10.5 Acquisition/Contracting Process

The contracting process involves all activities associated with identifying and justifying a mission need, formulating an acquisition strategy to meet this need, and implementing the strategy by means of a contractual relationship with the private sector. The contracting process follows the five phases as outlined in Figure 10-4. The objective of a source selection is to select the proposal that represents the best value to the government.

Figure 10-4 The Acquisition Process

The contracting process is a partnership between the contracting office and project personnel. The Contracting Officer molds and shapes the procurement and is ultimately responsible for contract award and administration. However, a cohesive effort between the Contracting and Project Officer – including the participation of both contractual and technical subject matter experts – is essential to managing and completing the steps in this phase of the contracting process. The requirements phase includes:

• Customer requirements: This is a very important activity. If this is wrong then there is little chance of satisfying the warfighter. One of the problems programs face is that often manufacturing considerations are not identified as warfighter needs. The warfighter may want an aircraft the "flies fast, flies far, flies undetected, and can drop a lot of ordinance." The warfighter would never ask for an aircraft that is producible, or one that has low manufacturing risks. If programs are to be successful PMs need to craft manufacturing requirements in a way that helps programs to achieve cost, schedule and performance or other warfighter requirements.
• Market research: Is used to determine current industrial base capabilities and to:
  • Identify products and technologies, particularly to determine if a commercial item can meet the Government's requirements.
  • Identify the size and status of potential vendors.
  • Assess the competitiveness of the market.
  • Identify commercial practices.
• SOW/SOO: The Statement of Work (SOW) is used to identify the offeror's required terms that need to be performed in order for the contractor to be paid. After the SOW becomes a part of the contract, it is used to measure contractor performance. The Statement of Objectives (SOO) is a brief description of the basic, top-level objectives of the acquisition in the Request for Proposal (RFP). Offerors use the SOO as a basis for preparing the SOW, which is then included in their bid and gets evaluated during the source selection.

The Acquisition Strategy should describe what the basic contract buys; how the items are defined; options, if any, and prerequisites for exercising them; and the events established in the contract to support appropriate exit criteria for the phase or immediate development activity. In addition, the Acquisition Strategy should include market research, address competition, and identify any incentive strategies needed to promote the attainment of selected program priorities, such as cost and/or schedule goals. DFARS 207.105 describes the required contents of written acquisition plans. Major acquisition programs are required to address the following manufacturing and industrial base related items:

• An analysis of the capabilities of the national technology and industrial base to develop, produce, maintain, and support the program, including consideration of factors related to foreign dependency:
  • The availability of essential raw materials, special alloys, composite materials, components, tooling, and production test equipment for the sustained production of systems fully capable of meeting the performance objectives established for those systems; the uninterrupted maintenance and repair of such systems; and the sustained operation of such systems.
  • The identification of items available only from sources outside the national technology and industrial base (recall that this base includes the U.S. and Canada).
  • The availability of alternatives for obtaining such items from within our industrial base if such items become unavailable from sources outside the national technology and industrial base; and an analysis of any military vulnerability that could result from the lack of reasonable alternatives.
  • The effects our industrial base that result from foreign acquisition of U.S. firms.
• Consideration of requirements for efficient manufacture during the design and production of the systems to be procured under the program.
• The use of advanced manufacturing technology, processes, and systems during the research and development phase and the production phase of the program.
• The use of contracts that encourage competing offerors to acquire modern technology, production equipment, and production systems that increase the productivity and reduce the life-cycle costs.
• Methods to encourage investment by U.S. domestic sources in advanced manufacturing technology production equipment and processes through:
  • Recognition of the contractor's investment in advanced manufacturing technology production equipment, processes, and organization of work systems that build on workers' skill and experience, and work force skill development in the development of the contract objective; and
  • Increased emphasis in source selection on the efficiency of production.
• Expanded use of commercial manufacturing processes rather than processes specified by DoD.
• Elimination of barriers to, and facilitation of, the integrated manufacture of commercial items and items being produced under DoD contracts.
• Expanded use of commercial items, commercial items with modifications, or to the extent commercial items are not available, nondevelopmental items.
• Acquisition of major weapon systems as commercial items.

Figure 10-5 Request for Proposal

An RFP is a formal negotiated solicitation issued for buys over $100,000 resulting in a formal contract. This phase is about contract formulation. It includes the contract form, contract clauses, work statements, specifications, the delivery schedule and payment terms.

The contract's primary function is technical with the administrative function secondary. The RFP must contain clear and sufficient technical guidance so the contractor has a definite picture of how the system is envisioned to perform once delivered. It is also important that a technical functional description of software and hardware requirements is included and that those requirements are clearly scoped. Inconsistencies, insufficient detail, and inappropriate requirements will result in an inadequate response from industry. Manufacturing considerations appropriate for RFPs could include:

• Production Cost,
• Quality Systems,
• Manufacturing Development and Demonstration,
• Production, Quality and Manufacturing Efficiency,
• Producibility Engineering, and
• Process Control and Capability.

The vision for the Federal Acquisition System is to deliver, on a timely basis, the best value product or service to the customer. This is accomplished by using contractors who have a track record of successful past performance or who demonstrate a current superior ability to perform a contract.

Proposal evaluation is an assessment of the proposal and the offeror's ability to perform the prospective contract successfully. Evaluations may be conducted using any rating method or combination of methods, and may include:

• Cost or Price evaluation,
• Past performance evaluation,
• Technical/Quality evaluation,
• Cost information, and
• Production capabilities.

The proposal evaluation criteria must be clearly identified and defined in the request for proposal (RFP). Proposal evaluations must be conducted so the government can select the proposal providing the best value to the government. Best value can be determined using one of two methods: lowest price, technically acceptable or tradeoff. Proposal evaluation is also conducted for sole source acquisitions as part of agency preparations to assist agencies prepare for negotiations with suppliers.

Proposal Evaluation Stages:

• Stage One – Planning. This stage includes establishing the evaluation criteria for award and submitting the evaluation criteria to the source selection authority for approval.
• Stage Two – Forming The Evaluation Team. This stage includes:
  • Determining the specific teaming approach to be used;
  • Nominating team members and selecting supporting contractor personnel;
  • Briefing panel members on their responsibilities;
  • Distributing documents and instructions to be used during the proposal evaluation; and
  • Convening the evaluation panel.
• Stage Three – Conducting The Evaluation. This stage is tailored based on whether the tradeoff, lowest price and technically acceptable (LPTA), or sole-source approach is used.

Successful proposal evaluation depends on:

• Appropriate, well-defined evaluation criteria;
• Evaluation rating standards that are understood and applied consistently among evaluators and among all proposals being evaluated;
• A careful review of the language in each proposal to ascertain how the offeror will meet the requirements of the RFP and to identify assumptions and statements that may indicate increased cost/price and/or risk to the government; and
• Fully documented evaluation findings.

The contract is awarded upon completion of final evaluations and approval of the required clearance documentation. The Contracting Officer will notify the successful offeror by furnishing the executed contract. Based on the procurement/contract type, the award should occur via one of the following forms:

• Standard Form (SF) 26 Award/Contract;
• SF 33 Solicitation, Offer and Award;
• SF 1449 Solicitation/Contract/Order for Commercial Items; and
• DD 1155 Order for Supplies or Services.

The contracting officer publishes the notice of contract award via synopsis, which in turn posts all notifications to (FedBizOpps). Following a contract award, the Contracting Officer may, on behalf of Contractors, choose to publish a notice of subcontracting opportunity, if appropriate, under the following circumstances:

• A Contractor is awarded a contract exceeding $100,000 that is likely to result in the award of any subcontracts.
• A subcontractor or supplier, at any tier, under a contract exceeding $100,000, has a subcontracting opportunity exceeding $10,000.

The notice must describe the business opportunity, any pre-qualification requirements, and where to obtain technical data needed to respond to the requirement.

The Contracting Officer shall provide written notification to each unsuccessful offeror. The notice shall include the following:

• Number of Offerors solicited.
• Number of offers received.
• Name and address of each offeror receiving an award.
• Items, quantities, and any stated unit prices of each award.
• In general terms, reason(s) the offeror's proposal was not accepted, unless the price information readily reveals the reason.

The Contracting Officer may delegate contract administration functions to the Defense Contract Management Agency (DCMA), see FAR 42.302 and DFARS 242.302.