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The U.S. Environmental Prote ction Agency

ACQ UI SITION SYS TEM

An Acquisition Guide 

for Executives

U.S. environmen tal p r o t e c t ion agency (e pa )

office of ac qu i s i t ion managemen t ( OAM )

s e pt ember 2010

wa s hing t on, d.c. 20460
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EPA obligates close to $2.0 billion dollars per year to obtain services and 

supplies from the private sector to achieve its mission. The Government 

Accountability Office (GAO) defines obligation as “A definite commitment that creates a legal liability of the government for the payment of 

goods and services ordered or received, or a legal duty on the part of the 

United States that could mature into a legal liability by virtue of actions 

on the part of the other party beyond the control of the United States”. 

Because the Federal Government has a fiduciary responsibility to ensure 

that taxpayer funds are spent prudently, the Federal acquisition system 

established to manage the expenditures of those funds is very different in some respects from commercial buying practices for transactions 

between private parties. This guide provides information to help you 

understand the Agency’s acquisition system, how to use the system effectively, and to avoid ethical and conflict of interest problems.

This guide covers the following subjects: 

1. What is Acquisition? 

2. Purpose and Primary Functions of the Agency’s Acquisition System

3. Key Organizations in Acquisitions

4. Legal Framework

5 Key Players in Acquisitions 

6. Acquisition Process

7. Acquisition Thresholds and Tools

8. Contracts Versus Grants

9. Standards of Conduct

10. Disclosing Acquisition Information 

11. List of Practical Suggestions 

12. Contacts

1. WHAT IS ACQUISITION?

Within the Federal Government, the terms “procurement”, “contracting”, 

and “acquisition” are often used interchangeably. Acquisition is the process used to formalize business relationships between two parties. Federal agencies such as the EPA use this process to formalize their business 

relationships with private industry (both profit and non-profit), other 

Government agencies and educational institutions. The primary purpose 
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of these business relationships is to obtain goods and services needed to 

accomplish the Agency’s mission. 

Government acquisition is acquisition by regulations. As such, the 

Federal Acquisition Regulation, better known as the “FAR”, governs the 

process by which Federal agencies acquire goods and services. Specifically, the FAR:

•	Establishes uniform polices and procedures for acquisition of

supplies and services.

•	Has the force and effect of the law which allows agencies to

implement strategies governing contracting.

•	In addition, agencies have the ability to supplement the FAR to

establish regulatory requirements to address the agency’s unique 

requirements. The EPA’s supplemental guide is the EPA Acquisition Regulations (EPAAR) which has the full effect of the law.

2. PURPOSE AND PRIMARY FUNCTIONS OF THE 

AGENCY’S ACQUISITION SYSTEM

PURPOSE:

The primary purpose of the Office of Acquisition Management (OAM) 

is to provide functional direction and control of all processes and operations governing the EPA’s acquisition programs. This includes:

•	Assuming responsibility and accountability for contract planning,

award, and administration, acquisition policy development and 

maintenance, acquisition workforce development, and management oversight of the acquisition system. 

•	Delivering on a timely basis the best value product or service to

the customers by:

o Maximizing the use of commercial products and services.

o Using contractors who have a track record of successful past 

performance or who demonstrate a current superior ability 

to perform.
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o Promoting competition.

o Awarding contracts that minimize risk for the Government.

•	Maintaining the public’s trust by conducting business with

integrity, fairness, openness, and compliance with statutory and 

regulatory requirements.

•	Fulfilling public policy objectives, such as:

o Protecting the environment through the promotion and purchase of energy efficient and recycled products.

o Promoting opportunities for socio-economically disadvantaged businesses. 

o Using contract types that facilitate performance, excellence, 

and cost savings that minimize risk.

PRIMARY FUNCTIONS OF OAM:

In fulfilling this purpose, OAM performs the following primary functions:

•	Manages all acquisition activities of the Agency.

•	Develops, issues, maintains and interprets acquisition regulations, policies and guidance.

•	Manages acquisition training and certification programs for the

acquisition workforce. 

•	Provides assistance and oversight for all EPA acquisition activities.

•	Manages all acquisition-related information technology systems.

•	Provides operational acquisition services to EPA program and

staff organizations. 

•	Manages the Agency’s Commercial Services Management

Program (formerly Competitive Sourcing Program), to include 

management of the Agency’s annual Federal Activities Inventory 

Reform (FAIR) Act inventory.
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3. KEY ORGANIZATIONS IN ACQUISITIONS

The President establishes Government-wide acquisition policies and 

procedures through such vehicles as Executive Orders.

The Congress plays a vital role in the acquisition process and profoundly 

affects Government contracting as overseers of the Federal purse strings. 

In addition to controlling Federal expenditures, Congress enacts laws that 

directly govern Federal acquisition.

The Office of Federal Procurement Policy (OFPP) located in the Office 

of Management and Budget plays a central role in shaping the policies 

and practices Federal agencies use to acquire the goods and services they 

need to carry out their responsibilities. OFPP was established by Congress in 1974 to provide overall direction for Government-wide acquisition policies, regulations and procedures and to promote economy, 

efficiency, and effectiveness in acquisition processes. OFPP also directs 

the Federal Acquisition Institute in developing and delivering training 

opportunities for the Federal acquisition workforce. OFPP is headed by 

an Administrator who is appointed by the President and confirmed by the 

Senate. The Administrator, along with the heads of the Department of 

Defense, the General Services Administration, and the National Aeronautics and Space Administration, comprise the Federal Acquisition Regulation (FAR) Council, which issues and maintains the Federal Acquisition 

Regulation. The Council is supported by the Civilian Agency Acquisition 

Council, of which the EPA is a member, and the Defense Acquisition 

Regulation Council.

The Government Accountability Office (GAO) an agent of Congress 

is materially involved in the acquisition process. GAO’s influence is far 

reaching because it reports on efficiency and effectiveness of Government 

operations and merits of specific acquisition functions. Among other duties, the GAO hears protests of agency contract actions.

The Small Business Administration (SBA) interprets and implements 

statutory socio-economic requirements related to small and small disadvantaged businesses. 
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The Administrator of EPA delegates contracting authority to the EPA’s 

Chief Acquisition Officer (AA for OARM), who delegates this authority 

to the EPA Senior Procurement Executive (Director of OAM). As the 

Agency’s Senior Acquisition official, the Senior Procurement Executive, 

further delegates acquisition authority and exercises management and 

oversight responsibilities for the acquisition system to the Agency’s contracting officers.

The Office of Inspector General reviews various EPA programs, investigates potential fraud and other criminal activities, and audits the Agency’s 

contracts.

4. LEGAL FRAMEWORK

In 1831 (U.S. vs. Tingey), the Supreme Court declared that the Federal 

Government, based on sovereignty, has inherent power to contract. 

However, the Government’s broad constitutional authority to contract

is limited by statutes, common law, and administrative law. Numerous 

statutes govern Federal acquisitions. Among the basic statutes:

•	The Federal Property and Administrative Services Act (41 U.S.C.

251 et seq.).

•	The Small Business Act (15 U.S.C. 631 et seq.).

•	The Office of Federal Procurement Policy Act (41 U.S.C. 401 et

seq.).

•	Competition in Contracting Act of 1984. (P.L. 98-369)

•	Federal Acquisition Streamlining Act of 1994 (P.L. 103-355).

•	Federal Acquisition Reform Act of 1996 (P.L. 104-106).

•	Information Technology Management Reform Act of 1996 (P.L.

104-106).

•	Contracts Disputes Act (41 U.S.C 601).

•	Procurement Integrity Act (41 U.S.C 423).
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Administrative law includes:

•	Executive Orders.

•	Decisions of Boards of Contract Appeals, the Comptroller General, and other administrative bodies.

•	The Federal Acquisition Regulation (FAR) (48 CFR Ch. 1) is a

single, uniform regulation that applies to most executive agencies, including EPA.

•	EPA Acquisition Regulation (EPAAR) (48 CFR) establishes

Chapter 15, within the Federal Acquisition Regulations System.

5. KEY PLAYERS IN ACQUISITIONS

CONTRACTING OFFICERS are the Government’s contracting agents 

for acquiring goods and services. Contracting officers are authorized to 

execute, administer, modify, or terminate a contract. Contracting officers 

may bind the Government only to the extent of the authority delegated to 

them in writing. 

A contract is a legally enforceable agreement between two or more competent parties, is mutually binding, and obligates one party to furnish 

something of value and the other party to provide consideration.

In contracts with the private sector:

•	The Government is one party,

•	The contracting officer is the Government’s agent, and

•	The contractor is the other party.

Contracting officers are responsible for ensuring that:

•	The Government obtains value from contracts.

•	All requirements of law and regulation are met prior to executing

an action.

•	Sufficient funds are available for obligation.

•	Contractors receive impartial, fair, and equitable treatment.
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•	Both parties comply with terms of the contract.

•	The interests of the United States are safeguarded.

•	Independence is maintained. Contracting officers often request

advice from specialists in audit, law, engineering, and other 

fields. However, the contracting officer is solely responsible for

determining the appropriate contract type, the final pricing of a 

contract, and other decisions related to a contract. The recommendations and counsel of contributing subject matter experts 

are advisory.

Contracting officers receive advice and assistance from the following officials:

Contract specialists may serve as contracting officers or support them. 

Contract specialists are trained in acquisition and in related business 

skills such as market research, source selection, cost and price analysis, 

negotiation, and contract administration.

Program managers are tasked with planning and controlling assigned 

programs/projects to achieve mandated goals. They identify the deliverables required for their missions and perform functions related to acquiring those deliverables such as:

•	Identifying and defining requirements for goods or services.

•	Preparing acquisition plans, purchase requests, and performance

work statements.

•	Recommending evaluation criteria and evaluating proposals

from offerors (private sector firms competing for the award).

•	Overseeing technical progress.

•	Inspecting and accepting contract deliverables.

Contracting Officer Technical Representatives are generally representatives of program/staff offices that originate the requirements for goods or 

services. Contracting officer technical representatives are designated by 

contracting officers to perform contract administration activities 

regarding technical issues. They are delegated limited authority for such 
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responsibilities as monitoring contractor progress and alerting contracting officers to problems, recommending contract changes, and inspecting 

and accepting deliverables.

Attorneys review proposed solicitations, awards and other acquisitions 

and contract related documents for legal sufficiency, representing the 

Agency in protests and disputes, and interpret acquisition law. 

Competition Advocates are responsible for identifying and removing 

barriers to competition. For this purpose, they review documents such as 

draft acquisition plans, performance work statements, and justifications 

for other than full and open competition, protests, etc.

Office of Small Business Programs (OSBP), formerly known as the 

Office of Small and Disadvantaged Business Utilization, ensures that 

applicable Agency personnel thoroughly consider opportunities to setaside awards to small, small disadvantaged, HUB-Zone, service disabled

veteran owned, and women-owned businesses. The office also provides 

assistance and counseling to business firms.

Auditors and Accountants perform such functions as: 

•	Auditing cost and pricing data provided by an offeror and recommending positions on proposed elements of cost.

•	Investigating the financial responsibility of offerors.

•	Auditing contractor invoices.

•	Reviewing contractor accounting and cost estimating systems.

6. ACQUISITION PROCESS

The acquisition process for contracts is typically divided into four phases:

Presolicitation, solicitation and evaluation, award, and contract administration.

Acquisition by necessity requires collaboration among the contracting 

and other program/project managers, legal counsel, finance, budget, and 
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other experts as required. The presolicitation phase lays the groundwork 

for soliciting offers and awarding a contract.

In the presolicitation phase, the following tasks are generally performed:

•	Identifying the requirement for products or services.

•	Preparing a performance work statement.

•	Committing sufficient funds to acquire the deliverable.

•	Preparing purchase requests.

•	Researching the market for the supplies/services.

•	Determining the extent of competition for award (e.g., full and

open and small business set-aside).

•	Establishing technical, price-related, past performance, and other

evaluation criteria for competitive acquisitions.

In the solicitation and evaluation phase, the following tasks are generally 

performed:

•	Determining the method of acquisition (e.g., invitation for bid or

negotiation) and type of contract (e.g., fixed price or cost reimbursement) and appropriateness of various incentives to motivate 

the contractor’s performance.

•	Drafting the solicitation.

•	Publicizing the proposed acquisition.

•	Answering inquiries from potential offerors and conducting prebid or pre-proposal conferences.

•	Evaluating bids or proposals based on the evaluation plan for the

acquisition and the criteria in the solicitation.

•	Setting the competitive range and discussing proposals with offerors, as necessary.

•	Determining the responsibility of the potential awardee.

•	Responding to pre-award protests by offerors.
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In the award phase, the following tasks are generally performed:

•	Awarding the contract.

•	Conducting debriefings with successful and unsuccessfully offerors.

•	Responding to protests of the award by unsuccessful offerors.

In the contract administration phase, the following tasks are generally 

performed:

•	Conducting orientation of Federal personnel who will be responsible for contract administration (e.g., Contracting Officers 

Technical Representatives).

•	Conducting contractor orientation.

•	Monitoring compliance by both contractor and Government

personnel with the terms and conditions of the contract.

•	Inspecting and accepting contract deliverables.

•	Addressing contract performance issues, including determining whether to stop work, extending delivery dates for excusable 

delays, or applying formal contractual remedies (e.g., rejecting 

contract deliverables, termination).

•	Determining the timing and amount of payments to contractors

based on the contract terms.

•	Modifying contracts as necessary.

•	Resolving contractor claims.

•	Closing out the contract.

7. ACQUISITION THRESHOLDS AND TOOLS

These are some of EPA’s more commonly used acquisition thresholds and 

tools:

Purchase Cards - OAM delegates the authority to buy products and 

services through purchase cards to program managers and others. This 

authority is generally limited to the micro-purchase threshold for a single 

transaction.
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Micro-purchases - Purchases below the current threshold of $3,000 

($2,000 for construction) may be awarded without soliciting competitive 

quotations if it is determined that the price is reasonable.

Simplified Acquisitions - Purchases greater than $3,000 but less than 

$150,000 (effective October 1, 2010) may be made under simplified procedures with reduced contract clause requirements.

Acquisitions greater than the simplified threshold - For acquisitions 

above the simplified acquisition threshold, contracting officers use one of 

three methods:

•	Invitations for Bid require the submission of sealed bids, publicly

opened, with award to the low, responsive, responsible bidder.

•	Competitive Negotiation provides for publicizing and issuing a

request for proposals, discussing proposals with offerors in the 

competitive range (i.e., those with a reasonable chance of award, if 

applicable), and awarding based on the evaluation criteria in the 

solicitation.

•	Noncompetitive Negotiation is permitted only when it meets

statutory exceptions to competition, such as urgency or lack of any 

other responsible source.

•	Most of EPA’s contracts are negotiated.

Use of Other Agency Contracts - GSA schedules which are also referred 

to as Multiple Award Schedules (MAS and Federal Supply Schedules (FSS), 

Government Wide Acquisition Contracts (GWACS) that help agencies 

meet their technology requirements and Interagency Agreements pursuant 

to the Economy Act.

8. CONTRACTS VERSUS GRANTS

There are distinct differences between a contract and grant. 

Contract - A contract is a legally enforceable agreement between two or 

more competent parties, is mutually binding, and obligates one party to 

furnish something of value and the other party to provide consideration. 

Contracts benefit the government.
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Grant - A statutory award of financial assistance in the form of money or 

other things of value (e.g., a contractor’s services as in kind assistance) 

by the Federal Government to an eligible recipient. The term does not 

include technical assistance provided by Federal employees or contractors 

or other assistance in the form of revenue sharing, loans, loan guarantees, interest subsidies, or insurance. Unlike cooperative agreements, the 

Federal Government is not “substantially involved” in the assisted project 

under a grant. Neither grants nor cooperative agreements may be used 

to obtain services or products for the direct use or benefit of the Federal 

Government.

9. STANDARDS OF CONDUCT

Standards of conduct are the rules which apply to Government employees 

and individuals dealing with the Government. In addition to the applicable procurement and acquisition rules, Federal employees are bound by 

the Standards of Ethical Conduct, 5 (CFR part 2635), and the conflicts of 

interest statues in Title 18. Government business must be conducted with 

complete impartiality, and except as authorized by statute or regulation, 

preferential treatment provided to none. This includes:

•	Avoiding any conflict of interest or appearance of conflict or lack

of impartiality.

•	Avoiding making Government decisions outside official procedures or without authority.

•	Conducting actions as though full public disclosure is expected.

Prohibited conduct for all personnel involved in the acquisition process:

•	Disclosing contractor bid or proposal information or source

selection information to unauthorized sources.

•	Taking bribes or soliciting or accepting certain gratuities.

•	Discussing future employment or business opportunities with a

bidder or offeror without promptly reporting the contact in writing and executing a recusal.

•	Using an official position or non-public information to advance

private or personal interests.
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•	Participating in any particular matter in which the employee;

spouse; minor children; general partner; or organization in which

the employee serves as an officer, director, trustee, general partner, or employee has a financial interest. This includes specific 

party matters as well as matters of general applicability, such as a 

bid proposal.

•	Conspiring to defraud the Government.

•	Making false statements.

•	Contracting with Government employees or members of

Congress.

•	Contracting on a sole source basis with a former Agency employee within one year after his or her departure, unless a waiver has 

been granted.

•	Seeking or engaging in outside employment or activities with a

contractor or other person whose financial interests may be affected by or conflict with the performance of one’s official duties.

•	Engaging in certain post-employment representations to the

Government on the same specific party matter, and under certain 

circumstances for certain people (as described in the Procurement Integrity Act), receiving compensation from a contractor as 

an employee, officer, director, or consultant of the contractor.

10. DISCLOSING ACQUISITION INFORMATION

Contractor bid or proposal information or source selection information 

may not be obtained or disclosed before or after contract award, except 

as authorized by law. “Source selection information” means any of the 

following information that is prepared for use by an agency for the purpose of evaluating a bid or proposal to enter into an agency procurement 

contract, if that information has not been previously made available to the 

public or disclosed publicly: Such information includes:

•	Bid prices submitted in response to an agency.

•	Invitation for bids, or lists of those bid prices before bid opening.

•	Proposed costs or prices submitted in response to an agency

solicitation, or lists of those proposed costs or prices.
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•	Source selection plans.

•	Technical evaluation plans.

•	Technical evaluations of proposals.

•	Cost or price evaluations of proposals.

•	Competitive range determinations that identify proposals that

have a reasonable chance of being selected for award of a contract.

•	Rankings of bids, proposals, or competitors.

•	Reports and evaluations of source selection panels, boards, or

advisory councils.

•	Generally any other information marked as “Source Selection.”

•	Sanctions: Employees who engage in prohibited conduct may be

subject to administrative sanctions, civil penalties, or criminal 

penalties such as fines, and/or incarceration. In addition, such 

conduct may result in the cancellation of the procurement or 

rescission of a contract, causing delays and interrupted procurements for goods and services.

11. LIST OF PRACTICAL SUGGESTIONS

•	 Be an active advocate for complying with statutory or regulatory

requirements; particularly the requirements for competition. 

(“Advance source selection”, “this company is the best to do the 

work; they know what we want”) or urgency (“I need it right

away and I know a company who can give me what I want now”, 

are not statutory).

•	Do not provide advance information not generally made available to the public to companies or individuals regarding planned 

acquisitions that would, in fact or appearance, provide an unfair 

competitive advantage. This includes not discussing acquisitionrelated business outside the office. There are criminal and civil 

penalties for release of unauthorized information.

•	Ensure that appropriated funds are available to pay for an

acquisition.
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•	Support the mandatory acquisition of products and services from

non-profit agencies employing people who are blind or severely 

disabled under the Javits-Wagner-O’Day Act.

•	Request that the appropriate contracting officer make commitments

to contractors, companies, or individuals or orders/requests for 

them to perform work. Do not sign (execute) contractual instruments or modifications, whether or not dollars are involved, or 

memoranda or letters that appear to have the effect of contractually binding the Government. An agency employee without actual 

authority who makes an unauthorized commitment may be subject 

to personal liability.

•	Consult immediately with your Deputy Ethics Official and the

contracting officer if you are provided information regarding or 

asked to be involved in any acquisition activities for which you or 

your family members have financial interests or other holdings in a 

contractor, subcontractor, or potential offeror or bidder.

•	As soon as an acquisition need is identified, contact the contracting

officer to obtain advice and initiate early planning strategies. This 

is particularly important for acquisitions with urgent time requirements. Early planning can also significantly shorten acquisition 

lead times for complex, large acquisitions.

•	Be knowledgeable of the procurement integrity requirements and

other ethical considerations before discussing any acquisition with a 

member of the public.

•	Use care in working with support contractors including administrative/clerical support, to avoid the appearance of an employer/employee relationship. Do not direct contractors to perform any tasks. 

The contractors are not EPA employees. Federal employees are not 

authorized to direct or influence contractor staffing decisions.

•	Start and end every meeting with contractor representatives to

make it clear that you do not have authority to make contracting 

decisions.

•	Ensure contractor space is clearly marked and contractor personnel

wear contractor badges.

•	Do not use contractors for inherently governmental functions.

“Inherently governmental function” means, as a matter of policy, a 
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function that is so intimately related to the public interest as to 

mandate performance by Government employees. An inherently 

governmental function includes activities that require either the 

exercise of discretion in applying Government authority, or the 

making of value judgments in making decisions for the Government. Governmental functions normally fall into two categories: 

the act of governing, i.e., the discretionary exercise of Government authority, and monetary transactions and entitlements. 

•	Do not allow contractors to participate as members of internal

Agency Committees.

•	Do not suggest promotion, bonus, hiring, or firing of contractor

personnel.

•	Do not allow contractors to make Agency or policy decisions.

•	Support the small and small disadvantaged business programs.

•	Make contractor source selections or influence source selections

(e.g., as an evaluator or advisor) only if you have been delegated 

authority to do so in writing.

•	Do not accept any gift from contractors or potential contractors

that is worth more than $20. Also, don’t accept gifts worth more 

than $50 in a year from that same source.

•	If you have a meal with a contractor, we strongly encourage you

to pay for your own meal and recognize the appearance issues.

•	Discuss with the appropriate contracting officer before asking for

or encouraging, orally or in writing, the submission of unsolicited 

proposals.

•	You can provide letters of recommendation that refer to your

official title and position for people you know from your Federal 

service (which could include contractors or subordinates) or 

for people who are applying for Federal positions. OGC/Ethics 

prefers that employees not use Agency letterhead for personal 

recommendations. Remember that you can’t evaluate the performance of contractors outside of the established process and can’t 

recommend contractors for any promotions or bonuses. 
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12. CONTACTS

For additional information on how to purchase supplies or services or

find specific points of contact for questions, please visit the OAM

intranet website at: http://oamintra.epa.gov/ and OAM internet website

at http://www.epa.gov/oam/

 
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NOTES
1