Acquisition Planning: Opportunities to Build Strong Foundations for Better Services Contracts
Published: 2011-08-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Civilian agencies obligated over $135 billion in fiscal year 2010 for services --80 percent of total civilian spending on contracts. Services acquisitions have suffered from inadequate planning, which can put budget, schedule, and quality at risk. GAO was asked to examine how civilian agencies conduct acquisition planning for services contracts and assessed (1) the extent to which agencies have developed policies and procedures for acquisition planning, (2) how agencies have carried out acquisition planning, and (3) the extent to which agencies' guidance identifies when to begin and how long acquisition planning should take. GAO reviewed acquisition planning at the four civilian agencies with the most spending on professional, administrative, and management support services. GAO also reviewed Federal Acquisition Regulation (FAR) provisions; agency regulations and guidance; and 24 selected contracts; and interviewed agency officials.
section_title: What GAO Found
paragraphs: The Departments of Health and Human Services (HHS) and Homeland Security (DHS), the National Aeronautics and Space Administration (NASA), and the U.S. Agency for International Development (USAID) have established policies that set different requirements and levels of oversight for acquisition planning. Acquisition planning elements--including written acquisition plans, requirements development, cost estimation, and incorporation of lessons learned--are critical to the process. HHS, DHS, and NASA require written acquisition plans that align closely with elements defined in the FAR--USAID does not. All four agencies' guidance include preparing cost estimates and requirements documents during acquisition planning, and DHS and NASA guidance include the consideration of lessons learned from previous contracts in acquisition planning. Agencies' requirements for oversight vary, including who reviews and approves acquisition planning documents. Agencies did not always take full advantage of acquisition planning to develop a strong foundation for the contracts GAO reviewed, but some have identified ways to encourage improved acquisition planning. Key planning steps were not performed, could have been better used to improve acquisition planning, or were not documented for future use. In particular, GAO found that agencies faced challenges defining their needs, documented cost estimates to varying degrees, and documented lessons learned to a limited extent. GAO identified several practices agencies use to support program staff with acquisition planning, including hiring personnel who specialize in procurement business issues and cost and price analysis and providing templates to assist in preparing key documents. Most agency components have established time frames for the last phase of acquisition planning--beginning when the program and contracting offices finalize a request for contract package. None of the agency components, however, have measured and provided guidance on the time frames needed for program offices to develop and obtain approvals of key acquisition planning documents during the pre-solicitation phase--which serves as the foundation for the acquisition process--or to finalize these documents in collaboration with contracting offices during the procurement request phase.
section_title: What GAO Recommends
paragraphs: GAO recommends that USAID establish requirements for written acquisition plans and that each agency enhance guidance for cost estimating and lessons learned; DHS, NASA, and USAID concurred. GAO also recommends that each agency establish time frames for pre-solicitation activities. NASA and USAID generally concurred but DHS did not, noting that existing policy states that planning should begin as soon as a need is identified. GAO clarified its recommendation to emphasize pre-solicitation planning activities. HHS had no comments.

section_title: Letter
paragraphs: In fiscal year 2010, civilian federal agencies obligated over $135 billion for  services—ranging from background investigations to aircraft  maintenance—that accounted for 80 percent of all money obligated by  civilian agencies on contracts. Federal regulations require agencies to  perform acquisition planning activities for all acquisitions to ensure that  the government meets its needs in the most effective, economical, and  timely manner possible. However, our prior work has found that services  acquisitions have been plagued by inadequate acquisition planning— including poorly defined requirements, unrealistic cost estimates, and  prior lessons learned that were not incorporated—which can increase the  risk that the government may receive services that cost more than  anticipated, are delivered late, and are of unacceptable quality.
In light of the government’s spending on services contracts and past  issues with inadequate acquisition planning, you asked us to examine  how civilian agencies are conducting acquisition planning. Accordingly,  we assessed (1) the extent to which agencies have developed policies  and procedures related to acquisition planning, (2) how agencies have  carried out acquisition planning in the areas of requirements  development, cost estimating, and incorporating lessons learned, and  (3) the extent to which agencies’ guidance provides time frames for when  to begin and how long acquisition planning activities should take.
We focused our work on how agencies conduct acquisition planning for  services in general and professional, administrative, and management  support services in particular because civilian agencies had the highest  obligations for these services in fiscal year 2009, the most recent fiscal  year with complete data available when we began our review. We further  focused our work on the four civilian agencies that obligated the most on  professional, administrative, and management support services—the  Departments of Health and Human Services (HHS) and Homeland  Security (DHS), the National Aeronautics and Space Administration  (NASA), and the U.S. Agency for International Development (USAID).  Additionally, to review policies and procedures and select contracts, we  chose components within each agency with the highest obligations on  professional, administrative, and management support services. We  reviewed policies and contracts at:    HHS’s Centers for Disease Control and Prevention and National    DHS’s Customs and Border Protection and Federal Emergency    NASA’s Goddard Space Flight Center and Johnson Space Center;    USAID’s Washington, D.C. Office of Acquisition and Assistance,  including services provided for the Democracy, Conflict, and  Humanitarian Assistance Division as well as agencywide.
To determine the extent to which agencies have developed policies and  procedures related to acquisition planning, we reviewed FAR provisions  in effect in fiscal year 2009 and agency regulations and guidance. We  interviewed officials at each agency such as procurement executives,  policy officials, and competition advocates—as well as officials at the  agency components—to determine the rationales for establishing  acquisition planning policies and procedures. To determine how agencies  have carried out acquisition planning and the extent to which their  guidance provides time frames for acquisition planning, we reviewed 24  contracts—6 from each agency. We selected these based on a range of  dollar values, which corresponded to different requirements for written  acquisition plans and agency review. We focused our contract review on  the following elements: use of written acquisition plans, requirements  development, cost estimating, and incorporating lessons learned— elements we have identified in prior work as important to successful  acquisition outcomes. For each of the selected contracts, we interviewed  contracting and program officials about their participation in the  acquisition planning process to obtain their views on both the challenges  with and effective practices for developing written plans, requirements,  cost estimates, lessons learned, and time frames for acquisition planning  for the selected acquisitions. Our results from the analysis of these  contracts are not generalizable because we did not use a representative,  random sample. For the agencies and contracts we reviewed, our  approach provided greater depth and insight into impediments to effective  acquisition planning and factors contributing to successful acquisition  planning.
A detailed scope and methodology is presented in appendix I. We  conducted our audit work from May 2010 to August 2011 in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives.
subsections: section_title: Background
subsections: section_title: Acquisition Planning Process for Individual Contracts
paragraphs: Acquisition planning activities should integrate the efforts of all personnel  responsible for significant aspects of the acquisition. Generally, program  and contracting officials share responsibility for the majority of acquisition  planning activities. Although there is variation among agency processes,  acquisition planning for individual contracts typically occurs in three  phases (see figure 1):  1.  Pre-solicitation: Acquisition planning activities generally begin when  the program office identifies a need. The program office contacts its  contracting office for guidance on how to develop and prepare key  acquisition documents. The program office is primarily responsible for  conducting market research, defining requirements in a document  such as a statement of work, developing cost estimates, and  developing a written acquisition plan, if required. The program office  also obtains reviews and approvals as necessary from program  leadership for the documents prepared.  2.  Procurement request: The program office submits a formal request  to acquire services, generally known as the request for contract  package which can include a requirements document, a cost  estimate, and an acquisition plan, if required. At this point, contracting  and program officials work together to revise and refine these key  planning documents as necessary, until the request for contract  package is complete. The contracting officer, using the information  submitted by the program office, considers the appropriate contract  type and determines how competition requirements will be met. For  awards that are expected to have limited or no competition,  depending on the proposed cost, the agency or component  competition advocate reviews and approves the key documents.  3.  Solicitation: The contracting officer develops the solicitation, a  document to request bids or proposals from contractors. The agency’s  legal team and other stakeholders identified in agency or component  policies may review the solicitation. Once appropriate reviews have  been completed, the contracting officer publishes the solicitation,  ending the acquisition planning process.
Written acquisition plans, requirements development, cost estimating,  incorporating lessons learned, and allowing sufficient time to conduct  acquisition planning are several important elements of successful  acquisition planning. The FAR directs agency heads to establish  acquisition planning procedures, including those related to the selected  elements described in table 1.
We have previously reported that agencies have faced challenges with  many of these elements of acquisition planning—requirements  development, cost estimating, incorporating lessons learned, and allowing  sufficient time to conduct acquisition planning. Table 2 describes  illustrative findings from some of our prior work in these areas.
In addition, we have sustained bid protests in part because agencies did  not conduct adequate acquisition planning before awarding contracts on a  sole-source basis, as the following examples illustrate:  In 2005, we found that the Air Force initially attempted to place its  requirement under an environmental services contract that, on its  face, did not include within its scope the agency’s bilingual-bicultural  advisor requirement. This obvious error constituted a lack of advance  planning, which compromised the agency’s ability to obtain any  meaningful competition and directly resulted in the sole-source  award.  In 2005, we also found that DHS’s Customs and Border Protection did  not properly justify an $11.5 million sole-source bridge contract and  failed to engage in reasonable advanced acquisition planning by not  taking any steps to seek out other available sources, in spite of  knowing many months in advance about a likely need.
section_title: Agencies Established Different Requirements and Levels of Oversight for Acquisition Planning
paragraphs: HHS, DHS, NASA, and USAID established policies that set different  requirements and levels of oversight for acquisition planning to balance  oversight with time and administrative burden. In particular, HHS, DHS,  and NASA each require written acquisition plans that align closely with  the elements defined in the FAR. USAID requires some documentation of  acquisition planning, but, unlike the other agencies we reviewed, it does  not require written acquisition plans for individual contracts. Guidance at  all four agencies state that cost estimates and requirements documents  should be prepared during acquisition planning, and DHS and NASA  guidance include the consideration of lessons learned from previous  contracts as part of acquisition planning. In addition, agencies have set  different requirements for oversight, including who must review and  approve acquisition planning documents.
subsections: section_title: Most Agencies Have Set Requirements for Written Acquisition Plans
paragraphs: HHS, DHS, and NASA have implemented—in different ways—FAR  requirements related to written acquisition plans. Written acquisition  plans, in general, discuss the acquisition process, identify the milestones  at which decisions should be made, and serve as road maps for  implementing these decisions. Plans must address all the technical,  business, management, and other significant considerations that will  control an acquisition. HHS, DHS, and NASA have set different dollar  thresholds for when written acquisition plans are required and provided  for exceptions to those requirements for certain contracts, such as utility  services available from only one source. Despite the varying levels of  contract award activity and the different dollar thresholds for written  acquisition plans across the three agencies, more than 80 percent of the  dollars awarded on services contracts in fiscal year 2010 were above the  written acquisition plan thresholds. Procurement officials from these  three agencies explained that they established these thresholds to  balance oversight with time and administrative burden. USAID, on the  other hand, has not established: a dollar threshold at which written  acquisition plans for individual contracts are required; guidance on the  contents and format of written acquisition plans; or procedures for review  and approval of written acquisition plans. See table 3 for written  acquisition plan requirements by agency.
For the three agencies that require written acquisition plans, policies and  guidance for the contents of those plans closely aligns with the elements  described in the FAR. For instance, these agencies require written plans  to include an acquisition background and objectives, which details a  statement of need, cost goals, delivery requirements, trade-offs, and  risks. Agencies also require acquisition plans to include a plan of action,  which details prospective sources, source-selection procedures, and  logistics and security considerations.
Program and contracting offices generally share responsibility for  preparation of written acquisition plans. Contracting officials told us they  find written acquisition plans to be valuable roadmaps to help ensure  thorough planning. In two of our selected contracts at DHS and NASA,  written plans were prepared even though they were not required. A DHS  program official told us that he completed a written acquisition plan  because he was inexperienced in working with contracts. He reviewed the  requirements in the FAR and developed a written plan on his own  initiative to ensure he thoroughly completed planning, even though the  contract was valued at $4.5 million—below the $10 million threshold. In  addition, components at NASA and HHS told us they expanded the use of  written acquisition plans beyond agency requirements. For example:    NASA requires written acquisition plans for contracts valued at  $10 million and above, and its component, Johnson Space Center,  requires a short form acquisition plan for contracts valued between  $5 million and $10 million. Procurement officials explained that the  short form improves documentation of acquisition planning and serves  as a training aid for less experienced staff.    HHS requires written acquisition plans for contracts valued at  $500,000 and above, and almost half of Centers for Disease Control  and Prevention’s contract awards over the current simplified  acquisition threshold of $150,000 fell below the HHS threshold of  $500,000 in fiscal year 2010. As of this year, Centers for Disease  Control and Prevention requires written plans for all contracts over  $150,000, unless covered by a regulatory exception. A procurement  official explained that contract team leaders initiated lowering the  threshold, noting that reviewing these actions allows the procurement  office a more comprehensive look at overall acquisition planning, as  well as the ability to better plan for more small business participation,  use existing Centers for Disease Control and Prevention contracts,  and engage departmental strategic sourcing acquisition vehicles.
USAID has not established a dollar threshold or content and format  guidance for written acquisition plans for individual contracts. USAID does  require some documentation of acquisition planning, including documents  used for annual acquisition forecasting and program planning. USAID  requires implementation plans for its programs and foreign assistance  objectives that should describe plans for competition or waivers of  competition and expected completion dates. Implementation plans are  unlike written acquisition plans at the other agencies we reviewed; they  are not required to include statements of need, cost goals, or source- selection procedures, among other things. Implementation plans are not  prepared for individual contracts: rather, they include multiple types of  obligations, including contracts, grants, cooperative agreements, and  government-to-government agreements. USAID Office of Acquisition and  Assistance officials told us these plans are required regardless of dollar  value. However, the policies are not clear about what is required to be  documented in implementation plans, the format of the documentation, or  who is to perform these tasks. In addition, USAID programs develop  activity approval documents that describe funded activities and may  include multiple procurement instruments. USAID policy does not require  contracting officers to use activity approval documents as part of planning  for a specific contract. Lastly, USAID develops milestone plans for  individual contracts using its procurement data system.
None of the six contract files we reviewed at USAID—with award values  between $1.5 million and $750 million—contained a written acquisition  plan. USAID contracting and program officials told us that clearer  guidance about requirements for written acquisition plans would be  useful. For example, a contracting officer involved in a $3.2 million  operational support contract told us it would be very helpful if USAID  would implement more specific acquisition planning formats, similar to  ones he provided to program officials when he worked at another federal  agency. USAID officials said the agency plans to review the benefits of  more consolidated guidance and documentation requirements for  acquisition planning.
section_title: Agencies’ Guidance Call for Requirements Documents and Cost Estimates; DHS and NASA Also Include Incorporating Lessons Learned in Acquisition Planning
paragraphs: The four agencies we reviewed have guidance that requirements  documents and cost estimates be prepared during acquisition planning,  and DHS and NASA guidance include incorporating lessons learned from  previous contracts. Requirements documents are generally part of a  request for contract at all four agencies or their components.  Requirements documents should define requirements clearly and  concisely, identifying specific work to be accomplished. They define the  responsibilities of the government and the contractor and provide  objective measures to monitor the work performed. They can be, for  example, a statement of work, statement of objectives, or performance  work statement.
HHS and DHS generally require cost estimates before solicitation.  NASA requires written acquisition plans to include cost estimates and one  component we reviewed requires cost estimates whether or not a written  acquisition plan is prepared. HHS, DHS, and NASA components we  reviewed have guidance available to help program officials prepare cost  estimates. USAID requires cost estimates for programs. Cost estimates  record the government’s assessment of a contract’s most probable cost  and can be used to make requirements trade-offs in the acquisition  planning process. Following acquisition planning, the cost estimate can  be used to check the reasonableness of potential contractors’ proposals  and negotiate prices.
DHS and NASA guidance include the consideration of lessons learned in  acquisition planning but HHS and USAID have not established specific  procedures or requirements that lessons learned be considered as part of  acquisition planning. NASA encourages incorporation of lessons learned  into directives, standards, and requirements, among other aspects of  acquisitions. In particular, source evaluation boards are encouraged to  document lessons learned, which may include aspects of acquisition  planning, and provide them to procurement office leadership. NASA  guidance further recommends discussions of these lessons learned at  planning meetings for subsequent contracts. After we discussed our  preliminary findings with DHS officials, DHS revised its acquisition  planning guidance in June 2011 to require written acquisition plans to  include a discussion of how lessons learned from previous acquisitions  impact the current acquisition, or provide a rationale if historical  information was not reviewed. HHS and the NASA components we  reviewed require that written acquisition plans include an acquisition  history. These histories may simply describe specific characteristics of  previous related contracts, including contract type, total cost, and  contractor. None of the agencies require that an acquisition history  include knowledge gained from previous contracts or potential issues that  should be addressed in a new contract. In addition, none of the agencies  have procedures in place to assure that the contracting officer reviews the  acquisition history when written plans are not required to be prepared.
section_title: Agencies Have Different Requirements for Reviewing and Approving Acquisition Planning Documents
paragraphs: Agencies’ requirements for who must review and approve acquisition  planning documents vary, particularly for written acquisition plans. For  instance, written plans for contracts above certain dollar thresholds at  DHS and NASA require headquarters-level review, and plans for  contracts below those thresholds are reviewed at the component level. At  HHS, DHS, and NASA, information on estimated costs is reviewed as  part of the review of written acquisition plans. Table 4 describes the  written acquisition plan review requirements at HHS, DHS, and NASA.  Because USAID does not require written acquisition plans for individual  contracts, there are no review and approval requirements.
Agencies have different policies for reviewing requirements documents,  specifically which stakeholders should be involved and whether program  leadership should approve requirements. The agencies’ processes for  stakeholder involvement and reviewing requirements follow:    HHS: The head of the sponsoring program office must conduct a  thorough technical review of the requirements document that is  attached to the written acquisition plan.    DHS: In developing requirements, acquisition planners should consult  with appropriate representatives from contracting, legal, fiscal, small  business, environmental, logistics, privacy, security, and other  functional subject matter experts, as needed.    NASA: Program managers and technical authorities for Engineering,  Safety, and Mission Assurance, and Health and Medical must review  requirements documents.    USAID: The program official responsible for a specific activity drafts  the requirements document as part of the request for contract. USAID  procurement officials explained that requirements documents usually  undergo multiple rounds of editing as the contracting office prepares  the solicitation.
In addition to the review and approval processes of specific acquisition  planning documents, two agencies have processes to review selected  proposed contracts before solicitations are published.    HHS: At National Institutes of Health, a Board of Contract Awards is  to conduct pre-solicitation reviews of a sample of about 10 percent of  each institute’s contracts. According to officials at Centers for Disease  Control and Prevention, the Office of Policy, Oversight, and  Evaluation is to conduct pre-solicitation reviews of all contracts valued  at over $5 million. In addition, HHS procurement officials reported they  are developing an acquisition oversight framework to conduct  headquarters-level review of high-dollar and high-risk contracts at key  decision points in the acquisition life cycle.    USAID: Contracts with estimated values above $10 million are  required to go to a Contract Review Board before solicitation.  However, this requirement is sometimes waived, although there are  no clear criteria for when waivers are granted. One of our selected  contracts at USAID, a multiple award contract valued at up to  $750 million, received a “gold star” pre-solicitation review waiver  based on the contracting officer’s reputation and experience and,  according to officials, because the template used for the solicitation  had been used before. According to documentation in the contract file,  this contract was subject to a bid protest when the published  evaluation criteria were not applied because vendors were confused  by the requirements in the solicitation. While multiple factors affect  when bid protests are filed and whether they are sustained, they are  denied or the agency takes corrective action, several contracting  officials told us they consider successful bid protests an indicator of  inadequate acquisition planning.
section_title: Agencies Missed Opportunities to Build Strong Foundations for Services Contracts
paragraphs: Agencies did not always use the acquisition planning process to the  fullest extent possible to develop a strong foundation for the contracts we  reviewed, but some have identified ways to encourage improved  acquisition planning. We found that important planning steps were not  performed at all, could have been used more fully to improve acquisition  planning, or were not documented for future use. (See appendix V for  detailed information on the 24 cases we reviewed.) In particular, we  found that agencies faced challenges defining their needs, documented  cost estimates to varying degrees, and documented lessons learned to a  limited extent. We identified several practices agencies use to support  program staff with acquisition planning activities, including hiring  personnel who specialize in procurement business issues and cost and  price analysis, and providing detailed templates to assist in preparing key  documents.
subsections: section_title: Challenges Defining Agency Needs
paragraphs: In five of our selected contracts at three agencies, programs faced  challenges defining their needs in the acquisition planning phase, in some  cases resulting in delays in awarding contracts. Four of these contracts  were time-and-materials or cost-reimbursable, which are riskier contract  types for the government. For the fifth contract, NASA incorporated into  acquisition planning known challenges defining its needs, specifically the  possibility of future requirements changes. Well-defined requirements are  critical to ensuring clear communication about what the government  needs from the contractor providing services. Program and contracting  officials at the four agencies we reviewed noted that this can be a  challenging part of acquisition planning and is a shared responsibility  between program and contracting officials. Program officials must ensure  that they have determined exactly what they need to acquire, have  incorporated input from stakeholders, and have made trade-offs to ensure  affordability. Contracting officials must ensure that the stated  requirements are clear and consistent with law and regulation. In four of  our selected contracts, agency requirements were difficult to define and,  in some cases, changed after acquisition planning ended.    For a $13.6 million follow-on contract at DHS, the program manager  responsible for developing requirements during acquisition planning  overestimated the level of advertising services needed to support  recruitment efforts without coordinating with program leadership. The  assistant commissioner of human resources later determined that less  advertising support was really needed and approved approximately  half the requested funding. It took several months for the program to  finalize the support required, resulting in amendments to the  published solicitation after the acquisition planning phase ended, and  delaying contract award by 3 months.    For an $18.7 million contract at USAID, the program official said that it  was challenging to incorporate the needs of multiple stakeholders in  areas outside her area of responsibility, and to forecast their demand  for the services over a 5-year period. Sixteen months after the  contract was awarded, the agency had to increase the contract’s  ceiling by $10 million—an increase of over 50 percent—due to  greater-than-anticipated demand for services.    For a set of follow-on contracts awarded in 2009 valued at  $750 million, USAID had a 10-year history of difficulty predicting  growth in demand for anticorruption program services. Beginning in  1999, three previous sets of contracts for these services reached their  cost ceilings quickly and required new contracts before their planned  expiration.    For a $3.2 million contract at USAID, the contracting officer told us the  program had a difficult time determining program and operational  support requirements because program staff members were turning  over during a change in presidential administration. He noted that  there were a number of unknowns during acquisition planning and it  was not possible to estimate the level of support required, so the  agency awarded a time-and-materials contract. According to the  contracting officer, the agency did not prepare a justification to use  this contract type, as required by the FAR.
In one case, NASA incorporated the possibility of future changes to  requirements into its acquisition planning, although the program decisions  driving these changes would not be made until after planning was  completed. The written acquisition plan for the $180 million contract for  selected contract services related to the International Space Station notes  in its risk assessment that the retirement of the space shuttle created a  challenge to defining requirements specifically enough to use an entirely  firm-fixed-price contract. NASA modified the contract 1 year after award  to incorporate tasks being transferred from other programs, including the  ending space shuttle program, as anticipated.
section_title: Rationales for Cost Estimates Are Not Always Documented to Inform Acquisition Planning
paragraphs: For our selected contracts, agencies frequently did not fully use the cost  estimating process to inform acquisition planning. We have previously  reported that a well-documented cost estimate is supported by detailed  documentation that describes how it was derived, capturing the source of  the data used and the assumptions underlying the estimate. The 24  contract files we reviewed had varying levels of documentation for cost  estimates prepared during acquisition planning. Specifically, 8 of the  contracts fully documented cost estimates and the rationale behind them,  14 of the remaining contracts only partially documented the rationale for  the cost estimates, and 2 contracts did not document cost estimates  prepared during acquisition planning. (See figure 2.)
In acquisition planning, documentation of estimated costs, typically  prepared by the program office, ensures that contracting officials can  understand the basis for the estimate and how to use the estimate in later  steps of the acquisition process. It is unclear what information was  available to USAID contracting officers during acquisition planning in the  two contracts without documented cost estimates. In many cases at all  four agencies, the program office did not document the rationale for  estimated costs—including sources of underlying data and  assumptions—limiting the ability of the contracting office to evaluate the  reliability of estimates and reducing opportunities to improve estimates for  future contracts.
In addition, not fully documenting cost estimates limits information  sharing. While contracting officials told us they have informal  conversations with program officials about the rationales for estimated  costs, if these conversations are not documented, the information cannot  be carried forward to provide insights for any subsequent contract. This is  particularly important given the frequent staff turnover in the acquisition  workforce: In 8 of the 16 cases we reviewed for which a cost estimate  was either not documented at all or not fully documented, either the  program official or contracting official involved in acquisition planning  could not be reached because they had left that office. For instance, DHS  did not document the sources or assumptions for an $11 million public  service campaign follow-on contract. Because the contracting officer  involved in acquisition planning left the agency, DHS could not identify a  contracting official who was familiar with the planning for that contract. As  a result, a future contracting officer or program staff developing the cost  estimate for this recurring need will not have this information.  Documenting the rationale for cost estimates is particularly important to  help ensure the information is available when planning for follow-on  contracts. In 16 of the selected contracts we reviewed for which cost  estimates were not fully documented, 11 were follow-on contracts.
Program officials’ knowledge of how to develop a cost estimate varied.  USAID does not have guidance on when and how to use cost estimates  for individual contracts. For three of the six cases we reviewed at USAID,  the program officials we spoke to had limited knowledge about how and  when to complete cost estimates. As a result, contracting officials were  not in a strong position to use one of the tools available to help make a  determination of fair and reasonable costs or prices, as the following  examples describe.    A USAID program official responsible for acquisition planning for one  contract said that she did not feel knowledgeable enough to prepare a  cost estimate on her own, she did not receive sufficient assistance  from the contracting office, and she was not aware of any guides or  resources to help her complete a cost estimate. Further, the program  official said she communicated with and received inconsistent  guidance from 12 to 15 different contracting personnel during the  course of acquisition planning. This $18.7 million contract was later  modified to increase its total value by more than 50 percent.    Another USAID program official, assigned to plan for a $1.5 million  contract, described her efforts to prepare a cost estimate as “flying  blind” because, at the time, she did not understand how the cost  estimate related to the acquisition process, and she did not know that  the cost estimate needed to be completed within certain time frames.
Contracting officials’ views differed about the importance of developing  accurate cost estimates during acquisition planning. Several contracting  officials at HHS said they did not think cost estimates were as important  during acquisition planning, noting that they rely heavily on market  competition after solicitation to establish a fair and reasonable price.  Although competition can aid in establishing fair and reasonable prices,  the extent of competition varies in contracts. According to a procurement  official at DHS, an accurate cost estimate developed during acquisition  planning—before vendors propose prices—provides a more realistic  basis for assessing whether any of the offers or bids received are within  an acceptable range. Moreover, by delaying attention to cost estimating  until after acquisition planning is completed, agencies may be limited in  their use of estimates for planning purposes other than for establishing  fair and reasonable costs or prices. By rigorously estimating costs during  acquisition planning, agencies may be better positioned to assess  whether they can afford the services proposed and make trade-offs to  better distinguish between needs and wants. For instance, in one case  we reviewed at HHS, a program official told us she used the cost  estimating process to communicate what level of services the program  could afford to purchase given its budget limitations. Because the  program official responsible for planning had a clear understanding of  estimated costs, she was able to work with her office to narrow  requirements to only the highest priority elements.
section_title: Limited Documentation of Lessons Learned from Previous Contracts
paragraphs: Agencies documented lessons learned in a quarter of the contracts we  reviewed. However, in other cases where agencies did not document  lessons learned, they may have missed opportunities to improve  acquisition planning based on previously acquired knowledge and  experience. Contracting officials from several agencies told us that while  they address known major issues encountered in previous contracts,  lessons learned are considered to the extent that time allows. Acquisition  planning is required for all acquisitions, including follow-on acquisitions.  Of our 24 selected contracts, 17 were follow-on awards to previous  contracts for similar services, which could have informed acquisition  planning. Contracting officials explained that follow-on contracts are  frequently “cookie cutters” of the previous contract with very few changes,  as the following examples show.    For a $29 million NASA follow-on contract for facility maintenance and  operation, the program official involved did not consider the  preparation for this contract to be acquisition planning because there  were so few changes from the previous contract.    For a follow-on contract for advertising services to promote  emergency preparedness at DHS, program officials told us that they  did not identify or incorporate lessons learned from the previous  contract during acquisition planning for the current contract.
A written acquisition plan is one opportunity when program and  contracting officials could document important lessons and other  considerations for future use, though this was not required at the  agencies that use written acquisition plans. Of the 12 follow-on  contracts for which written acquisition plans were prepared, 6 of the  written plans from HHS, DHS, and NASA included information about  lessons learned from the previous contracts. For example, the written  acquisition plan for a $375 million disaster response contract at DHS  discussed that a new strategy would be employed in the current contract  because the ordering process used under the previous contract hindered  rapid response in an emergency. For the other six follow-on contracts,  HHS, DHS, and NASA did not document lessons learned in written  acquisition plans. However, program and contracting officials told us that  knowledge gained in the previous contract was incorporated in some of  these cases. For instance:    For a $2.5 million educational marketing follow-on contract at HHS program officials explained that they had experienced issues with  obtaining invoices in a timely manner during the predecessor contra which led them to use an incentive fee arrangement in the current  contract. This issue is not documented in the discussion of the  acquisition history or the selection of cost type in the written  acquisition plan for the contract. ct,    For a $125 million set of follow-on ordering agreements for  background investigations at DHS, a program official said that key  lessons learned included the type of contract vehicle used and  consistency among multiple contractors’ requirements documents.  These issues are not documented in the written acquisition plan.
Due to staff turnover, this type of institutional knowledge is lost if not  documented. In 11 of the 17 follow-on contracts we reviewed, either the  program or contracting official involved in acquisition planning was no  longer available to provide information about the process at the time of  our review. In one case we reviewed at HHS, neither the contracting  official nor program official involved in acquisition planning for the  $210 million contract for management and technical consulting services  were still at the agency. An HHS contracting official told us they  maintained a running list of issues to address in follow-on contracts to  ensure lessons learned are not lost. In addition, because the contract file  contained significant documentation of the early planning process, we  were able to readily understand the decisions they had made and the  lessons they learned.
section_title: Agencies Have Implemented Additional Tools and Resources to Support Acquisition Planning
paragraphs: We identified several practices agencies use to support program staff with  acquisition planning activities, including hiring personnel who specialize in  procurement business issues and cost and price analysis. For instance,  both DHS components we reviewed have hired business specialists who  focus on procurement issues to assist program offices with acquisition  planning tasks, which alleviates the burden on contracting officials. For a  $125 million contract at Customs and Border Protection, program officials  obtained significant assistance from the business specialist group in  developing the cost estimate and requirements document. In this  instance, the cost estimate was well documented, the requirements  document was clear, and the requirements have not changed since the  contract was awarded. Procurement officials at Federal Emergency  Management Agency said awareness of their acquisition business  specialists has been raised by conducting “road shows” within the  contracting organization and individual meetings with key decision  makers on the program side. As a result, these specialists have been  used increasingly in recent months, and some program offices have  provided office space so they can work side-by-side with program staff. In  addition to these business specialists, procurement officials said Federal  Emergency Management Agency has also hired 10 full-time permanent  employees to aid in planning, providing acquisition guidance and  consulting support to program offices. A contracting official told us that  some centers at HHS’s Centers for Disease Control and Prevention have  similar support specialists in their business services units and that this  support helps technically-minded scientists in the program offices with the  procurement process.
In addition, contracting and program officials at Customs and Border  Protection, Johnson Space Center, and National Institutes of Health  noted the value of having in-house cost and budget specialists to aid  program officials in developing cost estimates. For example, a Customs  and Border Protection contracting official noted that program staff for a  $125 million background investigations contract had access to an in- house cost and price analysis group to obtain assistance with developing  a cost estimate. Other advisory offices also assist program staff in  developing acquisition planning documents. For example, NASA’s  Johnson Space Center has a Source Evaluation Board Office, which  officials said plays a support role for the program and contracting offices  during acquisition planning in addition to the subsequent source  evaluation process.
Agencies have tools for program staff to use in developing cost estimates.  The components we reviewed at HHS, DHS, and NASA have established  guides for program staff that made clear when and how to complete a  cost estimate. At HHS and USAID, contracting officials said they shared  informal templates and sample cost estimates among themselves for use  in assisting program officials. Several contracting officials we spoke to  said they had either developed their own cost estimation templates or had  templates they routinely provided to program officials as a clear model.  USAID procurement executives noted that more training in developing  cost estimates would be useful for their program officials.
Contracting officials told us that they provide support when program  officials do not have acquisition planning experience, but the contracting  workforce has limited capacity to assist programs with planning activities  given their workload demands and workforce constraints. At NASA’s  Johnson Space Center, contracting officials are co-located with program  offices to encourage frequent interactions throughout the acquisition  lifecycle. However, contracting officials at all four agencies told us they  have many competing demands, such as planning for higher priority  contracts and awarding and administering contracts. In one case at HHS,  program officials submitted their request for a follow-on contract for  logistics and meeting support services to contracting officials nearly  3 months before the previous contract was to expire, but contracting  officials did not respond due to workload. The contract was awarded  under noncompetitive procedures for $4.1 million and 6 months later than  planned, requiring an extension to the previous contract—which had been  awarded under competitive procedures. In two other cases, one at USAID  and one at DHS, program officials told us they had to substantially rework  certain acquisition planning steps due to turnover in the contracting office.
To incorporate lessons learned more broadly across organizations,  procurement officials at HHS, DHS, and NASA components noted that  they disseminate issues and best practices that arise across their  organizations. For instance, at both HHS components we reviewed,  procurement officials collect and post lists of substantive issues that arise  from their contract review process and bid protest decisions via intranet or  newsletter. According to one contracting official, this mechanism may  help inform contracting officers of typical pitfalls in acquisition planning.  Similarly, at NASA’s Goddard Space Flight Center and Johnson Space  Center, procurement staff members document substantive issues that  arise in the Source Evaluation Board process for use in future and related  contracts. In addition, Federal Emergency Management Agency  procurement officials told us they maintain guides for the most important  hurricane-related contracts to ensure that lessons learned are tracked  and continually applied to help ensure a quick response during a disaster.
Some agency components have also taken steps to encourage early  acquisition planning, including instituting annual consultations about  anticipated contracts and reminder systems about expiring contracts.  Officials at Centers for Disease Control and Prevention described  processes linking the initiation of planning for individual contracts into  annual processes for strategic organizational acquisition planning,  including meetings between programs and contracting officials at the  beginning of each fiscal year. Further, Federal Emergency Management  Agency has recently implemented a policy that reserves the option for the  Chief Financial Officer to set aside an acquisition’s approved funding for  other requirements when programs do not meet deadlines intended to  ensure timely contract award.
section_title: Agencies Have Not Established Time Frames for When Program Offices Should Begin Acquisition Planning
paragraphs: Most agency components have established expected time frames for the  last phase of acquisition planning—beginning when the program and  contracting offices finalize a request for contract package. However, none  of the agency components have measured and described in guidance the  time needed for program offices to develop and obtain approvals of key  acquisition planning documents—including statements of work, cost  estimates, and written acquisition plans, if required—during the pre- solicitation phase, which serves as the foundation for the acquisition  process. Agencies have also not measured the time needed during the  procurement request phase to finalize these documents in collaboration  with contracting offices.
subsections: section_title: Agencies Have Measured and Established Expected Time Frames for the Last Phase of Acquisition Planning
paragraphs: Most agency components in our review have measured and established  guidance about expected time frames for the last phase of the acquisition  planning process—the solicitation phase which starts when the request  for contract package is complete—and the contract award phase. These  expected time frames, known as contracting lead times, consider  variability such as level of competition, estimated contract value, and  commercial availability; serve as typical internal deadlines for contracting  offices; and provide program offices with information about contract  processing times (see table 5).
Contracting lead times established in guidance varied greatly among the  agency components in our review. For instance, contracting lead times in  Federal Emergency Management Agency’s guidance varied from 30 days  for orders under existing agreements and contracts to 210 days for new  non-commercial contracts that have an estimated value of $50 million or  more. Similarly, contracting lead times in Goddard Space Flight Center’s  guidance ranged from 17 days for certain contract actions under $25,000  using simplified procedures to nearly 300 days for competitive contracts  over $50 million. Johnson Space Center has not established contracting  lead times, but officials have established general time frames for steps in  the contract award phase. At Customs and Border Protection, officials  noted that they have measured the time frames needed to establish  contracting lead times and are currently working to implement them in  guidance. According to agency component officials, contracting lead  times were developed in a variety of ways, including compiling historical  data of procurements, experience gained from past procurements,  information gathered through acquisition working groups, and  benchmarking with other agencies.
section_title: Agencies Have Not Defined the Time Frames Needed to Develop Key Acquisition Planning Documents
paragraphs: Agency components in our review have not measured or incorporated  into their guidance the time needed for activities performed in the pre- solicitation phase of acquisition planning—when program officials develop  key acquisition planning documents—or the procurement request phase  when these documents are revised and completed in collaboration with  contracting officials. The time needed for pre-solicitation activities varies  depending on the complexity and dollar value of the contract. The pre- solicitation phase of acquisition planning serves as the foundation of the  acquisition process (see figure 3): It is when program offices establish the  need for a contract; develop key acquisition documents such as the  requirements document, the cost estimate, and, if required, the  acquisition plan; and obtain the necessary review and approvals, before  submitting a request for contract to the contracting office. Based on  discussions with program officials and the contract documents we  reviewed, the average pre-solicitation phase accounted for roughly half of  the total time estimated for acquisition planning activities in our selected  cases. Unlike the other agency components we reviewed, Johnson Space  Center has measured the time needed for pre-solicitation activities as part  of an effort to streamline their acquisition processes, but has yet to  establish these time frames in guidance.
We found that the time needed to complete pre-solicitation activities for  our selected contracts varied widely from less than 1 month to more than  2 years and depended on factors such as complexity of the requirement,  political sensitivity, and funding. This variability is similar to the variability  agencies have measured for the last phases in establishing contracting  lead times, as illustrated in these examples.    For an $18 million HHS contract to obtain information technology  support, developing key acquisition documents and other pre- solicitation activities took about 27 months. Program officials noted  that the pre-solicitation phase was lengthy because the requirements  for this contract were complex and the requirements document had to  be refined several times by agency stakeholders.    For a $125 million DHS agreement to provide background  investigation services, agency officials said that pre-solicitation  activities took about 8 months to complete. According to agency  officials and acquisition planning documents, the contract was  politically sensitive because the contract supported increased hiring of  personnel who require security clearances to meet congressional  mandates. Additionally, given the cost, complexity, and sensitivity of  the contract, program officials were required to obtain additional  review and approvals from their agency’s chief counsel and head of  the procurement activity.    Pre-solicitation activities for a $421,435 HHS contract to provide  biosafety laboratory support took about 1 month to complete. A  program official explained that she received funding late in the fiscal  year and had limited time to conduct pre-solicitation activities. The  program official noted that the requirements for this contract were  complex and she would have wanted at least twice as long to  complete the process.
We have previously reported that contracting officials stated that program  officials were often insufficiently aware of the amount of time needed to  complete acquisition planning, including properly defining requirements,  which may have hindered opportunities to increase competition. For a  DHS contract we reviewed valued at up to $375 million to provide disaster  relief, the program manager noted that he had not known how long  reviews of the written acquisition plan by DHS headquarters would take.  Because the program office did not factor in enough time for this review  process, among other steps, award of the contract was delayed by about  2 months. To avoid a gap in services, DHS awarded a bridge contract  that extended the length of the original contract.
section_title: Conclusions
paragraphs: Sound acquisition planning is important to establishing a strong  foundation for successful outcomes for the billions of dollars civilian  agencies spend annually acquiring services. Key acquisition planning  elements—including written acquisition plans, requirements development,  cost estimating, and incorporating lessons learned—are critical to the  process, as is allowing sufficient time to conduct acquisition planning.  Other than USAID, the agencies we reviewed currently require written  acquisition plans that align closely with the elements described in the  FAR, and agency policy and contracting officials acknowledge the  benefits such plans provide, including helping to clearly define  requirements, understand costs, and carry forward any lessons learned.  Still, agencies did not always take full advantage of the acquisition  planning process to develop a strong foundation for the acquisitions we  reviewed. In particular, cost estimating and incorporating lessons learned  from previous contracts are not always viewed as important elements of  the acquisition planning process. Moreover, agencies varied in how they  documented rationales for cost estimates prepared during acquisition  planning and any lessons learned, which limits the availability of such  information for future use.
In addition, agencies have acknowledged the value of developing  contracting lead times—how long acquisition planning activities leading  up to a complete procurement request take to move from a complete  procurement request to contract award—that recognize the variability of  time required for different types of contracts. However, how long the  acquisition planning activities leading up to a complete procurement  request take is not as well defined. Without a clear understanding of the  time frames needed for the acquisition planning process, program officials  may not know when to start planning or how long the planning will take,  increasing the likelihood of poorly prepared documents and contract  delays. Better insights into when acquisition planning should begin would  help allow sufficient time to carry out the important acquisition planning  activities that are designed to facilitate more successful outcomes.
section_title: Recommendations for Executive Action
paragraphs: To promote improved acquisition planning, we recommend that the  Administrator of USAID direct the Office of Acquisition and Assistance to    establish requirements specifying dollar thresholds for when written  plans should be developed, documented, and approved;    establish standard acquisition plan formats that align with the FAR;    develop templates and guidance to help program officials prepare  reliable cost estimates.
To take fuller advantage of important acquisition planning elements and  to ensure that information is available for future use, we recommend that  the Secretaries of HHS and DHS and the Administrators of NASA and  USAID direct their procurement offices to ensure that agency and  component guidance clearly define the role of cost estimating and  incorporating lessons learned in acquisition planning, as well as specific  requirements for what should be included in documenting these elements  in the contract file.
To allow sufficient time for acquisition planning, we recommend that the  Secretaries of HHS and DHS and the Administrators of NASA and USAID  direct their components’ procurement offices to collect information about  the time frames needed for pre-solicitation acquisition planning activities  to establish time frames for when program officials should begin  acquisition planning.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DHS, HHS, NASA, and USAID. DHS,  NASA, and USAID provided written comments stating that they concurred  with our recommendations to promote improved acquisition planning by  taking fuller advantage of important acquisition planning elements,  including clearly defining the role of cost estimating and incorporating  lessons learned. The agencies’ views differed on our recommendation to  collect information about time frames needed for the acquisition planning  process. The agency comments are discussed below and included in  appendixes VI, VII, and VIII, respectively. HHS had no comments on the  draft of this report. DHS also provided technical comments, which we  incorporated as appropriate.
USAID concurred with our recommendation to promote improved  acquisition planning. USAID noted in its comments that the agency needs  to develop more formal, comprehensive policy and procedures for  acquisition planning by specifying dollar thresholds for written acquisition  plans and establishing standard acquisition plan formats to fully meet  FAR requirements for acquisition planning. USAID also stated that it  plans to develop templates and guidance to help program officials  prepare reliable cost estimates.
DHS, NASA, and USAID all concurred with our recommendation to  ensure that agency and component guidance clearly define the role of  cost estimating and incorporation of lessons learned in acquisition  planning and the associated documentation requirements. USAID did not  indicate specific actions the agency will take to implement this  recommendation. NASA noted that it plans to require acquisition plans to  fully document the rationale for cost estimates. In its comments, DHS  described existing guidance and training related to independent  government cost estimates and stated its intention to review its  regulations and guidance in accordance with our recommendation. In  doing so, it is important that guidance define the role of cost estimates  specifically for acquisition planning purposes, which could include making  affordability and requirements tradeoffs. This role may differ from the  purpose of an independent government cost estimate developed later in  the acquisition process. In addition, DHS, NASA, and USAID agreed that  they should define the role of lessons learned in the acquisition planning  process, as well as establish documentation requirements. In June 2011,  DHS updated its acquisition planning guidance to specifically include the  incorporation of lessons learned in acquisition planning discussions. In its  comments, NASA stated that it intends to require acquisition plans to  include lessons learned from earlier contract actions and steps to mitigate  these issues.
DHS, NASA, and USAID responses to our recommendation to collect  information about the time frames needed for the acquisition planning  process to establish time frames for program officials varied. USAID  concurred with our recommendation but, in its comments, did not  describe specific actions the agency plans to take in response. NASA  partially concurred, but did not agree that the procurement offices should  establish time frames for program officials’ planning, because the time  frames will differ across programs. However, we found that, in 2009,  NASA’s Johnson Space Center procurement office was able to analyze  the time taken for steps of the pre-solicitation phase, recognizing that this  phase historically had the greatest effect on acquisition schedules at the  component. DHS did not concur, commenting that it did not believe it is  necessary or an efficient use of resources to address the  recommendation because existing regulations and policy already state  that acquisition planning should begin as soon as the need is identified.
DHS noted that it recently updated acquisition planning guidance to  emphasize the need to begin acquisition planning early, including paying  close attention to procurement administrative lead times and early  formation of integrated product teams. We found that program officials  need more guidance to have a better understanding of how much time to  allow for completing fundamental acquisition planning steps in a high- quality manner. Agencies’ procurement administrative lead times begin  when a procurement request package has been completed, but agencies  have not measured and established in guidance the time frames for the  acquisition planning activities that lead up to a complete procurement  request package. These early activities include conducting market  research; defining requirements; developing the statement of work, cost  estimate, procurement request, and written acquisition plan, if required;  and obtaining approvals for these documents as necessary. We believe  that component procurement offices are best positioned to aggregate  information about historical planning time frames, particularly given the  variation across contract actions, and provide programs with guidance on  how long aspects of the planning process may take. Agency components  have been successful in capturing variation in contract characteristics  such as type of contract action, level of competition, and estimated value  in the contracting lead times they have set for the last phase of  acquisition planning, and we believe they can accomplish similar analysis  for the variation in the early phases. In response to DHS and NASA  comments, we clarified this recommendation to emphasize the  importance of establishing time frames for pre-solicitation activities.
We are sending copies of this report to interested congressional  committees and the Secretaries of HHS and DHS, and the Administrators  of NASA and USAID. In addition, this report will be available at no charge  on GAO’s Web site at http://www.gao.gov. Should you or your staff have  any questions on the matters covered in this report, please contact me at  (202) 512-4841 or huttonj@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix IX.
section_title: Appendix I: Scope and Methodology
paragraphs: The objectives of this review were to assess (1) the extent to which  agencies have developed policies and procedures related to acquisition  planning; (2) how agencies have carried out acquisition planning in the  areas of requirements definition, cost estimates, and lesson learned in  selected cases; and (3) the extent to which agencies’ guidance provides  time frames for when to begin and how long acquisition planning activities  should take.
We focused our work on:  selected elements of acquisition planning including: written acquisition  plans, requirements development, cost estimating, incorporation of  lessons learned, and guidance for acquisition planning time frames.We chose these elements because they are critical to the successful  planning of a contract.    acquisition planning for professional, administrative, and management  support services contracts because these types of services had the  highest obligations by civilian agencies in fiscal year 2009 as reported  in the government’s procurement database—the Federal Procurement  Data System-Next Generation (FPDS-NG).    four civilian agencies that obligated the most on these types of  services in fiscal year 2009: the Department of Health and Human  Services (HHS), the Department of Homeland Security (DHS),  National Aeronautics and Space Administration (NASA), and the U.S.  Agency for International Development (USAID). We chose to focus on  civilian agencies and exclude the Department of Defense agencies  because GAO had issued a number of reports in recent years that  addressed elements of acquisition planning at the Department of  Defense.
To determine the extent to which agencies have developed policies  related to selected elements of acquisition planning, we reviewed FAR  provisions in effect in fiscal year 2009 pertaining to acquisition planning  and agency regulations and guidance. In particular, we compared the  agencies’ current policies to the FAR, which prescribes responsibilities of  agency heads, or their designees, related to acquisition planning. We  also interviewed agency procurement executives and policy officials,  component-level procurement policy officials, and the competition  advocate at the agency or component levels to determine the agency  rationale for establishing agency policy and procedures and obtain  agency opinion on whether current policy meets acquisition planning  requirements in the FAR.
To determine how agencies have carried out acquisition planning in the  areas of requirements definition, cost estimating, and lessons learned in  selected cases, we reviewed a selection of contracts at each agency and  interviewed cognizant contracting officials, and program officials as  mentioned above. We specifically inquired about effective practices with  regard to the selected elements of acquisition planning. To identify  contracts, we selected two components with the highest obligations on  professional, administrative, and management support services during  fiscal year 2009 from each of the four selected agencies. Our selection  of contracts included 24 contracts, 6 from each agency. The specif agency component locations in our review were as follows:    HHS’s Centers for Disease Control and Prevention and National    DHS’s Customs and Border Protection and Federal Emergency    NASA’s Goddard Space Flight Center and Johnson Space Center;  and    USAID’s Washington D.C. Office of Acquisition and Assistance,  including services provided for the Democracy, Conflict, and  Humanitarian Assistance Division, as well as agencywide.
Within each selected component we selected three contracts awarded by  that component’s contracting office in fiscal year 2008 and fiscal year  2009.Our criteria for contract selection included three tiers based on  dollar value and review thresholds set at the time of award by the  agencies: (1) one contract with a written acquisition plan that required  agency headquarters level review; (2) one contract that required a written  acquisition plan but did not require agency headquarters review; and  (3) one contract that did not meet the threshold for written acquisition plan  but was above the simplified acquisition threshold at the time of this  review of $100,000. We also included a mix of new and follow-on  requirements as well as competed and noncompeted contracts.
The reliability of the FPDS-NG data retrieved for our contract selection  was assessed and validated using source information (contract  identification numbers, contract value, the extent of competition, and the  award date) from the selected contract documents. Our results from the  analysis of these contracts are not generalizable because we did not use  a representative, random sample, though they do illustrate examples of  impediments to effective acquisition planning and factors contributing to  successful acquisition planning. Because of the limited number of  professional, administrative, and management support services contracts  in each of our tiers of selection, we were not able to use random sampling  for selection.
To determine the extent to which agencies’ guidance provides time  frames for when to begin and how long acquisition planning activities  should take, we reviewed policies and procedures on timing at each  agency and its components. To determine the time needed for acquisition  planning for the selected contracts, we interviewed cognizant contracting  officials and program officials, when available, involved when planning  began, reviewed contract files documents for key acquisition planning  milestones, and calculated the time between these dates.
We conducted this performance audit from May 2010 to August 2011 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Pre-solicitation Phase Activities
paragraphs: INSTRUCTIONS: click here to return to figure 1.
section_title: Appendix III: Procurement Request Phase Activities
paragraphs: INSTRUCTIONS: click here to return to figure 1.
section_title: Appendix IV: Solicitation Phase Activities
paragraphs: INSTRUCTIONS: click here to return to figure 1.
section_title: Appendix V: Selected Case Example Contracts
paragraphs: No (none  required)
No (none  required)
Yes (none  required)
No (none  required)
Yes (none  required)
No (none  required)
No (none  required)
No (none  required)
No (none  required)
No (none  required)
No (none  required)  cri whether or not the ction used competitive procedre.
section_title: Appendix VI: Comments from the Department of Homeland Security
section_title: Appendix VII: Comments from the National Aeronautics and Space Administration
section_title: Appendix VIII: Comments from the U.S. Agency for International Development
paragraphs: Appendix VIII: Comments from the U.S.  Agency for International Development  John P. Hutton  Director, Acquisition and Sourcing Management  U.S. Government Accountability Office   Washington, DC  20548 I  am  pleased  to  provide  the  U.S.  Agency  for  International  Development’s    formal  response to the GAO draft report entitled: “Acquisition Planning:  Opportunities to Build Strong  Foundations for Better Services Contracts” (GAO-11-672).
The enclosed USAID comments are provided for incorporation with this letter as an  appendix to the final report.
Thank you for the opportunity to respond to the GAO draft report and for the courtesies  extended by your staff in the conduct of this audit review. “Acquisition Planning:  Opportunities to Build Strong Foundations for Better Services  Contracts” (GAO-11-672)
Recommendation 1:  We recommend that the Administrator of USAID direct the Office of  Acquisition and Assistance to establish requirements specifying dollar thresholds for when  written plans should be developed, documented, and approved.
Management Comments:  USAID concurs with GAO’s recommendation to specify thresholds  and clarify procedures for written acquisition plans.  USAID has historically captured some  elements of acquisition planning in the development of program/project planning and approval  documents, but the different policy sections in the Automated Directive System (ADS) and the  USAID Acquisition Regulation (AIDAR) are not fully adequate to meet Federal Acquisition  Regulations (FAR) requirements for acquisition planning.  We recognize that the Agency would  benefit from more formal, comprehensive policy and procedures that address these FAR  requirements.
Recommendation 2:  We recommend that the Administrator of USAID direct the Office of  Acquisition and Assistance to establish standard acquisition plan formats that align with the  FAR.
Management Comments:  USAID concurs.  USAID is currently in the process of developing a  consistent format that will be utilized in FY2012.
Recommendation 3:  We recommend that the Administrator of USAID direct the Office of  Acquisition and Assistance to develop templates and guidance to help program officials prepare  reliable cost estimates.
Management Comments:  USAID concurs.  USAID includes as part of its training of  Contracting Officer’s Technical Representatives (COTRs) the requirements of undertaking  independent cost estimates.  USAID has established a number of areas for enhancements under  USAID Forward and Implementation and Procurement Reform, and will ensure that enhanced  templates and guidance on cost estimates are undertaken to have a consistent source of  information for program officials.
Recommendation 4:  We recommend that the Administrator of USAID direct the Office of  Acquisition and Assistance to take fuller advantage of important acquisition planning elements  and to ensure that information is available for future use.
Management Comments:  USAID concurs. As a part of Implementation and Procurement  Reform, as mentioned above, and as a result of an internal USAID Business Process Review in  2010, USAID has identified several important elements of acquisition planning on which we  plan to place further emphasis in Agency guidance.  USAID is pursuing implementation of  recommendations in these areas for incorporation in acquisition planning for FY 2012.
Recommendation 5:  We recommend that the Administrator of USAID direct the Office of  Acquisition and Assistance to ensure that agency and component guidance clearly define the role  of cost estimating and the incorporation of lessons learned in acquisition planning, as well as  specific requirements for what should be included in documentation of these elements in the  contract file.
Management Comments:  USAID concurs with GAO’s recommendation to clearly define roles,  incorporate lessons learned, and document acquisition planning elements. USAID views  effective acquisition planning as critical to timely and successful launching of development  assistance programs throughout the world.  Some elements of acquisition planning are part of  USAID’s activity authorization policies, some other elements are contained within different  Agency policy references, and there are remaining aspects that need to be clarified as part of our  policies to reflect all required elements.  USAID will also ensure that its guidance addresses  requirements for file documentation.
Recommendation 6:  We recommend that the Administrator of USAID direct the Office of  Acquisition and Assistance to allow sufficient time for acquisition planning and direct their  components’ procurement offices to collect information about the timeframes needed for the  acquisition planning process—including the pre-solicitation phase—and use the information to  establish timeframes for when program officials should begin acquisition planning.
Management Comments:  USAID concurs with GAO’s recommendation to direct timeframes  needed for acquisition planning, include the pre-solicitation phase, and establish timeframes for  program officials.  As noted above, USAID undertook a Business Process Review in 2010 to  gather specific timeframes experienced in USAID/Washington and field Missions for  competitive acquisition and assistance.  USAID recognizes that effective procurement planning  also includes the pre-solicitation phase.  A key element within Implementation and Procurement  Reform is to enhance competitive processes which include the ability to undertake more robust  competitions within reduced timelines while concurrently ensuring compliance with applicable  regulations.
section_title: Appendix IX: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, the following individuals made  key contributions to this report: Penny Berrier (Assistant Director);  Morgan Delaney Ramaker; Alexandra Dew Silva; Meghan Hardy; Julia  Kennon; Anne McDonough-Hughes; Amy Moran Lowe; Ramzi Nemo;  Kenneth Patton; Guisseli Reyes-Turnell; Roxanna Sun; Ann Marie Udale;  and Alyssa Weir.