No wonder program offices don't understand

This article looks at the subject of acquisition planning from the program office perspective. The author writes about how program offices perceive acquisition planning and how they tend to have difficulty with contracting officers that demand competition after they have done all that work already:

Let's suppose the program people at a customer agency did a thorough job of analyzing and pricing several different technologies and options over the course of 18 months. Various manufacturers had competed hard during this period to show that their technology was the best value. [Emphasis mine]

Later in the artcle, he says,

When these activities [acquisition planning in accordance with the agency's IT plan] are performed, there is an abundance of meaningful competition during which each manufacturer seeks to prove that it offers the best value. During this sales process, it usually becomes quite apparent which product is best for a particular situation, and everyone knows it. [Again, my emphasis]

What is occurs to me is that the requiring activity does not understand that the "competing"and "sales process" is not part of their job.

The contracting rules were designed to allow fair and open- transparent- transactions between the government and its contractors. These rules have placed responsibility on two groups. The requiring activites- the program offices- and the contracting officers.

The program offices represent the end users of what is being purchased. They are the subject matter experts, the planners and engineers. They are responsible for determining what performance parameters- those key features, specifications, certifications, etc.- that are the minimum requirement to meet the needs of the government.

The contracting community, then, creates the opportunity for vendors across the country to determine if they can meet the government's need in a cost-effective way. They do it in a formal process (controlled by rules and regulations enacted way above their pay grades) that allow a maximum number of vendors to compete in a standardized manner, with transparency to the entire transaction.

This means that the formal acquisition process- and those pesky contracting officers- is where the "competing" and "sales process" takes place on a level playing field, in the full light of the rules and regulations of US Code and the FAR. Working that way, the author and his program colleagues would notice far fewer justifications and approvals needed (J&As).

If the program office does not know what they need and must rely on "competing" vendors to "sell" them on a solution, perhaps they are not doing the job the government is expecting of them.

Am I wrong on this? Comment below.

New bill introduced to fix federal contracting problems

The latest attempt to legislate good contracting practices was recently introduced. Senate bill S-680 has quite a few changes in store for our profession, many of which are outlined in the GovExec article. See the article for such new twists as:

Requiring agencies to publicly announce large sole source contracts shortly after they are awarded

Expand and improve the training of the federal acquisition workforce.

Expand contract award protest rights to allow challenges of large task and delivery awards under multiple award IDIQ contracts.

Have the Office of Management and Budget study the use of interagency contracts

Limit the value of task and delivery orders for services under larger contracts to $100 million.

Include a requirement that prime contractors
subcontract no more than 65 percent of the work on any given contract.

Includes some provisions that resemble recommendations made by the Services Acquisition Reform Act Advisory Committee (see these)

One provision of that bill that would impact our world the most, in my opinion, is the requirement to publish all Justifications and Approvals (J&As) on FEDBIZOPPS and the agency's internal website (such as the Army's Single Face to Industry website).

I am of two minds on this one.

Based on comments from procurement analysts that I know, the quality of J&As may increase exponentially if they were to be published and subject to the same scrutiny of everything else that is published in the contracting world.

Initially, there would be a firestorm of comments and concerns. However, contracting officers would get better at crafting J&As that meet both the federal procurement requirements and the public's requirements. This could be a good thing, long term.

Secondly, though, anything that is published creates an opportunity to be second-guessed by those outside the process and by those trying to influence the process. Soon, there would be a protest procedure for J&As, including some time period for public comments, and there may never be an award made for other than full competition. This would certainly tie the hands (and feet?) of contracting officers simply trying to provide our soldiers, sailors, airmen, marines and other government agencies with what they need to accomplish this monumental task that is running the federal government.

The resulting glacial pace of procurement (if it isn't already)would be due to adding another layer of public hysteria-induced confusion and CYA-induced oversight. I am sure that is not the intent of this proposed legislation.

DFAR keeps up with T&M and Labor Hour changes

This Defense Federal Acquisition Regulation Supplement (DFARS) case is an update to payment options brought on by the the new FAR change (see below) to allow Time and Material (T&M) and Labor Hour contracts for commercial services.

There were three payment options specified in the FAR rule. The Defense Department narrows them to one. Here is how the DFAR case explained it:

DoD believes it is in the best interests of the Department to select, and make mandatory... requiring separate fixed hourly rates that include profit for each category of labor performed by the contractor and each subcontractor, and for each category of labor transferred between divisions, subsidiaries, or affiliates of the contractor under a common control.

That is the way DoD hopes to keep the final outcome of T&M and Labor Hour contracts to be as predictable and controllable (manageable???) as possible.

The DoD head of procurement has a good overview of this change on their DFARS site. There is even a chart comparing before and after use of T&M and labor hour contracts. Just scroll down the page a little to the heading, "Labor Reimbursement on DoD Non-Commercial Time-and-Materials and Labor-Hour Contracts (DFARS Case 2006-D030)."

Rules expand Time and Materials (T&M) plus Labor Hour contracts to commercial services

[This post includes an addition of information regarding T&M and Labor Hour contract D&Fs for contracts over 3 years]
Perhaps you noticed that the FAR got a revision (FAC 2005-15 dated Dec. 12, 2006) to allow T&M and Labor Hour contracts for commercial services. In their deliberations, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council worked to implement the Services Acquisition Report Act of 2003 (SARA). One of the provisions of SARA was to allow using T&M and Labor Hour contracts to purchase services that are commercial in nature.

This new change to the FAR keeps a decided preference for fixed price contacts for services.

Briefly, here is how to use these contract types to buy services (new FAR Part 12.207):

First, the contracting officer needs a determination and finding (D&F) that states a T&M or Labor Hour contract is the only type of contract appropriate for this requirement. Also, for IDIQ contracts, a similar D&F is needed for each task order. [The D&F has some specific requirements that need to be included, so be certain to check them out (FAR 12.207(b)(2)). Also, the D&F authority is HCA for contracts longer than 3 years (FAR 16.601(d)(1)(ii))]

Next, there must be a ceiling price beyond which another determination must be made.

Further:

• The contract must be a competitive award (or small business set aside)
• If using an "other than full and open competition" Justification and Approval (J&A), must have 2 or more offers/proposals or are placing an order under the fair opportunity procedures of a multiple award delivery order contract.

Keep this type of contract arrangement in mind and remember to properly justify its use and make the proper determinations.

Issue sole source J&As before presolicitation notice? GAO says to think about it!

The results of this GAO protest includes an interesting thought. Should a sole-source J&A be approved before the results of a pre-solicitation notice are known? According to the decision,

We think agencies undercut their credibility when they prepare and execute
sole‑source J&As on the basis that there is only one responsible source
available, before the time they have received expressions of interest and
capability from potential offerors.

The writers of the decision admit that it is probably not a violation of procurement law but, doing the J&A first

...may increase the risk that an agency’s market survey, and other bases for its
sole-source decision, will ultimately be shown to be unreasonable.

It makes sense. It would seem less than fair to say there was only one source before using all the tools of market research, including the presolicitation notice.