Basics of the Federal Acquisition Regulation

The goal of any government purchase or contract is to obtain a product that meets an agency’s needs effectively for the most affordable price. To ensure that the competition is fair and that the best product is selected, Federal Agencies must follow an acquisition process governed by the Federal Acquisition Regulation (FAR).

The FAR is hundreds of pages in length. However, it isn’t as complex as it may appear upon first glance. The IBM Center for the Business of Government has published A Guide for Agency Leaders on Federal Acquisition, which summarizes key components of the FAR and the governing regulatory architecture.

Agencies should keep in mind that at a high-level, the FAR is:

  • Flexible – All Federal Agencies are permitted to issue FAR supplements tailored to their specific needs.
  • Subject to review and approval – The Office of Federal Procurement Policy must review and approve any supplements to the FAR.
  • Under the jurisdiction of the Government Accountability Office and Inspectors General – The GAO investigates and evaluates procurement practice. This organization also serves as intermediary during bid protests.

Three Phases of Federal Acquisition

  • Pre-Award Phase – During this phase, the product’s characteristics are identified, the market is assessed and regulatory guidance for product solicitation is reviewed.
  • Award Phase – The award phase involves soliciting the product, evaluating proposals and negotiating with vendors.
  • Post-Award Phase – During this phase, contracts are executed, the product is evaluated and the vendor receives compensation. Contracts may also be terminated, renewed or negotiated.

Pre-Award Phase Key Action Points

The pre-award phase begins when program personnel identify the need for a specific product based on a program objective. Once a need has been identified, program personnel inform procurement personnel; these may include contract specialists or government buyers.

In order to ensure that an appropriate product is procured with the best outcomes for the Government, procurement personnel should:

  • Create requirement definitions that are accurate and specific. Requirement definitions should include the desired product design, specifications and functions.
  • Focus on the mission goals, as opposed to administrative compliance. Specifications should be created in accordance with program goals and objectives. Non-essential administrative specifications should be avoided.
  • Facilitate a competitive bidding process. Multiple suppliers should be encouraged to bid for the job.
  • Prepare and post a Request for Proposal. Procurement personnel should release a Request for Proposal that includes all of the relevant information about procurement, including the formal of proposals, evaluation criteria and due dates.
  • Simplify the application and execution process as much as possible for vendors. In some cases, agencies impose too many administrative requirements on vendors during the bidding and execution process. Procurement personnel should actively avoid any requirements that do not directly contribute to the objectives of the program.
  • Categorize products as simple or complex. Simple products are those that are easy to describe, produce and price. Complex products are those that are difficult to describe, produce and price. When products are simple, the agency should use the LPTA method. When products are complex, the tradeoff method should be used.

Award Phase Key Action Points

After all proposals are submitted and the due date passes, the award phase begins. Three basic criteria in proposal evaluation are cost, schedule and performance.

  • Evaluate cost. Evaluators should compare cost proposals against market data, as well as against each other.
  • Evaluate schedule. Proposals will identify periods of service or a specific delivery date. Vendors who have a history with the agency can also be evaluated based on past punctuality.
  • Evaluate performance. Procurement personnel should evaluate the bidders’ production plans and product specifications. For complex products, third-party evaluators, such as program staff, may participate.
  • Target the best value. Procurement personnel should choose the vendor that provides the most overall benefit. Depending on the product, the vendor that offers the most overall benefit may be the one who offers the product for the lowest price technically acceptable, or LPTA, or it may be the one who offers the best tradeoff value. Under the LPTA method, the vendor chosen will be the one who agrees to provide a product that meets requirements for the lowest cost. Under the tradeoff method, the vendor chosen will be the one who offers the best balance of cost, performance and schedule.

Post-Award Phase Key Action Points

After a vendor has been selected, the contract is executed and the Post-Award Phase begins.

  • Award contract. The successful Offeror is presented with the executed contract. If the award is different than the most recent signed proposal, then both parties must sign the amended award.
  • Debrief as per requests. At the request of Offerors not selected for award, the Government will debrief Offerors and provide the basis for the selection decision and the award.
  • Contract execution and ongoing maintenance. The contract is executed and procurement personnel conduct ongoing monitoring of contract deliverables and evaluation of performance.

Up-front acquisition planning and contract development results in product delivery to the Government to meet mission objectives. Well-developed specifications, bidding processes and proposal evaluations are the cornerstones of procurement value for the Government under the Federal Acquisition Regulation.

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