FAR Part 7 Acquisition Planning

1. FAR Part 7Acquisition Planning Policies and procedures for developing acquisition plans; determining whether to use commercial or Government resources; whether it is more economical to lease or purchase equipment; and whether functions are inherently governmental

2. Subpart 7.1 -- Acquisition Plans • Acquisition planning should begin as soon as the need is identified. • Form a team (contracting, legal and technical). • Review previous plans for similar acquisitions and discuss the lessons learned. • Coordinate with the cognizant competition advocate if it uses other than full and open competition. • Avoid issuing requirements that restrict competition and/or increases prices. • Nominate and designate a COR.

3. Subpart 7.1 -- Acquisition Plans • Agencies shall perform acquisition planning, conduct market research and select the appropriate contract type for all acquisitions to promote/provide: • Acquisition of commercial items; and • Full and open competition or to obtain competition to the maximum extent practicable.

4. Subpart 7.1 -- Acquisition Plans • Avoid issuing requirements on an urgent basis or with unrealistic delivery or performance schedules because it restricts competition and increases prices. • The acquisition strategy shall be coordinated with the cognizant small business specialist if the estimated contract is: • $8M or > for DOD; • $6M or > for NASA, GSA, DOE; and • $2.5M or > for all other agencies. Contents of Written Acquisition Plans: • Identify milestones at which decisions should be made and address considerations that will control the acquisition. Content will vary but may include: (see next slide)

5. Contents of Written Acquisition Plans Acquisition background and objectives :  • Statement of need, history, and potential alternatives. • Applicable conditions, and capabilities. • Cost and cost concepts used (life-cycle cost, design-to-cost). • Delivery or performance-period requirements. • Consequences of trade-offs and risks. Plan of action: • Identify prospective sources and the impact of bundling. • Describe how competition will be sought, promoted and sustained. • Contract type and source-selection procedures. • Acquisition considerations (multi-year contract, options, deviations) • Contractor vsGovt performance & inherently governmental functions. • Make or buy decisions, and security considerations • Government-furnished property and information • Milestones (SOW, specs & requirements, issuance of synopsis & solicitation, evaluation of proposals, negotiations, award).

6. 7.106 - Additional Requirements for Major Systems • Offerors shall incorporate items currently available; and items that can be acquired competitively during the system’s service life. • Offerors shall identify opportunities to competitively obtain required items during the life of the system and provide the right to use technical data for competitive future acquisitions (at a specified cost).

7. 7.107 – Additional Requirements for Acquisitions Involving Bundling. • Market research must be conducted to determine whether bundling is necessary and justified and would derive measurably substantial benefits as it limits/impedes small business competition. • Benefits must be equivalent to 10% of the estimated contract if the contract is <$94M; or 5% or $9.4M (whichever is greater), if >$94M.

8. 7.107 – Additional Requirements for Acquisitions Involving Bundling. • Bundling may be necessary even when the expected benefits do not meet the thresholds (previous slide) but are critical to the agency’s mission success. • When a contract has substantial bundling, the acquisition plan must identify the benefits ($); ways competition was promoted to small business concerns; strategies to reduce bundling, and the rationale for not choosing those alternatives. A contract is consider to have substantial bundling when it is greater than: • $8M for DOD; • $6M NASA, GSA or DOE; and • $2.5M for all others) then:

9. Subpart 7.2 - Planning for the Purchase of Supplies in Economic Quantities • Procure items in quantities that result in the greatest cost benefit (not to exceed required qty). • Offeror must state whether the quantity is economically advantageous or if they recommend a different quantity. • Action should only be taken if there is a potential for significant savings. The CO shall consult with the requirements developer before proceeding. If they agree with the offeror, the solicitation should be amended or canceled.

10. Subpart 7.3 -- Contractor Versus Government Performance • The Government must perform inherently governmental activities with Government personnel; and subject commercial activities to the forces of competition. • The agency shall give appropriate cost consideration when deciding between agency and contractor performance.

11. Subpart 7.4 -- Equipment Lease or Purchase (initial acquisition and renewal) Considerations to make when deciding to lease or purchase • Length of time and extent of use of equipment. • Financial and operating advantages of alternative types and makes of equipment. • Cumulative rental payments vs net purchase price. • Transportation, installation, maintenance and other costs. • Potential obsolescence because of imminent technological improvements. • Trade-in or salvage value, later use by other agencies, and imputed interest.

12. Subpart 7.4 -- Equipment Lease or Purchase (initial acquisition and renewal) 7.402 - Acquisition Methods. • Purchase method. Do not rule out purchasing even if there are technological advances. • Lease method may serve as an interim measure when immediate use is required. A lease with option to purchase is preferable. 7.403 – General Service Administration Assistance: assist in decision by providing information such as: • Pending price adjustments to Federal Supply Schedule contracts; • Recent or imminent technological developments; • New techniques and industry or market trends.

13. Subpart 7.5 - Inherently Governmental Functions • Applies to all contracts for services, but does not apply to services obtained through personnel appointments, advisory committees, or personal services contracts issued under statutory authority. • Contracts shall not be used for the performance of inherently governmental functions. • As a rule of thumb, contracts are inherently governmental when it results is the direct conduct, control, or command of an event/decision. It also includes functions that involve determinations, approval or policy decisions. • The functions that are not inherently governmental involve work that is advisory, provides recommendation, or analysis.