# Presentation: 398067

## Department of CommerceInformation Technology Conference April 12-14, 2005Acquisitions for the Department of Commerce

**Greg Crider**
- Office of Acquisition Management
- and Financial Assistance
- “Business Brokers for Program Success”

## Acquisitions for the Department of Commerce 

- What Commerce Buys
- Acquisition Planning and Review
- Contracting Officer Representatives: Acquisition’s Partner
- Standards and Other Recent Items

## What Commerce Buys

- $639 million

- $234 million

- $573 million

- $126 million

- $178 million

- FY04 Obligations
- Total:  $1,750 million

- Source:  Enterprise Acquisition Reporting System (EARS), Federal Procurement Data System NexGen

**Notes:**
Enterprise Acquisition Reporting System, affectionately known as, (EARS) 

IT Equipment & Services - $700 million (40%) of  
Commerce acquisiitions = $1 & 3/4 billion for FY 2004. 

Does not include another $100 million of purchase cards.  
Total annual obligations are approaching $2 billion   

## What Commerce Buys

| Product or Service  | FY 2004 Actions |  FY2004     Obligations | Base + Exercised Options | Base +  All Options | FY 2004 Percent Total |
| --- | --- | --- | --- | --- | --- |
| Other Services | 14,443 | $638,917,573 | $1,415,990,504 | $2,121,461,257 | 36.52% |
| IT Service | 2,372 | $572,680,857 | $2,703,300,233 | $5,744,821,393 | 32.73% |
| Other Supplies | 6,081 | $233,933,512 | $246,960,856 | $356,890,018 | 13.37% |
| IT Equipment | 2786 | $126,143,277 | $135,260,630 | $178,723,211 | 7.21% |
| A&E | 342 | $62,402,686 | $183,672,467 | $419,782,931 | 3.57% |
| R&D Services | 557 | $38,716,159 | $2,947,664,712 | $3,300,589,977 | 2.21% |
| Construction | 249 | $34,648,054 | $431,082,778 | $614,513,400 | 1.98% |
| Real Property | 326 | $21,934,048 | $50,265,707 | $73,530,366 | 1.25% |
| Miscellaneous | 1,642 | $20,185,436 | $10,728,881 | $10,950,188 | 1.15% |
| Total | 28,798 | $1,749,561,601 | $8,124,926,768 | $12,821,262,740 | 100.00% |

- Source: Enterprise Acquisition Reporting System (EARS)
-       Federal Procurement Data System NexGen

**Notes:**
Services account for 70% of acquisitions.

More data being reported in FPDS NextGen.  Now shows Base Contract & Exercised Options, as well as Base & all options (old estimated contract value)  

2nd column from right ( base & all options)  IT Services at $5.7B is nearly half the $12.8B total. 
The trend is up.  Also IT contracts can run 5 -10 yrs, most contracts are just 5 yrs.   
Option data not as reliable as FY04 obligation column (obligations require funds certification, future options don't)  

EARS offers exciting new capabilities for acquisition community to analyze the data.  Use for strategic planning, see trends, etc.      

Able to obtain data myself.  Used to have to ask our systems folks to run a report.         

## The Acquisition Process Phases 

**2. Conduct market analysis.**
**3. Define the technical requirement and $ est.**
**4. Obtain funds certification.**

**1.  Solicit Offers.**
**2.  Evaluate Offers.**
**3.  Award.**

**1. Contract Surveillance.**
**2. Modifications.**
**3. Closeout**

**Customer**

**Procurement Office**

- The Acquisition Process Phases

**Distribution of Effort**

_**Presolicitation  Phase**_

_**Solicitation Phase**_** **

_**Post Award Admin.  Phase**_**  **

**The required level of effort shifts between each phase.   **

**Notes:**
This chart depicts the 3 phases of an acquisition and shared responsibility between the customer and the procurement office

The level of effort shifts between the customer & the CO. 

We tend to focus the solicitation phase when thinking about acquisitions, from the solicitation goes on the street until contract award.     

Much more emphasis is needed on the other two phases which are equally if not more important

Presolicitation phase involves planning, market research, defining the requirement and obtaining the necessary approvals.  Crucial to a successful acquisition.  Taking shortcuts in this phase usually does't save time in the long run.

Post award is where the work gets done to meet the mission need.  Contract admin is where the rubber hits the road,  & it cannot be done without the Contracting Officer Representative performing his/her contract management duties.

## The New Acquisition Model

**The New Acquisition Model**

- Budget/
- Strategic
- Plan

- Requirements
- Definition

- Strategic Sourcing/
- Acquisition Strategy

- Performance
- Management

- Procurement/
- Contract Award

- Where the Acquisition Community is currently engaged

- Acquisition Community engagement under the New Model

**Notes:**
Chart shows where the acquisition community is currently engaged. (i.e, the solicitation phase).  By acquisition community, we mean more than the contracting folks (1102's).  It includes everyone involved in making  the acquisition successful:  customer, program folks, budget, finance, CIO's & IT folks, Small business liaison, General counsel.    In the past, generally many of these folks haven't been involved until just before the RFP is scheduled go on the street.

The new acquisition model represents what we are trying to change with a broader view of acquisition planning.  By integrating budget, IT & acquisition at the Departmental Boards and with yearly budget reviews.  CITRB and Acquisition Review Board.   

All have a role upfront, well before the solicitation phase. 

Mike Sade, Commerce Procurement Executive, will discuss this new aquisition model in more detail tomorrow.

## Department of Commerce Review Boards

- Commerce Information Technology Review Board (CITRB)
- IT systems meriting special attention due to their sensitivity, mission criticality, or risk potential;
- Department-wide IT systems;
- IT systems with life cycle costs over $25 million
- Commerce Acquisition Review Board
- Acquisitions over $10 million
- Interagency Agreements over $5 million                             (both incoming and outgoing funds)

**Notes:**
Now I want to talk about the review and approval process  related to acquisition planning    

Commerce has two Department level Review Boards 
The CITRB focuses on reviewing IT systems/projects.
Diana Hynek in CIO shop coordinates the CITRB schedule of activities.  

The Acquisition Review Board, which I coordinate, reviews all acquisitions over $10 million.   Chaired by Mike Sade,
Members include Directors of Budget, Financial Mgmt, Human Resources, Office of Small & Disadvantaged Bus, Admin Services for real property, Deputy CIO, and Chief, Contract Law.      

Commerce also has a significant number of interagency agreements (i.e,MOU's) where millions dollars are either transferred into our agency to perform work or we pay another agency to perform work for us.   For years, the only review of MOU's has been by OGC primarily for issues relating to legal authority.

Last May, CFO/ASA issued Interim Interagency and Other Special Agreements Handbook.  The Handbook requires agreements over $5 million to be reviewed by the Acquisition Review Board.  We added the Chief, General Law Div. whose office reviews the MOU's to our Board.      

## Documentation for Commerce Review Boards

- Exhibit 300 – Capital Asset Plan and Business Case
- Attachment A, Additional Acquisition Planning Information
- Briefing Presentation
- Resumes
- Program Manager, if applicable
- Contracting Officer
- Contracting Officer’s Representative
- Same documentation for either CITRB or Acquisition Review Board one week prior to Board meeting

**Notes:**
Same documentation required for either Board.

Exception:  if not IT, an Exhibit 300 may not be required.     PM & CO  decide whether to create an Exhibit 300 & Attachment A, or use the acquisition plan format of the Commerce Acquisiiton Manual.  Most prefer the Commerce Acquisition Manual which follows Part 7, acquisition planning, of the FAR            

We do ask for the documentation a week before the Board meeting so Board members can review.   CITRB meets last Weds of the month, ARB - 4th Thursday 

Recently instituted a pre-review of the documents (Exhibit 300) in the eCPIC system well before the Board meeting.   Staff comments (CIO, Budget & OAM) to our bureau counterparts a month before the briefing to make any necessary changes.

## Acquisition Approvals 

- Delegation of Procurement Authority (DPA) for IT
- Varies by Operating Unit or major component
- Acquisitions _<_  $10 million – most operating unit or major component CIO’s
- Acquisitions >$10 million – Commerce CIO
- Acquisition Plan (i.e., Attachment A) signed by:
- Program Official
- Contracting Officer
- Attorney assigned to the acquisition
- Head of Contracting Office
- Bureau Senior Procurement Officer (over $5 million)
- Procurement Executive (over $10 million)

**Notes:**
Brief one Board:  Obtain two specific approvals.
Need both approvals to issue a solicitation  

CIO grants DPA

Proc Exec approves acquisition plan.

First three officials (PM, CO & attorney) should be part of the acquisition team that develops the plan.  

Last three officials (HCO, BPO & Proc Exec) are really the approving officials of the plan.   Commerce has 5 Bureau Senior Procurement Officers:  Mike Palensky (Census), Phylliis Bower (NIST), Helen Hurcombe(NOAA), Page Etzell (PTO) and Mike Anastasio (OS), who used to be at PTO.           

## COR:Acquisition’s Partner

- Contracting Officer’s Representative (COR) is
- a Federal employee that ensures program success by partnering with the Contracting Officer (CO) and Contractors to achieve contract objective.
- delegated limited authority by the CO to monitor and perform  contract management duties related to:
- Management and oversight
- Contractor’s performance and meeting the standards set forth in the contract
- Technical requirements are met by the delivery date at the  price or costs in the contract
- Contract closeout

**Notes:**
The COR really is acquisition's partner.

The acquisition cannot be successful without them.
How many are COR's?  This portion of the briefing should not be news to you.  Run thru it.

COR:  is a Federal employee, just as the Contracting Officer is a Federal employee.  

COR obtains his/her authority from the CO to monitor and perform contract management duties.  

About 200 contracting folks across DOC & not all are CO's.
So few cannot monitor contracts day to day and they don't have the specific technical knowledge that the Program/customers do.  

So COR's are crucial to managing the contract.          

## COR Certification Program:Major Changes

**COR Concept**
**4 Designations**
**POC**
**COTR Level 1**
**COTR Level 2**
**COTR Level 3**
**Competency Based **
**Business/Industry**
**General Management**
**Project Management**
**Procurement Knowledge **
**Training**
**Project Management**
**Procurement Knowledge**
**Performance Plan –COR functions are part of the employee’s plan**

**Notes:**
The COR Certification Program has been a major emphasis of Mike Sade and  Otto Wolff over the past year or more.

Mike will be here tomorrow to discuss the increased emphasis tomorrow

So here's a preview of what I'm sure he will mention

4 Designations of COR's

Point of Contact
Contracting Officer Technical Representative  Levels 1, 2 & 3

COR functions are part of the employee's performance plan

## COR:Levels of Certification

- Point of Contact
- Simplified Acquisitions ($25,000 to $100,000)
- Level 1
- Up to $1 million
- Level 2
- $1million up to $10 million
- Level 3
- $10 million and above

## COR:Performance Plan

- If an individual spends more than 20% of their time working on contracts, the COR element must be included in their performance plan (Level 1 certification).
- All Level 2 and 3 COR must have the COR element in their performance plan.
- DOC policy since December 2002.
- New and current CORs have until December 31, 2005 to meet training requirements

**Notes:**
The fact that COR duties are an element in the employee's performance plan should not be a surprise.  It's been DOC policy for over two years.

What is different though,  the increased emphasis has encouraged increased compliance with the policy.  

## Training Requirements:Project ManagementKnowledge and Performance

**Notes:**
the training requirements are not burdensome

COTR level 1 -    12 hours of training required 
COTR level 2 -    18 hours 
COTR level 3 -    24 hours

POC              -     12 hours As directed by the CO

The course topics covered in the Contracting for COTRs or a Project Mgmt course.

6 hrs = 1 training day

## Training Requirements:ProcurementKnowledge and Performance

**Notes:**
This chart lists other training needs as identified by the CO  
Read courses across the top

Performance based Contracting
Simplified Acquisitions
Contracting for COTRs - required
Task Order or IQIQ contracting
COR refresher
IT Security in Acquisiiton- 1 hr - required

## COR:Nomination/Certification

- Program official nominates an individual to serve as a COR.
- Head of the Contracting Office (HCO) issues a “Certificate of Eligibility.”
- CO appoints an individual as a COR after he/she has completed the appropriate training and has a “Certificate of Eligibility.”
- Procurement Executive (PE) may waive the training requirements in special situations.

**Notes:**
This slide shows the process for nominating and certifying an individual to serve as a COR.  

Program official nominates the individual

HCO issues a "certificate of eligibility"-  a document attesting to the competency of an individual to perform delegated contract management duties
Information will  be maintained in the DOC Acquisition Workforce Database. Starting to populate the database.

CO appoints the individual

## Standards & other Recent Items  

- Internet Protocol Version 6 (IPv6)
- An emerging standard in the Department of Commerce Federated Enterprise Architecture
- A criterion for CITRB approval of all investments
- Directed in the OMB passback for FY06
- Include IPv6 as required component in Operating Unit Standards profile
- Applies to acquisition of new technology and upgrade of existing capabilities
- Specify IPv6 compliance as a technical requirement in the statement of work or statement of objectives for contracts

**Notes:**
I understand that IPv6 was developed in the mid-1990's to replace IPv4, the common standard used today.

The primary objective is increase the address space from 128 bits vs 32 bits and it will simplify mobility

IT acquisition community is encouraged to require IPv6 as a technical requirement when buying new technology and upgrading existing capabilities.

For more information, attend the breakout session on IPv6  scheduled for after the break.

## Standards & other Recent Items   

- Section 508
- Extension of exception for micro-purchases (under $2500) expired April 1, 2005
- All purchases must now comply.  Primary impact on purchase card holders
- http://www.section508.gov
- Earned Value Management System
- Proposed rule will apply Government-wide
- Federal Register April 8, 2005
- Comments due June 7, 2005

**Notes:**
Section 508 requires that Federal agencies' electronic and information technology is accessible to people with disabilities.

The requirement has been in effect for years on all acquisitions above the micropurchase threshold of $2500.   

The exception for micropurchases has finally expired and all purchase must now comply.  The primary impact will be on purchase card holders.  

So this is just a reminder for those who use purchase cards.
For more information, go to section 508.gov website 

Earned Value Managment System

The proposed rule that has been under consideration for some time was published in the FedReg April 8.
Comments are due June 7.

Currently, only DOD, NASA and a few other agencies have developed EVMS clauses and policy.  Consequently, OMB is pushing for this rule to establish standard EVMS provisions, a standard clause and Governmentwide guidelines.   

As a member of the Civilian Agency Acquisition Council (CAAC), Commerce commented on the drafting of the proposed rule last summer.  Basically, we raised concerns about implementing EVMS across the board government 
wide for an agency major systems, when what is major at DOD & NASA would likely not be a major system at smaller agencies like DOC.  

It's out for public comment, so if you like you can comment directly.  Also, our office will coordinate the review from the contracting folks through the Acquisition Council.  Nancy Barrere, in my office is the Commerce rep on the CAAC and  does that routinely.            

I've also spoken to Jerry Harper, the CIO point of contact on EVMS, and he plans to coordinate comments from the CIO folks.  So if you want your comments to be addressed through the CIO office to FAR Secretariat, please send them to Jerry.

## Web Site Addresses

- Commerce Information Technology Review Board (CITRB) http://www.osec.doc.gov/cio/oipr/ITPLANPAGE.HTM
- Acquisition Planning and Review http://oamweb.osec.doc.gov/CAPPS_performanceManagement.html
- Interagency Agreements            http://oamweb.osec.doc.gov/CAS_agreement_mou.html
- Exhibit 300 – Capital Asset Plan and Business Case http://www.osec.doc.gov/cio/oipr/Ex300_instructions.htm
- Attachment A, Additional Acquisition Planning Information http://oamweb.osec.doc.gov/CAPPS_performanceManagement.html
- COR Certification Program http://oamweb.osec.doc.gov/docs/COR_Certification_Program_3-31-04.pdf

**Notes:**
Here's a list of web site addresses for the topics listed.

I also recommend that you go the the OAMFA website and sur around.  It was redesigned this fiscal year and has buttons clikc for each of our four customer communities:  Program, Contracting, Grants and Business/Industry

www:OAMweb.osec.doc.gov

## Points of Contact

- Acquisition Review Board
-  Greg Crider, _[gcrider@doc.gov](mailto:gcrider@doc.gov)_
- CITRB
-  Diana Hynek, dhynek@doc.gov
- COR Policy
-  Curtina Smith, csmith2@doc.gov
-  Virna Evans, vevans@doc.gov
- Earned Value Management System
- Jerry Harper, jharper@doc.gov