Acquisition Planning:
Opportunities to Build Strong Foundations for Better Services Contracts
GAO-11-672, 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.
Status Legend:
- Review Pending
- 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: Open
Comments: In November 2011, USAID launched a worldwide acquisition and assistance plan for all actions above $150,000 to gain an agency-wide view of all planned actions for the year. In response to our recommendation, agency officials explained that USAID has drafted guidance that will establish a specific dollar threshold for requiring written individual acquisition plans, as required by the FAR, that is expected to be finalized by December 2012.
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: Open
Comments: In response to our recommendation, USAID officials stated that the agency is in the process of developing a new chapter in its guidance entitled "Acquisition and Assistance Planning." They expect the guidance to include acquisition plan formats that will be aligned with the FAR and to be finalized by December 2012.
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: DHS concurred with our recommendation and revised the DHS acquisition manual to add a new requirement for including a discussion of lessons learned from previous acquisitions in written acquisition plans. However, the department has not yet taken steps to clearly define the role of cost estimating in acquisition planning, as opposed to the use of cost estimates more generally and in other parts of the acquisition process. DHS officials stated that they plan to make additional revisions to the DHS acquisition manual by the end of 2012 to reiterate that cost estimating, including the rationale and assumptions used in deriving the estimate, is an important step during the acquisition planning stage. Further, officials said they intend to add a reference in the acquisition manual to the FAR requirements for the cost sections that should be included in the acquisition plan.
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 officials said the department plans to update its acquisition plan framework, effective October 1, 2012, to incorporate cost estimating functions and related documentation required. They also said the department has developed a cost estimate tool to assist the acquisition workforce in the development of valid cost estimates. However, HHS officials did not identify plans to ensure that agency and component guidance incorporates lessons learned in acquisition planning.
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: 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. In addition, in December 2011, USAID revised its project design guidance to incorporate reviewing lessons learned and cost information. However, the project design guidance does not clearly define the role of cost estimating and lessons learned in acquisition planning, and USAID has not yet established specific requirements for what should be documented in incorporating these elements in the contract file. USAID officials stated that the agency is in the process of developing a new chapter in its guidance entitled "Acquisition and Assistance Planning" which they expect to be finalized by December 2012.
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: In response to our recommendation, effective October 2012, USAID program officials will be required to inform contracting officials of key planning dates, such as when the statement of work and cost estimate will be provided, so that the contracting officials can capture these dates in the acquisition data system to be incorporated in procurement lead times. However, USAID has not yet established time frames for when program officials should begin acquisition planning.
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 did not concur with our recommendation and has taken no actions to implement it. DHS commented 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.
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 said the department plans to direct contracting activities to collect information on the timeframes necessary for acquisition planning and establish broad HHS-wide acquisition planning timeframes that will show when program officials should begin acquisition planning. However, officials did not indicate when this effort would be complete.
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.
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 partially concurred with our recommendation. NASA noted that its Master Buy Plan Database is an acquisition planning tool that allows for the measurement of procurement actions against planned dates for pre-award activities. NASA further stated that the agency will continue to collect, assess, and monitor actual milestone data and compare it against planned timeframes, but does not believe established time frames must be used for acquisition planning since time frames will differ across programs. However, as we reported, 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. The time needed for pre-solicitation activities varies depending on the complexity and dollar value of the contract, and NASA's Master Buy Plan Database only captures selected high-dollar value procurement actions.