THE ACQUISITION PROCESS

In this book the basic framework, or model, for obtaining supplies and services by the federal government will be referred to as the acquisition process. Acquisition must not be thought of as a function but rather as a process that links customer needs to customer satisfaction. This process should be viewed as a series of steps and activities for converting specific inputs into specific outputs. It includes determination of requirements, acquisition planning, preparation of the solicitation, source selection, negotiation, and contract award, performance, and closeout. The first step in managing the acquisition process is to identify the stakeholders. Stakeholders in an acquisition include the ultimate user, program managers, contracting officers, functional managers, engineers, manufacturers, marketing personnel, suppliers, stockholders, subcontractors, vendors, financial institutions, and taxpayers. Success in managing the stakeholder relationship can be measured using these critical success factors:

• Client acceptance

• Client consultation

• Top management support

• Acquisition plans and schedules

• Monitoring of feedback

• Communication

• Troubleshooting.

The term acquisition is defined in the FAR at 2.101 as “acquiring by contract with appropriated funds of supplies or services (including construction) by or for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. The acquisition process begins at the point when the agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contract, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.” In this book the process of fulfilling an agency’s needs will be referred to as the acquisition process. DoD directives in the Defense Acquisition System, the 5000 series, also refer to the new acquisition process. In the DoD context, the acquisition process has traditionally been an acquisition management process structured in logical phases by major decision points called milestones, beginning with broadly stated mission needs that cannot be satisfied by nonmaterial solutions.

The federal acquisition process consists of a network of tasks and activities associated with a sequence of discrete events designed to produce the timely delivery of the needed product to the customer. Figure 2-1 depicts this process, illustrating major events associated with the procurement of goods and services.

The requirements determination phase: All requirements begin with a determination of need. Government needs fall into one of four general categories: (1) a need to establish a new operational capability, (2) a need to improve an existing capability, (3) a need to exploit an opportunity to reduce cost or enhance performance, and (4) a need to preserve a current capability through maintaining or replenishing inventory. Included in this phase are requirements forecasting, market research, development of initial acquisition strategy (external or internal source), and quantification of the funding requirement.

Figure 2-1 The Acquisition Process Model

Acquisition planning: During this phase the acquisition cadre is formed, the user initiates the purchase request, market characteristics and industry practices are determined, and perceived needs are developed into more detailed statements of requirements. Specifications and statements of work, identification of sources, designation of the method of procurement, refinement of the procurement strategy, definition of evaluation criteria, and completion of procurement plans are examples of requirement documents. Initial tradeoffs are made and steps are taken to identify the cost, schedule, performance, and supportability risks, and assess their possible impact.

The solicitation: The solicitation phase includes all tasks and activities needed to refine the specifications, statement of work, and evaluation criteria into the proposal document or the request for bid, if the sealed bidding process is to be followed. Part of this task is determining the appropriate pricing arrangement; identifying government-furnished property needs, bonding requirements, and data needs; placing the appropriate requirements documents on the Internet; and announcing the business opportunity in the Commerce Business Daily. The pre-bid/proposal conference is held at this time, and amendments to the request for bid or proposal are also made during this phase.

Source selection: For negotiated procurements the integrated acquisition team evaluates potential contractors’ proposals for technical content and cost analysis using the evaluation criteria defined in the solicitation. The team assesses the past performance records of prospective contractors, completes tradeoffs, and makes the competitive range decision. It then undertakes discussions with sources within the competitive range and makes the best value tradeoff determination. The team then finalizes the negotiation strategy and plan. If a sealed bid is involved, the team receives and administers the responses.

Negotiations: Negotiation is not an event but a process. There is a need to gather data and to prepare a negotiation plan before actual face-to-face bargaining. Therefore, negotiation planning overlaps previous steps in the acquisition process. In this phase the bargaining segment of negotiations is conducted. Agreement is reached, and appropriate changes are made to the draft contract (solicitation) to ensure that it conforms to the negotiated agreement and can be used as the contractual document.

Contract award: The parties execute the conforming contract, which represents common language for the integrated acquisition team and the foundation for managing risks and opportunities.

Contract performance: At this point a post-award conference is held, and the integrated acquisition team transitions to performing tasks and activities that focus on contract performance, such as risk and opportunity (MR＆O) variance analysis. Consent to subcontract is approved as required. Contracting officers implement change management procedures. Delivery schedules are monitored and action taken in the event of a variance. Quality assurance activity begins, and deliverables are tested, inspected, and accepted.

Contract closeout: Payments are processed and obligations discharged. In the event the contract is terminated for default or for convenience of the government, the tasks and activities necessary to settle all outstanding contractual issues and obligations are performed as part of this phase of the acquisition process.