Navy wants to establish a preferred supplier program

Most major companies have them, and now the Navy wants one too -- a preferred supplier program that would give preference to contractors that have demonstrated superior performance in controlling costs, meeting schedules, providing quality services and products, and reducing energy consumption.

Through a May 24 notice in the Federal Register, the service is seeking industry feedback for establishing a pilot program that would reward qualifying companies with things such as more favorable progress payments, tailored reporting requirements and special award fee pools.

Designation as a preferred supplier would not be a factor in contract awards, but solicitations could contain terms and conditions that would apply to preferred suppliers after a contract is awarded.

"Companies in the private sector that have implemented PSPs have significantly improved performance. Cash flow, profit, and contract terms and conditions that reduce contractor costs and risk are powerful incentives that can be used to motivate contractors to perform at a high level," the notice said.

The Navy currently negotiates business arrangements on a contract-by-contract basis. "As a result of this decentralized and individual approach, [the Navy] loses an extremely important opportunity," the notice said.

Secretary of the Navy Ray Mabus said in a statement he intended to "reward contractors with favorable contract terms and conditions and favorable payment schedules in return for consistent and exemplary contract performance."

At least during the pilot phase, the Navy intends to rate its top 25 contractors using the Contractor Performance Assessment Reporting System to develop a baseline of performance data.

Factors the Navy intends to consider include technical competence, ability to meet schedule, cost control, management responsiveness, oversight of key personnel, and a company's use of small business. In addition, the Navy will assess energy efficiency for all contractors as an excellence factor.

The notice stated, "Energy efficiency is a critical [Navy] requirement significantly impacting the successful achievement of [the service's] missions." It specifically seeks feedback on how the department should evaluate companies' use of energy as relates to the life cycle of its products.

Companies have until July 23 to submit comments.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.