Acquisition Planning
Opportunities to Build Strong Foundations for Better Services Contracts Gao ID: GAO-11-672 August 9, 2011In Process
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. 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.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: John P. Hutton Team: Government Accountability Office: Acquisition and Sourcing Management Phone: (202) 512-7773GAO-11-672, Acquisition Planning: Opportunities to Build Strong Foundations for Better Services Contracts
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United States Government Accountability Office:
GAO:
Report to the Committee on Homeland Security and Governmental Affairs,
U.S. Senate:
August 2011:
Acquisition Planning:
Opportunities to Build Strong Foundations for Better Services
Contracts:
GAO-11-672:
GAO Highlights:
Highlights of GAO-11-672, a report to the Committee on Homeland
Security and Governmental Affairs, U.S. Senate.
Why GAO Did This Study:
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.
What GAO Found:
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.
Figure: Time Measured for Acquisition Planning Phases:
[Refer to PDF for image: illustration]
Acquisition planning process: No lead times established:
Pre-solicitation (longest phase);
Procurement request (about one-third as long as previous phase).
Contracting lead times:
Solicitation (about one-half as long as previous phase).
Award (about the same as previous phase).
Source: GAO analysis of agency acquisition planning processes.
[End of figure]
What GAO Recommends:
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.
View [hyperlink, http://www.gao.gov/products/GAO-11-672] or key
components. For more information, contact John Hutton at (202) 512-
4841 or huttonj@gao.gov.
[End of section]
Contents:
Letter:
Background:
Agencies Established Different Requirements and Levels of Oversight
for Acquisition Planning:
Agencies Missed Opportunities to Build Strong Foundations for Services
Contracts:
Agencies Have Not Established Time Frames for When Program Offices
Should Begin Acquisition Planning:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Pre-solicitation Phase Activities:
Appendix III: Procurement Request Phase Activities:
Appendix IV: Solicitation Phase Activities:
Appendix V: Selected Case Example Contracts:
Appendix VI: Comments from the Department of Homeland Security:
Appendix VII: Comments from the National Aeronautics and Space
Administration:
Appendix VIII: Comments from the U.S. Agency for International
Development:
Appendix IX: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Acquisition Planning in the FAR:
Table 2: Known Challenges in Acquisition Planning:
Table 3: Acquisition Planning Thresholds by Agency:
Table 4: Review and Approval of Written Acquisition Plans:
Table 5: Contracting Lead Times Established in Agency Guidance:
Figures:
Figure 1: Typical Acquisition Planning Phases:
Figure 2: Levels of Documentation for 24 Selected Contracts:
Figure 3: Time Measured for Acquisition Planning Activities:
Abbreviations:
HHS: Department of Health and Human Services:
DHS: Department of Homeland Security:
FAR: Federal Acquisition Regulation:
FPDS-NG: Federal Procurement Data System-Next Generation:
NASA: National Aeronautics and Space Administration:
USAID: U.S. Agency for International Development:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
August 9, 2011:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
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.[Footnote 1]
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.[Footnote 2] 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
Institutes of Health;
* DHS's Customs and Border Protection and Federal Emergency Management
Agency;
* 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.[Footnote 3]
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.[Footnote 4] 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.
Background:
Acquisition Planning Process for Individual Contracts:
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.
Figure 1: Typical Acquisition Planning Phases:
[Refer to PDF for image: illustration]
Instructions for interactive graphic:
Clicking the mouse on each box will take you to appendix II, III, and
IV for more information.
Program Office:
Pre-solicitation:
Need identified.
Procurement request: (overlap with Contracting Office)
Request for contract submitted;
Request for contract completed.
Contracting Office:
Solicitation:
Published solicitation.
Source: GAO analysis of agency acquisition planning processes.
[End of figure]
Selected Elements of Acquisition Planning:
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.
Table 1: Acquisition Planning in the FAR:
Elements of acquisition planning: Written acquisition plans;
Acquisition planning in the FAR[A]: Agency heads shall prescribe
procedures to:
* Establish criteria and thresholds at which the acquisition becomes
more complex and costly and requires greater detail and formality in
the planning process, and specify if and when to prepare a written
plan;
* Establish standard acquisition plan formats, if desired, suitable to
agency needs.
Elements of acquisition planning: Requirements development;
Acquisition planning in the FAR[A]: Agency heads shall prescribe
procedures to:
* Ensure program officials responsible for acquisition planning
specify needs in a way that promotes and provides for full and open
competition;
* Ensure requirements for services are clearly defined and appropriate
performance standards are developed and understandable;
The FAR generally requires use of performance-based acquisition
practices for services to the maximum extent practicable. This
includes the use of requirements documents such as performance work
statements and statements of objectives.
Elements of acquisition planning: Cost estimates;
Acquisition planning in the FAR[A]:
* Written acquisition plans may establish cost goals and provide a
rationale supporting those goals;
* The contracting officer may use an independent government cost
estimate to help establish the reasonableness of contractors' costs or
prices.
Elements of acquisition planning: Incorporating lessons learned;
Acquisition planning in the FAR[A]: Agency heads shall prescribe
procedures to:
* Ensure that the contracting officer, prior to contracting, reviews
the acquisition history;
* Ensure that knowledge gained from prior acquisitions is used to
further refine requirements and acquisition strategies.
Elements of acquisition planning: Time frames for acquisition planning;
Acquisition planning in the FAR[A]: Agencies should begin acquisition
planning activities for contracts as soon as the need is identified
and preferably well in advance of the fiscal year when the contract
needs to be awarded to obtain timely services.
Source: GAO analysis of the FAR.
[A] For the purposes of this report, we reviewed FAR provisions in
effect in fiscal year 2009. In March 2011, several changes were made
to FAR Part 7, including additions to the agency head
responsibilities. See 76 Fed. Reg. 14,542 (Mar. 16, 2011).
[End of table]
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.
Table 2: Known Challenges in Acquisition Planning:
Elements of acquisition planning: Requirements development;
Our previous work: In 2008, we reported that DHS experienced cost
overruns, schedule delays, or did not otherwise meet performance
expectations in several services contracts for major, complex
investments that did not have well-defined requirements, a complete
set of measurable performance standards, or both[A].
Elements of acquisition planning: Cost estimates;
Our previous work: In 2010, we reported the Office of the Federal
Detention Trustee faced challenges developing high-quality cost
estimates due in part to unstable requirements[B];
In 2010, we also reported on challenges faced by the Department of
Energy to develop high-quality cost estimates, including not having
coordination between the necessary stakeholders in the process[C];
In 2009, we reported on the importance of having a well-documented,
comprehensive, accurate, and credible cost estimate before the
government solicits proposals[D].
Elements of acquisition planning: Incorporating lessons learned;
Our previous work: In 2009, we found little evidence that officials at
selected agencies had analyzed contracts' pricing history and
requirements to determine if they could transition to a contract type
with firmer pricing, even though experience may have provided a basis
for doing so[E];
In 2004, we reported that a knowledge base of important lessons
learned from the acquisition process and the design and execution of
projects can help program and acquisition staff plan future
acquisitions using other transactions authority[F];
In 2008, we again observed that knowledge gained from past projects
could allow DHS to inform planning to maximize the benefits of future
projects. We reported that DHS had not developed a system for
capturing knowledge from its own projects, which may have limited its
ability to learn from experience and adapt approaches going forward[G].
Elements of acquisition planning: Time frames for acquisition planning;
Our previous work: In 2010, we reported that contracting officials
expressed concerns that not enough time was allowed to execute a
sufficiently robust acquisition planning process, including defining
requirements, which may have hindered opportunities for competition[H].
In 2008, we reported on challenges to collaboration between DHS
contracting and program offices in planning for complex, performance-
based services acquisitions, and noted that this type of collaboration
often requires more time for acquisition planning[I].
Source: GAO.
[A] [hyperlink, http://www.gao.gov/products/GAO-08-263].
[B] GAO, Office of the Federal Detention Trustee's (OFDT) Cost
Estimation Methods Reflect Features of Best Practices, but Processes
Could be Enhanced, [hyperlink,
http://www.gao.gov/products/GAO-10-1037R] (Washington, D.C.: Sept. 30,
2010).
[C] GAO, Department of Energy: Actions Needed to Develop High-Quality
Cost Estimates for Construction and Environmental Cleanup Projects,
[hyperlink, http://www.gao.gov/products/GAO-10-199] (Washington, D.C.:
Jan. 14, 2010).
[D] [hyperlink, http://www.gao.gov/products/GAO-09-3SP].
[E] GAO, Contract Management: Extent of Federal Spending under Cost-
Reimbursement Contracts Unclear and Key Controls Not Always Used,
[hyperlink, http://www.gao.gov/products/GAO-09-921] (Washington, D.C.:
Sept. 30, 2009).
[F] [hyperlink, http://www.gao.gov/products/GAO-05-136].
[G] GAO, Department of Homeland Security: Improvements Could Further
Enhance Ability to Acquire Innovative Technologies Using Other
Transaction Authority, [hyperlink,
http://www.gao.gov/products/GAO-08-1088] (Washington, D.C.: Sept. 23,
2008). In October 2009, DHS issued guidance that program and
contracting officials should discuss and document lessons learned at
the conclusion of other transactions authority projects for future use.
[H] GAO, Federal Contracting: Opportunities Exist to Increase
Competition and Assess the Reasons When Only One Offer is Received,
[hyperlink, http://www.gao.gov/products/GAO-10-833] (Washington, D.C.:
July 26, 2010).
[I] [hyperlink, http://www.gao.gov/products/GAO-08-263].
[End of table]
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:[Footnote 5]
* 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.[Footnote 6]
* 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.[Footnote 7]
Agencies Established Different Requirements and Levels of Oversight
for Acquisition Planning:
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.
Most Agencies Have Set Requirements for Written Acquisition Plans:
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.
[Footnote 8] 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.[Footnote 9] 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.
Table 3: Acquisition Planning Thresholds by Agency:
Agency: HHS;
Written acquisition plan thresholds: $500,000 and above;
Proportion of dollars awarded on services contracts in fiscal year
2010 above the written acquisition plan thresholds: 98 percent of $15
billion in contract awards.
Agency: DHS;
Written acquisition plan thresholds: $10 million and above[A];
Proportion of dollars awarded on services contracts in fiscal year
2010 above the written acquisition plan thresholds: 80 percent of $6.9
billion in contract awards.
Agency: NASA;
Written acquisition plan thresholds: $10 million and above require
written acquisition plans/procurement strategy meetings[B];
Proportion of dollars awarded on services contracts in fiscal year
2010 above the written acquisition plan thresholds: 99 percent of
$83.1 billion in contract awards.
Agency: USAID;
Written acquisition plan thresholds: None[C];
Proportion of dollars awarded on services contracts in fiscal year
2010 above the written acquisition plan thresholds: 0 percent of $3.1
billion in contract awards.
Source: GAO analysis of agency policies and data from FPDS-NG.
[A] DHS requires entry of basic information into an Advanced
Acquisition Plan database for all planned awards below $10 million. If
the information is not included in the database, DHS guidance states
that a written acquisition plan is required.
[B] In certain cases, NASA headquarters may also require procurement
strategy meetings for acquisitions below the $10 million threshold. A
procurement strategy meeting is an acquisition plan conducted through
a meeting attended by all interested NASA offices, to seek approval
for the proposed approach. NASA considers briefing documents and
minutes from these meetings, which are required to be included in the
contract file, to satisfy the requirements for a written acquisition
plan. Any acquisition not expected to exceed $10 million is to follow
component procedures regarding when acquisition plans or procurement
strategy meetings are required.
[C] Although USAID requires some documentation of acquisition
planning, it does not require written acquisition plans for individual
contracts similar to those required by the other agencies in our
review.
[End of table]
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.[Footnote 10] 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.[Footnote 11] 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.[Footnote 12] 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.[Footnote 13] 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.
Agencies' Guidance Call for Requirements Documents and Cost Estimates;
DHS and NASA Also Include Incorporating Lessons Learned in Acquisition
Planning:
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.
[Footnote 14] 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.[Footnote 15]
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.
Agencies Have Different Requirements for Reviewing and Approving
Acquisition Planning Documents:
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.
Table 4: Review and Approval of Written Acquisition Plans:
Highest level of review and approval: Contract value.
Highest level of review and approval: Headquarters procurement office;
Contract value: HHS: No requirement;
Contract value: DHS: Services with annual expenditures of $100 million
and above, unless delegated to component;
Contract value: NASA: $50 million and above, unless delegated to
component[A].
Highest level of review and approval: Component procurement office
leadership;
Contract value: HHS: No requirement;
Contract value: DHS: Services with annual expenditures below $100
million, or when approval delegated to component;
Contract value: NASA: $10 million to $50 million; or as delegated by
headquarters[B].
Highest level of review and approval: Contracting officer;
Contract value: HHS: All contracts[C];
Contract value: DHS: All written acquisition plans approved at a
higher level;
Contract value: NASA: Johnson Space Center's $5 million to 10 million
abbreviated "short form plans."
Source: GAO analysis of agency policies and guidance.
[A] Headquarters review is performed by conducting procurement
strategy meetings. NASA headquarters can also select contracts for
review below $50 million. See also NASA FAR Supplement 1807.7100.
[B] NASA policies leave review of written plans for acquisitions not
requiring headquarters approval to the discretion of the components.
This information reflects requirements at the components we reviewed.
[C] According to HHS regulations, the head of the sponsoring program
office, project officer, funds certification official, contracting
officer and other signatories, in accordance with component policies,
shall review and certify that the acquisition plan provides all the
required information in the proper format.
[End of table]
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.[Footnote 16] 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.
Agencies Missed Opportunities to Build Strong Foundations for Services
Contracts:
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.)
[Footnote 17] 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.
Challenges Defining Agency Needs:
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.[Footnote 18]
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.
Rationales for Cost Estimates Are Not Always Documented to Inform
Acquisition Planning:
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.[Footnote 19] 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.[Footnote 20] (See figure 2.)
Figure 2: Levels of Documentation for 24 Selected Contracts:
[Refer to PDF for image: stacked horizontal bar graph]
Level of documentation:
No cost estimate documented:
USAID: 2;
NASA: 0;
DHS: 0;
HHS: 0.
Did not document assumptions or sources:
USAID: 1;
NASA: 0;
DHS: 2;
HHS: 0.
Documented sources but not assumptions:
USAID: 0;
NASA: 0;
DHS: 1;
HHS: 0.
Documented assumptions but not sources:
USAID: 2;
NASA: 2;
DHS: 2;
HHS: 4.
Fully documented estimates:
USAID: 1;
NASA: 4;
DHS: 1;
HHS: 2.
Source: GAO analysis of agency data and documents.
[End of figure]
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.
Limited Documentation of Lessons Learned from Previous Contracts:
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.[Footnote 21] 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 contract,
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.
* 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.
Agencies Have Implemented Additional Tools and Resources to Support
Acquisition Planning:
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.
Agencies Have Not Established Time Frames for When Program Offices
Should Begin Acquisition Planning:
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.
Agencies Have Measured and Established Expected Time Frames for the
Last Phase of Acquisition Planning:
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).
Table 5: Contracting Lead Times Established in Agency Guidance:
Agency: USAID (Washington, D.C.);
Contracting lead times established: [Check];
Considerations for planning lead times[A]: Type of contract action and
level of competition;
Range of contracting lead times for contract actions (days)[B]: 27-245.
Agency: DHS: Federal Emergency Management Agency;
Contracting lead times established: [Check];
Considerations for planning lead times[A]: Type of contract action,
estimated contract value, and commercial availability of the service
or product;
Range of contracting lead times for contract actions (days)[B]: 30-210.
Agency: DHS: Customs and Border Protection;
Contracting lead times established: [Empty];
Considerations for planning lead times[A]: Customs and Border
Protection has not established contracting lead times;
Range of contracting lead times for contract actions (days)[B]:
[Empty].
Agency: NASA: Goddard Space Flight Center;
Contracting lead times established: [Check];
Considerations for planning lead times[A]: Estimated contract value
and level of competition;
Range of contracting lead times for contract actions (days)[B]: 17-297.
Agency: NASA: Johnson Space Center;
Contracting lead times established: [Empty];
Considerations for planning lead times[A]: Johnson Space Center has
not established contracting lead times;
Range of contracting lead times for contract actions (days)[B]:
[Empty].
Agency: HHS: National Institutes of Health;
Contracting lead times established: [Check];
Considerations for planning lead times[A]: Type of contracting method,
estimated contract value, level of competition, and whether or not
contract is for research and development;
Range of contracting lead times for contract actions (days)[B]: 1-360.
Agency: HHS: Centers for Disease Control and Prevention;
Contracting lead times established: [Check];
Considerations for planning lead times[A]: Type of contract action,
estimated contract value, and level of competition;
Range of contracting lead times for contract actions (days)[B]: 24-100.
Source: GAO analysis of agency guidance.
[A] Contract actions include, for example, new contract awards, task
orders, and actions using simplified procedures, but exclude
modifications. Level of competition describes whether or not the
action is expected to use competitive procedures.
[B] For some agencies, these ranges are updated annually.
[End of table]
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.
Agencies Have Not Defined the Time Frames Needed to Develop Key
Acquisition Planning Documents:
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.
Figure 3: Time Measured for Acquisition Planning Activities:
[Refer to PDF for image: illustration]
Acquisition planning process: No lead times established:
Pre-solicitation (longest phase);
Procurement request (about one-third as long as previous phase).
Contracting lead times:
Solicitation (about one-half as long as previous phase).
Award (about the same as previous phase).
Source: GAO analysis of agency acquisition planning processes.
Note: While this time line is notional, the phases are sized relative
to the proportion of time allocated to them in our selected contracts.
[End of figure]
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.[Footnote 22] 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.
Conclusions:
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.
Recommendations for Executive Action:
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;
and:
* 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.
Agency Comments and Our Evaluation:
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 [hyperlink, 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.
Signed by:
John P. Hutton, Director:
Acquisition and Sourcing Management:
[End of section]
Appendix I: Scope and Methodology:
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.[Footnote 23] 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.[Footnote 24]
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.[Footnote 25] 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.[Footnote 26] Our selection of contracts included 24
contracts, 6 from each agency.[Footnote 27] The specific agency
component locations in our review were as follows:
* HHS's Centers for Disease Control and Prevention and National
Institutes of Health;
* DHS's Customs and Border Protection and Federal Emergency Management
Agency;
* 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.[Footnote 28]
Within each selected component we selected three contracts awarded by
that component's contracting office in fiscal year 2008 and fiscal
year 2009.[Footnote 29]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.
[End of section]
Appendix II: Pre-solicitation Phase Activities:
[Refer to PDF for image: illustration]
Instructions: click here to return to figure 1.
Contracting office:
Price analysts;
Business specialists.
Determines need.
Determines resources available for contract.
Performs market research.
Contracting office may have assistance from:
Develops statement of work, cost estimate,and other pertinent
documents.
Source: GAO analysis of agency acquisition planning processes.
[End of section]
Appendix III: Procurement Request Phase Activities:
[Refer to PDF for image: illustration]
Instructions: click here to return to figure 1.
Contracting office:
Price analysts;
Business specialists.
Develops statement of work, cost estimate,and other pertinent
documents:
Revisions:
Program office submits request for contract and acquisition plan;
Contracting Officer and appropriate stakeholders reviews and approval.
Source: GAO analysis of agency acquisition planning processes.
[End of section]
Appendix IV: Solicitation Phase Activities:
[Refer to PDF for image: illustration]
Instructions: click here to return to figure 1.
Contracting office:
Price analysts;
Business specialists.
Contracting office performs solicitation activities;
Contracting office issues solicitation.
Source: GAO analysis of agency acquisition planning processes.
[End of section]
Appendix V: Selected Case Example Contracts:
Component: HHS: Centers for Disease Control and Prevention;
Description: Biosafety laboratory Inspection;
Total contract value at award: $421,435;
New or follow-on contract: New;
Level of competition[A]: Not competed;
Contract type: Fixed price with economic adjustment;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: HHS: Centers for Disease Control and Prevention;
Description: Logistics and meeting support;
Total contract value at award: $4.1 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Not competed;
Contract type: Firm fixed price;
Written acquisition plan: No;
Cost estimate pre-solicitation: Yes.
Component: HHS: Centers for Disease Control and Prevention;
Description: Management and technical consulting;
Total contract value at award: $210 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Firm fixed price or fixed price labor hours;
Written acquisition plan: No;
Cost estimate pre-solicitation: Yes.
Component: HHS: National Institutes of Health;
Description: Conference planning support;
Total contract value at award: $1.3 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Firm fixed price;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: HHS: National Institutes of Health;
Description: Educational marketing;
Total contract value at award: $2.5 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Not competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: HHS: National Institutes of Health;
Description: IT support;
Total contract value at award: $18.5 million;
New or follow-on contract: New;
Level of competition[A]: Competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: DHS: Customs and Border Protection;
Description: IT lifecycle support;
Total contract value at award: $2 million;
New or follow-on contract: New;
Level of competition[A]: Not competed;
Contract type: Firm fixed price;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: DHS: Customs and Border Protection;
Description: Advertising support;
Total contract value at award: $13.6 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Time-and-materials;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: DHS: Customs and Border Protection;
Description: Background investigation;
Total contract value at award: $125 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Firm fixed price;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: DHS: Federal Emergency Management Agency;
Description: Setting building standards for earthquake hazards;
Total contract value at award: $4.5 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Not competed;
Contract type: Cost with no fee;
Written acquisition plan: Yes (none required);
Cost estimate pre-solicitation: Yes.
Component: DHS: Federal Emergency Management Agency;
Description: Public service campaign for emergency preparedness;
Total contract value at award: $11 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Not competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: DHS: Federal Emergency Management Agency;
Description: Disaster response;
Total contract value at award: $375 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Firm fixed price/cost plus fixed fee hybrid;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: NASA: Goddard Space Flight Center;
Description: Electronics development for lunar equipment;
Total contract value at award: $2 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Not competed;
Contract type: Cost with no fee;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: NASA: Goddard Space Flight Center;
Description: Facility maintenance and operations;
Total contract value at award: $29 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Not competed;
Contract type: Cost with no fee;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: NASA: Goddard Space Flight Center;
Description: Facility test and integration;
Total contract value at award: $190 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Cost plus fee;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: NASA: Johnson Space Center;
Description: Maintenance of aircraft fleet;
Total contract value at award: $4.9 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Time-and-materials;
Written acquisition plan: Yes (none required);
Cost estimate pre-solicitation: Yes.
Component: NASA: Johnson Space Center;
Description: Reviews and assessments for planning office;
Total contract value at award: $30 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Firm fixed price;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: NASA: Johnson Space Center;
Description: International Space Station technical support;
Total contract value at award: $180 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Fixed rate;
Written acquisition plan: Yes;
Cost estimate pre-solicitation: Yes.
Component: USAID: Agencywide;
Description: Regional cooperation program technical and administrative
support;
Total contract value at award: $1.8 million;
New or follow-on contract: New;
Level of competition[A]: Competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: USAID: Agencywide;
Description: Chief Operating Office program and operational support;
Total contract value at award: $3.2 million;
New or follow-on contract: New;
Level of competition[A]: Not competed;
Contract type: Time-and-materials;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: USAID: Agencywide;
Description: Microenterprise development communications and training
support;
Total contract value at award: $18.7 million;
New or follow-on contract: New;
Level of competition[A]: Competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: No.
Component: USAID: Democracy, Conflict, and Humanitarian Assistance
Division;
Description: Technical and analytical services for setting nutritional
standards for food aid;
Total contract value at award: $1.5 million;
New or follow-on contract: New;
Level of competition[A]: Competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: USAID: Democracy, Conflict, and Humanitarian Assistance
Division;
Description: Disaster assistance in Latin America;
Total contract value at award: $29.6 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Cost plus fixed fee;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: Yes.
Component: USAID: Democracy, Conflict, and Humanitarian Assistance
Division;
Description: Global anticorruption and good governance;
Total contract value at award: $750 million;
New or follow-on contract: Follow-on;
Level of competition[A]: Competed;
Contract type: Time-and-materials;
Written acquisition plan: No (none required);
Cost estimate pre-solicitation: No.
Source: GAO analysis of documents from selected contract files.
[A] Level of competition describes whether or not the action used
competitive procedures.
[End of table]
[End of section]
Appendix VI: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
July 20, 2011:
John P. Hutton:
Director, Acquisition and Sourcing Management:
441 G Street, NW:
U.S. Government Accountability Office:
Washington, DC 20548:
Re: Draft Report GAO-11-672, "Acquisition Planning: Opportunities to
Build Strong Foundations for Better Services Contracts"
Dear Mr. Hutton:
Thank you for the opportunity to review and comment on this draft
report. The U.S. Department of Homeland Security (DHS) appreciates the
U.S. Government Accountability Office's (GAO's) work in planning and
conducting its review and issuing this report.
The Department is pleased to note the report's positive acknowledgment
that DHS has established policies that set different requirements and
levels of oversight for acquisition planning to balance oversight with
time and administrative burden. The report also recognizes that DHS
has implemented policies and guidance for written acquisition plans
that closely align with Federal Acquisition Regulation (FAR)
requirements. DHS is committed to continuing efforts to instill more
discipline and rigor in its acquisition planning process.
This draft report contained two recommendations, directed at DHS, one
with which DHS concurs and one with which the Department nonconcurs.
Specifically, in order to take full advantage of important acquisition
planning elements and to ensure that information is available for
future use, GAO recommended that the Secretary of Homeland Security:
Recommendation 1: Direct its procurement office 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.
Response: Concur. With regard to ensuring that agency and Component
guidance clearly define the role of cost estimating, the Homeland
Security Acquisition Manual (HSAM) contains guidance on the
applicability of an Independent Government Cost Estimates (IGCE).
DHS created a computer based training class on the preparation of
IGCE's and is in the process of issuing a Contracting Office Technical
Representative Core Element Guide. Additionally, some of the DHS
Component procurement offices have Standard Operating
Procedures/guidance on ICGE preparation. We will review our
regulations/guidance and determine the appropriate action to ensure
that the existing guidance clearly defines cost estimating.
With regard to the recommendation on lessons learned, the October 2009
HSAM 3007 policy governing acquisition planning and Appendix H did not
address lessons learned. However, the Office of the Chief Procurement
Officer issued HSAM Notice 2011-06 on Thursday, June 30, 2011, to
update HSAM 3007 and Appendix H. The updated policy revised Part II,
Section B5, Acquisition Considerations to include a data element
requiring acquisition planners to discuss "whether lessons learned
from previous acquisitions impact any aspect of the current
acquisition and if knowledge gained from the prior acquisitions has
been used to further refine the requirement or the acquisition
strategy consistent with FAR 7.103(r). If prior acquisitions have not
been reviewed, provide the rationale for not reviewing historical
information to obtain lessons learned."
To allow sufficient time for acquisition planning, GAO also
recommended that the Secretary of Homeland Security:
Recommendation 2: Direct its 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.
Response: Nonconcur. DHS does not believe it is necessary, nor is it
an efficient use of resources, to collect data in order to establish
timeframes for when program officials should begin acquisition
planning because the existing FAR and DHS policy already adequately
address this issue. In particular, FAR 7.104(a) states "Acquisition
planning should begin as soon as the agency need is identified,
preferably well in advance of the fiscal year in which contract award
or order placement is necessary. In developing the plan, the planner
shall form a team consisting of all those who will be responsible for
significant aspects of the acquisition, such as contracting; fiscal;
legal; and technical personnel." DHS policy further emphasizes the
need for adequate acquisition planning. HSAM Notice 2011-06 added
subsection 3007.104 encourages early planning and addresses
procurement administrative lead times:
"In accordance with FAR 7.104(a), acquisition planning should begin as
soon as the agency need is identified. Planners must pay close
attention to the procurement administrative lead time (PALT) needed to
award complex procurements using various methods of procurement and
contract types, taking into consideration the need for vendor
engagement, and the need to conduct the workforce assessment. Early
formation of the IPT will ensure that the appropriate subject matter
experts described at HSAM 3007-102(b)(1) and FAR 7.104 are involved in
the development of the acquisition plan; that there is sufficient time
to ensure that the contracting officer complies with all requirements
of law, executive orders, regulations, and all other applicable
procedures, including clearances; and that goods and services are
procured in a timely manner and at a reasonable price to meet mission
needs. Planners shall ensure that acquisition plans are coordinated
with the appropriate small business specialist pursuant with the
threshold at FAR 7.104(d)(2)(i)(C)."
Again, thank you for the opportunity to review and comment on this
draft report. Technical comments were previously provided under
separate cover. We look forward to working with you on future Homeland
Security issues.
Sincerely,
Signed by:
Jim H. Crumpacker:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix VII: Comments from the National Aeronautics and Space
Administration:
National Aeronautics and Space Administration:
Headquarters:
Washington, DC 20546-0001:
Reply to Attn of Office of Procurement:
Mr. John P. Hutton:
Director:
Acquisition and Sourcing Management:
United States Government Accountability Office:
Washington, DC 20548:
Dear Mr. Hutton:
The National Aeronautics and Space Administration (NASA) appreciates
the opportunity to review and comment on the Government Accountability
Office (GAO) draft report entitled, "Acquisition Planning:
Opportunities to Build Strong Foundations for Better Services
Contracts" (GA041-672).
In the draft report, GAO provides two recommendations to the NASA
Administrator. Our responses to GAO's recommendations, along with
preliminary plans of action intended to implement the recommendations,
follow.
Recommendation 1: 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 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's Response: Concur. NASA agrees with the GAO finding that
the use of lessons learned is an effective means for improving an
Agency's contracting effectiveness. Several structural and procedural
methods are already in place to capture this information. Examples
include the Procurement Strategy Meeting (PSM) process and the
establishment of Source Evaluation Board (SEB) offices within many
NASA Centers. PSMs are required for select, high-value actions. The
PSM process requires acquisition teams to provide a structured
briefing that covers all acquisition plan requirements to senior NASA
stakeholders. At the briefing, comments and suggestions are recorded
in formal minutes that capture the remarks and their resolution. This
flow down of knowledge is formally captured in the contract file and
shared with teams preparing for subsequent PSMs.
Another technique is the establishment of Source Evaluation Board
(SEB) offices at the field centers. NASA Centers maintain SEB
coordinators who are responsible for managing major procurements and
lessons learned to ensure acquisition planning is consistently
applied. SEB offices assist program officials and contracting officers
when they are awarding large contract actions utilizing source
selection procedures. Formal source selection is the most complex
process an acquisition organization is likely to perform. Because of
their length (normally 12-18 months), contracting officers do not
repeat the process often. The SEB office supports all the source
selections at the Center and therefore benefits from experience with
multiple source selections. SEB staff gathers and shares the lessons
learned at the team in-briefs and in their "Just in Time" training
sessions. Often, the last contracting officer to complete a source
selection is asked to brief the incoming team on what they experienced
and learned. Lessons learned are built into checklists and templates.
In March of 2010, the NASA Office of General Counsel and the Office of
Procurement cosponsored a three-day seminar that covered all aspects
of source selection. The purpose of the training was to foster
communication and lessons learned from Headquarters and all Centers.
Topics addressed included review of the Source Selection Guide for SEB
Procedures, GAO Bid Protests, Conducting Debriefings, Price
Evaluations, Past Performance Evaluations, Lessons Learned from the
SEB Chair, and Lessons Learned from the Source Selection Authority. This
training session was attended by more than 100 Agency acquisition and
legal personnel across NASA and was very well received by all who
attended.
While these processes are effective, we plan to further enhance the
use of lessons learned. Acquisition plans will be required to
specifically address lessons learned from earlier contract actions and
steps taken to mitigate these issues as well as fully documenting the
rationale for cost estimates. Contracting officers will be encouraged
to review previously awarded contracts for similar goods/services to
enhance their understanding of the issues surrounding an acquisition.
Recommendation 2: 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 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's Response: Partially concur. The success of NASA's
missions depends on NASA's ability to acquire the systems research,
services, construction, and supplies required to plan, develop, and
execute its missions. NASA's Policy Directive 1000.5A "Policy for NASA
Acquisition" provides guidance on the acquisition process as it
complies with NASA obligations as a Federal agency. NASA does not
agree that procurement offices should establish timeframes for program
officials' acquisition planning. Acquisition planning timeframes will
differ across programs for reasons such as program complexity,
strategic planning, budget considerations, and the type of product or
service needed.
NASA will continue its commitment to timely acquisition planning with
sustained, strong relationships between Center procurement offices and
NASA program officials and through use of the NASA Master Buy Plan.
The Master Buy Plan already applies to each acquisition, including
supplemental agreements, and acquisitions with other Government
agencies, where the dollar value, including the aggregate amount of
options, follow-on acquisitions, or later phases of multi-phase
acquisitions, is considered significant. The NASA Master Buy Plan
Database (MBPD) is an acquisition planning tool that provides
information on planned acquisitions to enable management to focus its
attention on a representative selection of high-dollar-value and
otherwise sensitive acquisitions. All MBPD procurement actions are
measured against planned dates for the pre-award activities:
Procurement Strategy Meeting, Issuance of Draft RFP, Issuance of Final
RFP, Proposal Due Date, Pre-Negotiation Memo Date,
Discussions/Negotiations, Selection Date, Protests, Contract Award,
and Contract Cancellation.
Thank you for the opportunity to comment on this draft report. If you
have any questions or require additional information, please contact
Diane Thompson at (202) 358-0514.
Sincerely,
Signed by:
William P. McNally:
Assistant Administrator for Procurement:
[End of section]
Appendix VIII: Comments from the U.S. Agency for International
Development:
USAID:
From The American People:
July 21, 2011:
John P. Hutton:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Hutton:
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" (GA0-11-672).
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.
Sincerely,
Signed by:
Sean C. Carroll /s/:
Chief Operating Officer:
U.S. Agency for International Development:
Enclosure: a/s:
[End of letter]
"Acquisition Planning: Opportunities to Build Strong Foundations for
Better Services Contracts" (GA0-11-672)
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 FY 2012.
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.
[End of section]
Appendix IX: GAO Contact and Staff Acknowledgments:
GAO Contact:
John P. Hutton, (202)512-4841 or huttonj@gao.gov:
Staff Acknowledgments:
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.
[End of section]
Footnotes:
[1] Federal Acquisition Regulation (FAR) 7.102. The FAR defines
acquisition planning as the process by which the efforts of all
personnel responsible for an acquisition are coordinated and
integrated through a comprehensive plan for fulfilling the agency need
in a timely manner and at a reasonable cost. It includes developing
the overall strategy for managing the acquisition. FAR 2.101.
[2] As reported in the government's procurement database--the Federal
Procurement Data System-Next Generation (FPDS-NG).
[3] We chose two components at each agency with the exception of
USAID. We excluded acquisition offices at USAID overseas missions and
the contracts administered by those offices.
[4] For example, see: GAO Cost Estimating and Assessment Guide: Best
Practices for Developing and Managing Capital Program Costs,
[hyperlink, http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.:
Mar. 2009); Department of Homeland Security: Better Planning and
Assessment Needed to Improve Outcomes for Complex Service
Acquisitions, [hyperlink, http://www.gao.gov/products/GAO-08-263]
(Washington, D.C.: Apr. 22, 2008); and Homeland Security: Further
Action Needed to Promote Successful Use of Special DHS Acquisition
Authority, [hyperlink, http://www.gao.gov/products/GAO-05-136]
(Washington, D.C.: Dec. 15, 2005).
[5] Federal statute provides that under no circumstance may a contract
be entered into using noncompetitive procedures due to a lack of
advanced planning by contracting officials. 10 U.S.C. § 2304(f)(4)(A)
and 41 U.S.C. § 3304(e)(5)(A)(i).
[6] See WorldWide Language Resources, Inc.; SOS Int'l Ltd. B-296984.,
Nov. 14, 2005, 2005 CPD ¶ 206.
[7] See VSE Corp.; Johnson Control World Servs., B-290452.3, May 23,
2005, 2005 CPD ¶ 103.
[8] The HHS Acquisition Regulation states that written acquisition
plans are not required for actions such as: unsolicited proposals;
regulated utility services available from only one source; acquisition
of commercial items/services; and assisted acquisitions processed
pursuant to an interagency agreement. DHS guidance states that
acquisition plans are not required for acquisitions such as: emergency
acquisitions; actions which have already been included as part of an
approved plan such as exercise of options; and procurements conducted
under the Small Business Innovative Research Program. Per the NASA FAR
Supplement, acquisition plans are not required for acquisitions such
as: architect-engineering services; broad agency announcements or
unsolicited proposals; basic research from nonprofit organizations;
and utility services available from only one source.
[9] For the purposes of this report, "dollars awarded" is the total
value of the base and all options for contracts at the time of award.
The total value of the contract determines whether or not a contract
requires a written acquisition plan.
[10] FAR 7.104(c) requires the acquisition planner to coordinate and
obtain the concurrence of the contracting officer in all acquisition
planning.
[11] Effective October 1, 2010, the simplified acquisition threshold
for most acquisitions was increased from $100,000 to $150,000. 75 Fed.
Reg. 53,128 (Aug. 30, 2010). Two percent of the total dollar value of
contracts awarded by Centers for Disease Control and Prevention were
below the $500,000 threshold in fiscal year 2010.
[12] HHS, DHS, and NASA also have requirements for documentation of
annual acquisition forecasting, in addition to written acquisition
plans for individual contracts.
[13] USAID officials told us that program officials are responsible
for the development of implementation plans and that contracting
officials are not required to review them.
[14] DHS guidance exempts the following actions from requiring cost
estimates: acquisitions using simplified acquisition procedures;
modifications: (1) that are administrative, such as incremental
funding increases, (2) to exercise fixed-price options, (3) to resolve
cost overruns under cost reimbursement contracts; acquisitions for
commercial items; and those acquisitions for items which have prices
set by laws or regulations.
[15] At Goddard Space Flight Center, a cost estimate is generally
required for all acquisitions exceeding the micro-purchase threshold
of $3,000.
[16] In response to the bid protest, USAID took corrective action and
the protest was dismissed.
[17] Of 13 contracts we reviewed for which written acquisition plans
were required by agency policy, in 11 cases a written acquisition plan
was prepared. The Centers for Disease Control and Prevention awarded
the remaining two contracts, for which written acquisition plans were
required by agency policy but not prepared. HHS issued interim
guidance in October 2006 requiring written acquisition plans beginning
in February 2007, but the Centers for Disease Control and Prevention
did not implement this guidance until December 2008. A Centers for
Disease Control and Prevention procurement official explained that it
took time to implement the new requirements through policy and
training. In the interim period, the component's request for contracts
package was intended to document acquisition planning at the
individual contract level. The procurement official also explained
that the component has recently issued policy guidance that emphasizes
the use of written acquisition plans as required by HHS.
[18] Under time-and-materials contracts, payments to contractors are
based on the number of labor hours billed at a fixed hourly rate--
which includes wages, overhead, general and administrative expenses,
and profit--and the cost of materials if applicable. This type of
contract is considered high risk for the government because it
provides no positive profit incentive to the contractor for cost
control or labor efficiency. When a time-and-materials contract type
is selected, contracting officials are to document their determination
that it is not possible at the time of award to estimate accurately
the extent or duration of the work or to anticipate costs with any
reasonable degree of confidence. FAR 16.601.
[19] [hyperlink, http://www.gao.gov/products/GAO-09-3SP].
[20] In one of these cases, a USAID contract awarded to multiple
vendors for a total value of $750 million, a contracting official told
us he had filed all documents related to acquisition planning
separately from the contract file and could no longer locate this pre-
solicitation file, which may have included the cost estimate.
[21] In June 2011, DHS revised its acquisition planning guidance to
include a requirement that written acquisition plans document lessons
learned from previous acquisitions that impact the current acquisition
or provide a rationale for why historical information was not reviewed
to obtain lessons learned.
[22] [hyperlink, http://www.gao.gov/products/GAO-10-833].
[23] Federal Acquisition Regulation (FAR) 7.103, 7.104, and 7.105.
[24] See, for example, GAO, Defense Acquisitions: Status of DOD's
Implementation of Independent Management Reviews for Services
Acquisitions, [hyperlink, http://www.gao.gov/products/GAO-10-284]
(Washington, D.C.: Jan. 28, 2010); Defense Acquisitions: Further
Actions Needed to Address Weaknesses in DOD's Management of
Professional and Management Support Contracts, [hyperlink,
http://www.gao.gov/products/GAO-10-39] (Washington, D.C.: Nov. 20,
2009), and Defense Acquisitions: Tailored Approach Needed to Improve
Service Acquisition Outcomes, [hyperlink,
http://www.gao.gov/products/GAO-07-20] (Washington, D.C.: Nov. 9,
2006).
[25] FAR 7.103.
[26] Fiscal year 2009 was the most complete fiscal year data available
to us at the time we selected our cases.
[27] For detailed information about each contract we selected, see
appendix V.
[28] We chose two components at each agency with the exception of
USAID. We excluded acquisition offices at USAID overseas missions and
the contracts administered by those offices.
[29] While fiscal year 2009 data was used to identify agencies and
components for our review, we also chose contracts from fiscal year
2008 to ensure that we had a sufficient number of contracts to meet
our selection criteria. We excluded some agency components that did
not have at least three contracts that fit our selection of criteria
based on agency thresholds relating to acquisition planning review and
dollar value as described in this paragraph. Since USAID does not have
dollar thresholds for written acquisition plans, we based contract
selection tiers on thresholds set for approval by the agency contract
review board.
[End of section]
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