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New Director of DoD Pricing on Cutting Costs: Not ‘a War on Contractor Profitability’

New Director of Defense Pricing Shay Assad, Photo: Defense.gov

Defense Department official Shay Assad’s new title gives heft to DoD’s increasing efforts to squeeze $400 billion from its bottom line over the next 12 years.

Earlier this week, DoD announced Assad, who formerly headed the department’s defense procurement and acquisition policy shop, would be given a new title: director of defense pricing.

But, according to a Reuters report, Assad is quick to say the renewed focus on pricing on major weapons systems is not an attack on contractor profits.

“This isn’t a war on contractor profitability,” he told Reuters. “This really is trying to figure out how do we pay less for the goods and services that we buy.”

Earlier, discussing his new position, Assad told reporters, “The reality is we need to step up our game across the board, and so that’s what we’re doing,” including an effort to examine overhead costs. “That’s cost. How do we get that out?”

Assad, who has headed the DPAP since 2006, already has big plans for his new role. He told reporters he would review all sole-source contracts worth more than $1 billion. And Reuters reports DoD’s new pricing director will have some role to play in revamping the Defense Contract Management Agency, which has hired 300 pricing analysts.

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