to standardize how we are implementing the program so that all the comparisons across the entire Department (of Defense) are the same,” Smart said. “That has been a real, in my mind, important lesson we have learned in the first year, and a lesson that we are trying to apply to make the program better and fairer so (suppliers) understand what it is that we are measuring against.
“I believe, over time, we will have a better assessment of our companies when we start to see trends,” Smart said. “It’s really hard just in the first year to look at how the companies ranked and know if that’s really a true assessment of the contribution they are making. If we look at trends over time, we will have a better view of how our companies are performing.”
Once the foundation is set, Smart said he hopes the program will continue to grow as time goes on, to include other contracts.
“In a time of stable or declining budgets, we have to come up with ways to incentivize our industry partners in a positive way, so they have a priority of maximizing our defense dollars,” Smart said. “In today’s environment, we absolutely have to convey to them that we must maximize the productivity from every defense dollar that we have and our contractors know that, and I think that’s why they have embraced this in such a positive way. It’s a win-win for the companies and for the Department of Defense.”