Acquisition Planning:

Opportunities to Build Strong Foundations for Better Services Contracts

GAO-11-672: Published: Aug 9, 2011. Publicly Released: Aug 9, 2011.

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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.

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.

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
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    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To promote improved acquisition planning, the Administrator of USAID should direct the Office of Acquisition and Assistance to establish requirements specifying dollar thresholds for when written plans should be developed, documented, and approved.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: USAID finalized their acquisition planning chapter on April 2, 2013. This chapter provides the Agency's policy directives, required procedures, and internal guidance for the planning of USAID direct Acquisition and Assistance (A&A) activities. This chapter applies to all actions awarded and administered by USAID Contracting Officers (COs) and Agreement Officers (AOs) from all funding sources. The new chapter requires an operating unit to identify a planner, who is responsible for preparing a written individual acquisition plan (IAP) for cost reimbursement, non-competitive, time and materials or labor hour acquisitions (including IDIQs/IQCs and task orders). When the procurement, including options is valued over $10 million, the planner must use the IAP template. When the total cost of the award, including any options, is less that $10 million, the use of the IAP Template is optional; however, the Planner must prepare a written IAP that complies with the required contents specified in FAR 7.105, as appropriate. The IAP must be approved one level above the Contracting Officer (CO) and the signed IAP must be sent to the CO along with the procurement request.

    Recommendation: To promote improved acquisition planning, the Administrator of USAID should direct the Office of Acquisition and Assistance establish standard acquisition plan formats that align with the FAR.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: USAID finalized their acquisition planning chapter on April 2, 2013. This chapter provides the Agency's policy directives, required procedures, and internal guidance for the planning of USAID direct Acquisition and Assistance (A&A) activities. This chapter applies to all actions awarded and administered by USAID Contracting Officers (COs) and Agreement Officers (AOs) from all funding sources. The new chapter requires an operating unit to identify a planner, who is responsible for preparing a written individual acquisition plan (IAP) for cost reimbursement, non-competitive, time and materials or labor hour acquisitions (including IDIQs/IQCs and task orders). When the procurement, including options is valued over $10 million, the planner must use the IAP template. When the total cost of the award, including any options, is less that $10 million, the use of the IAP Template is optional; however, the Planner must prepare a written IAP that complies with the required contents specified in FAR 7.105, as appropriate. The IAP must be approved one level above the Contracting Officer (CO) and the signed IAP must be sent to the CO along with the procurement request. Based on our review of USAID's acquisition plan template, it aligns with the FAR acquisition planning requirements.

    Recommendation: To promote improved acquisition planning, the Administrator of USAID should direct the Office of Acquisition and Assistance to develop templates and guidance to help program officials prepare reliable cost estimates.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: In response to our recommendation, in May 2012, USAID issued a guide and template to assist program officials, contracting officials, and others involved in acquisition planning in preparing independent government cost estimates.

    Recommendation: To take fuller advantage of important acquisition planning elements and to ensure that information is available for future use, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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.

    Agency Affected: Department of Homeland Security

    Status: Open

    Comments: According to DHS officials, the Office of the Chief Procurement Officer is drafting language that will be incorporated into the Homeland Security Acquisition Manual. This language will address both the role and documentation requirements for cost estimating in acquisition planning, and the role and documentation requirements for lessons learned in acquisition planning. DHS procurement officials estimate that this language will be incorporated into guidance by the end of July 2013.

    Recommendation: To take fuller advantage of important acquisition planning elements and to ensure that information is available for future use, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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.

    Agency Affected: Department of Health and Human Services

    Status: Open

    Comments: HHS is currently drafting a comprehensive acquisition planning guide that will include guidance on how to conduct all aspects of acquisition planning. In addition, the document will include links to a cost estimating guide, an individual acquisition plan, and several templates program offices can use to aid in developing required acquisition planning documents, including a template for an independent government estimate. In regards to lessons learned in acquisition planning, HHS officials noted that was not explicitly covered in their individual acquisition plan, or acquisition planning guide, and stated that the agency would revisit that requirement. HHS expects this guide to become a living document that the agency will be able to update as necessary. A final version is expected in 2013.

    Recommendation: To take fuller advantage of important acquisition planning elements and to ensure that information is available for future use, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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.

    Agency Affected: United States Agency for International Development

    Status: Open

    Comments: USAID finalized their acquisition planning chapter on April 2, 2013. The chapter contains a requirement for the operating unit to provide contracting officers with a government cost estimate as part of their request for contract/action. As part of this guidance, USAID has also developed and linked a cost estimate guidance and template to be used by planners as part of their Individual Acquisition Plan. In addition, USAID has included a Memorandum of Negotiation template. According to USAID, this document records the key elements of an acquisition award decision,including lessons learned. USAID officials explained that the Memorandum of Negotiation includes a history of the procurement process and documents it permanently so that any person working in an official capacity can read the document and know exactly why the award decision was made legitimizes who it was made to, serves to establish the reasonableness of the acquisition award, and as a permanent written account of the decisions made. While we believe the memorandum of negotiation and the current Individual Acquisition Plan template both touch on the technical and contractual history of an acquisition, it does not clearly require a discussion on lessons learned, including insights on the performance of the contract, and any issues the program may have encountered--as outlined in our report.

    Recommendation: To allow sufficient time for acquisition planning, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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 Affected: United States Agency for International Development

    Status: Open

    Comments: USAID officials noted that it has developed procurement action lead times. These times, however begin when the contracting officer has received and accepted a complete contract request, and do not take into account the time frames for when pre-solicitation planning activities take place at the program office-- which was the intent of our recommendation.

    Recommendation: To allow sufficient time for acquisition planning, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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 Affected: Department of Homeland Security

    Status: Open

    Comments: DHS officials told us that at this time the Office of the Chief Procurement Office (OCPO) position on this recommendation remains as a non-concur. However, the Chief Procurement Officer has recently reached out to the Program Accountability and Risk Management (PARM) organization within DHS so that this recommendation may be given additional consideration.

    Recommendation: To allow sufficient time for acquisition planning, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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 Affected: Department of Health and Human Services

    Status: Open

    Comments: HHS officials noted that it has not collected information on timeframes needed for pre-solicitation acquisition planning activities. HHS acquisition officials explained that their upcoming acquisition planning guide states that acquisition planning should begin as soon as the need is identified, and delineates roles and responsibilities for all those involved in the acquisition planning process. HHS officials believe that their upcoming guidance will address issues in determining when program offices should begin acquisition planning. As we reported, however, acquisition planning lead times are critical in informing program officials when to begin developing key acquisition planning documents, thus avoiding or minimizing the likelihood of poorly prepared documents and program delays.

    Recommendation: To take fuller advantage of important acquisition planning elements and to ensure that information is available for future use, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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.

    Agency Affected: National Aeronautics and Space Administration

    Status: Open

    Comments: NASA concurred with our recommendation and indicated that it has enhanced the use of lessons learned from earlier contract actions, particularly through its Source Evaluation Board activities related to source selection. However, source selection occurs after the acquisition planning phase ends when the solicitation is published, as defined in our report. NASA officials stated that the agency is currently revising the NASA FAR supplement and plans to include a requirement for acquisition planners to specifically address any lessons learned from prior acquisitions in the consideration of follow-on efforts. In addition, officials said that NASA plans to include a requirement that the rationale for cost estimates be fully supported and documented to include assumptions and sources for cost estimates used in acquisition plans. NASA expects revisions to their FAR supplement at the end of the calendar year.

    Recommendation: To allow sufficient time for acquisition planning, the Secretaries of HHS and DHS and the Administrators of NASA and USAID should 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 Affected: National Aeronautics and Space Administration

    Status: Open

    Comments: NASA officials told us that NASA Headquarters continues to track and collect information related to pre-solicitation acquisition planning activities through the Master Buy Plan Database (MBPD) tool. In addition, a new procurement initiative to analyze the timeframes for all acquisition planning from pre-solicitation to contract award is being stood up by the Assistant Administrator for Procurement. This initiative, according to officials, will involve all NASA centers and is expected to result in reduced lead times for procurement milestones in the future.

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