# Presentation: 806700

## Acquisition Planning Considerations & Delegations of IT Procurement Authority

- David J. Shea, CPCM
- Chief
- Procurement Policy Division
- Office of Procurement and Property Management
- July 12, 2005

## Agenda

- What’s on your mind?
- The Basics – A Refresher
- What is acquisition planning?
- Why should I be concerned about it?
- What should written acquisition plans contain?
- How is market research important?
- Where can I get further information?
- IT Delegations of Contracting Authority
- Closing

## First, a Few Basics...		

- Regarding What makes a Contract:
- Offer (solicitation)
- Acceptance (proposal/award)
- Exchange of Consideration (delivery/payment)
- Legal Purpose
- Competent Parties

## First, a Few Basics...	

- Regarding Risk...
**We talk about technical risk, but is business risk getting lost in the mix?**
**Capital Planning and Investment Control, Project Management, Acquisition Management, Acquisition planning are all about managing risk.**
**Contracts allocate risk between the parties.**
**Know that there is a continuum of business risk related to contract type**
**Cost Type:  More Government Risk/Administration**
**Fixed Price:  Less Government Risk/Administration**
**No type is necessarily superior to the other; depends on specifics of the acquisition**

## First, a Few Basics...

**Regarding communications w/Industry**
**Agencies “must conduct market research appropriate to the circumstances (i) before developing new requirements documents for an acquisition by that agency, (ii) before soliciting for offers....” (FAR 10.001)**
**Its okay to discuss business problems with industry, but do so in a manner that maintains a level playing field and does not reveal sensitive, internal government information **
**Once a solicitation is issued, the Contracting Officer controls all communications w/industry, media, other Government organizations, etc.**
**Do not release source selection information (source selection plans, technical/cost evaluations, contractor proposal information, evaluation reports, proposal rankings, competitive range determinations, etc.)  Be aware of Procurement Integrity requirements in FAR 3.104-1 **

## First, a Few Basics...

- Regarding requirements
- Remember that ambiguities are construed against the drafter (Do detailed Statements of Work make sense?)
- Specifications and standards are the least preferable method of describing requirements

## What Acquisition Planning is Not

***“******We plan to acquire the mission critical $25 million AGRI-MATIC system off the GSA schedule.”***
**There’s nothing wrong with using existing ID/IQ contracts, MACs, GWACs.  But more thought and research needs to go into the acquisition planning than this....**
**GAO critical of Schedule, MAC and GWAC misuse to avoid competition, etc.**
**Involve Contracting Officer/Specialist **_**early**_** in the process!**

## What is Acquisition Planning?

- The process by which the efforts of all personnel responsible for an acquisition are coordinated and integrated through a comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable cost.  It includes developing and overall strategy for managing the acquisition. (FAR 7.101)

## What is Acquisition Planning?

- Agencies shall perform acquisition planning and conduct market research (FAR part 10) for all acquisitions in order to promote and provide for:
- 		- Acquisition of commercial items
- 		- Full & open competition
- Acquisition planning is documented in a written plan.

## What is Acquisition Planning?

**OMB Requirements:**
**Single or several contracts (“useful segments”)?**
**SmartBuy?**
**Contract types(s)/risk mitigation?**
**Performance incentives – Positive & Negative Financial?**
**Performance based statement of work/Objective/Needs Performance Measures? Effective use of competition?**
**Market research results?**
**Award Term?* **
**Apply Earned Value Management (EVM)**
**COTS or custom built?  Combo?**
**Full Funding/Commercial Financing*/Etc.?**
**                                                      *****Not OMB requirements, per se    **

## Why Should I be Concerned About it?

- Helps to increase odds of project success – 90% of cost, schedule performance goal issue
- Required by OMB Form 300 question asking if Senior Procurement Executive reviewed acquisition strategy; new investment unlikely to be approved without it
- Required by FAR
- Required by USDA policy
- We’re doing more mission-related work than ever through contractors

## Where are We in the Process?Approximate CPIC/Contracting Process Cross-Walk

## Content of Written Plans(Not an Exhaustive List)

- Decision milestones
- Acquisition background and objectives
- Statement of objectives
- Applicable conditions
- Cost (life cycle, design-to-cost, should cost, etc.)
- Capability or performance
- Delivery or performance period requirements

## A Word About Performance Based Acquisition

- Are you satisfied with the level of contractor performance?
- Idea is to harness industry creativity to solve our business problems
- We are the experts in describing the need – focus on outcomes, not process
- FAR 37.102 – performance based contracting is the preferred method for acquiring most services
- Attributes:
**outcome-oriented requirements**
** ****performance standards**
** ****quality assurance plan**
** ****positive and negative incentives**

## A Word About Performance Based Acquisition

- Benefits:  Lower cost, higher customer satisfaction, better risk allocation
- OMB September 2002 report GAO-02-1049 noted need for further guidance in use of performance based service contracting
- A Few Examples –
- (Software development, call center, computer maintenance) _[www.arnet.gov](http://www.arnet.gov/)__ (PBSA policy, awards program, 7-Steps, and  Acquisition Center for Excellence (ACE) for Services._
- TSA Information Technology Managed Services solicitation _[www.acquisitionsolutions.net/docs/TSA-RFP.doc](http://www.acquisitionsolutions.net/docs/TSA-RFP.doc)_
- _[www.Knownet.hhs.gov/acquisition/performDR](http://www.knownet.hhs.gov/acquisition/performDR)_
- Also, check out “7 Steps to Performance Based Acquisition; link on USDA Acquisition Toolkit www.usda.gov/procurement/toolkit

## Content of Written Plans	

- Trade-offs
- Risks
- Acquisition Streamlining
- Actions to encourage industry participation (pre-solicitation conferences/advisory multi-step process, draft solicitations, etc.)
- Identification of Potential Sources (Include: small business, women-owned, service-disabled veteran-owned, JWOD, HUBZone, etc.)
- Competition

## Content of Written Plans	

- Identify major systems/components; address component breakout
- Outline source selection procedure
- Address contract issues (approach, lease/buy, etc.)
- Budget & funding
- Product or service descriptions

## Content of Written Plans

- Contractor versus Gov’t performance/Competitive Sourcing (President’s Management Agenda Item;  numerical goals recently have been dropped by OMB)
- Make or buy
- Management information requirements
- Test and evaluation

## Other Acquisition Plan Issues

- Gov’t furnished property and information (GFP/GFI)
- Environmental and energy conservation objectives – Administration & USDA priority – new biobased and procurement preference program in development by USDA
- IT Architecture and Security considerations
- Section 508 – EIT accessibility
- Contract administration
- Milestones
- Bundling issues

## Market Research

- FAR part 10
- Expanded role from past practice
- Before developing new requirements
- Before soliciting offers in excess of the simplified acquisition threshold
- Use to determine if sources available, extent of commercial items available, that meet agency requirements
- Determine the practices of firms producing, distributing, and supporting commercial items, such as:  licensing, financing, etc.

## For More Information....

- FAR parts 7, 10 and 15
- Your servicing contracting office
- Other program managers
- The Internet (589,000 “hits” using search engine – some better than others
- Training Courses
- Contractors – but beware organizational conflicts of interest and release of business sensitive information.

## Delegations of Procurement Authority for Information Technology

- Differ from OCIO “Acquisition Approval” (formerly known as an “IT Moratorium Waiver”)
- Issued by OPPM, not OCIO
- Departmental Regulation (DR) 5039-7 applies
- Thresholds driven by estimated contract value; not life cycle costs
- Blanket vs. acquisition specific delegations

## Delegations of Procurement Authority for Information Technology 

- Most agencies have “base level” blanket authority up to and including $25 million
- Restrictions on acquisition of automated procurement systems
- Formats for increased blanket and specific acquisition authority are provided in the DR

## Questions?

- David Shea – (202) 720-6206 or _[david.shea@usda.gov](mailto:david.shea@usda.gov)_
- Don’t forget to check out the USDA Procurement Home Page @ _[www.usda.gov/procurement](http://www.usda.gov/procurement)__ -- lots of valuable information and links_
- Thanks for your time and attention