How the DoD Standardizes Data-Driven Procurement

From acquisition to contract closeout, the Department of Defense (DoD) data strategy involves using data to regulate and optimize the standards, internal controls and systems used during a contract. Almost every DoD contract action now comes under scrutiny through a data lens.

The goal? Minimize variation to simplify the proposal design and development process, especially for the next generation of contract systems.

It’s a tall order. But agencies throughout the DoD are already experiencing success by expediting contracts in a fraction of the timeframes usually required.

Part of the DoD Data Modernization Program 

From a boots-on-the-ground perspective, the DoD is leveraging commercial-sector data innovations like automation, AI and 5G-enabled edge devices to improve military operations and make our troops more lethal in imminent warfare, including space. The overarching effort at all levels of the DoD is called Data Modernization.  

Security is paramount during war, as vast flows of data transmitting among external sources, connected sensors and platforms increase the risk of data espionage at every turn.

A key part of the Data Modernization program is standardized, data-driven procurement.

What is the Procurement Digital Data Strategy for the DoD?  

During a proposal process, data and business rule validation, clause logic and other technical subsystems distribute and secure data flows among contract writing systems and their associated accounting and logistics systems.  

These elements are part of a modular, plug-and-play approach that is a significant component of the standardization process. By the late 2020s, the DoD wants to operate in an environment of templatized IT synergies that can deliver contracted equipment and services faster. As a result, an expeditious contract process is required. Innovative policy, guidance and oversight are already taking hold. The ideal contracting system is predictable output within a flexible, interoperable technology baseline and may eventually involve automated proposal development platforms for contractors.  

All parties must adhere to functional and electronic data exchange standards, using common test criteria and internal controls for validation. Metrics and business intelligence inform the governance of a DoD agency’s systems environment—existing and future.

Contract Procurement Scenarios

Much contracting is now done through an evolving infrastructure—via mobile devices, which have their own data regulation and standardization requirements. Also, government agencies and contracting firms often employ contingent contracting resources—such as contractors and subcontractors, respectively—which may call for more limited network connectivity as part of standardization efforts.

Of course, strategic sourcing goals guide contracting, organized by commodity-specific buying commands. Some agencies require assistance from these commands—referred to as “assisted acquisition”—in the form of funds, standardized data connectivity or both.

Currently, DoD contracting falls into three major buckets, “Operational,” “Major systems,” and “Logistics.” All require integration with legacy, new and component systems, which are also undergoing data standardization.

Operational: This contract writing environment uses the Standard Procurement System (SPS), the motherload of standardization for procurement data involving everyday product, service and construction contracts. These are often short-term contracts.

Major systems: Also supported by the SPS, these contract protocols are typically the most complex and require commercially developed tools to meet the needs of diverse weapon and major-system communities.

Logistics: Workloads are high-volume, simple contract actions for supplies involving systems like eProcurement and legacy Defense Logistics Agency protocols. These scenarios involve a high degree of standardized integration between innovative and requiring systems.

Procurement Data Standard

The Procurement Data Standard is a system-agnostic XML schema that helps standardize contract data. Adopted DoD-wide for creating, processing and sharing procurement actions, the PDS defines minimum requirements for contract writing systems to improve accuracy. 

Under PDS, acquisition systems become interoperable, the procure-to-pay process becomes streamlined, decisions become better informed and future migration to enterprise and federal systems becomes simpler.

PDS also introduces a new format for linking financial data to contract actions, commonly known as “Financial Data in Procurement” or FDIP. This format boosts accuracy in contract reporting and enables links from requirements to executions.

AI Adoption in DoD Procurement Analytics

The DoD’s recent strategic shift toward AI marks a transformative era in procurement data standardization. Its Chief Digital and AI Office spearheads further initiatives to establish common data patterns, fundamentally changing procurement information flow across the defense ecosystem.

By implementing advanced AI capabilities, the DoD breaks down traditional data silos that have historically complicated the procurement process. This modernization effort leverages machine learning (ML) for deeper analytical insights. Procurement officers can access higher-quality data sets, leading to more informed decision-making and streamlined acquisition processes.

The defense community is also witnessing unprecedented collaboration as various agencies align their data practices with the DoD's AI-driven vision. This coordinated effort ensures that procurement data is accessible across different defense platforms, ultimately reducing redundancies and erasing data siloes.

Beyond Procurement: What is VAULTIS and its Principles?  

Essentially, data is now an enterprise resource for the government's defense arm. As technology evolves, the DoD implements open-standard architectures while abiding by existing cybersecurity policies and heeding industry best practices for data protection. The DoD also continues to make its data—including procurement data—more visible, accessible, understandable, linked, trustworthy, interoperable and secure (VAULTIS). Agencies assess their data across lifecycles using the data quality dimensions and the VAULTIS framework outlined in the latest DoD Data Strategy.

To improve the quality of DoD data, the department is developing a decentralized network among data providers and users. This network consists of both process-based and technical components, distributing ownership across data domains and treating data as a product.

Instead of designating a centralized data team responsible for managing all data across the DoD, data domain owners and data product teams are responsible for managing the data products they produce.

Teams design, build and maintain data products with the needs of their users in mind, just like a traditional consumer product. By treating data as a “consumable,” DoD agencies can stimulate a culture of data sharing under appropriate circumstances, enhancing collaboration enterprise-wide.