Acquisition Planning: Opportunities to Build Strong Foundations for Better Services Contracts
Highlights
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.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| U.S. Agency for International Development | 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. |
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.
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| U.S. Agency for International Development | 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. |
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.
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| U.S. Agency for International Development | 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. |
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.
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| Department of Homeland Security | 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. |
In 2011, DHS revised the acquisition planning chapter of the Homeland Security Acquisition Manual to require that lessons learned be documented to improve acquisition planning. In addition, effective November 2013, the chapter was revised to clearly define cost estimating as a critical step in acquisition planning and require the independent government cost estimate to be fully documented including detailed support.
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| Department of Health and Human Services | 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. |
In 2013, HHS issued a new acquisition planning guide with accompanying templates for written plans and cost estimates. The new guidance requires officials to provide a completed independent government cost estimate with the written acquisition plan using the templates provided. In addition, the acquisition planning guide states that written acquisition plans should provide relevant prior acquisition information, including previous contractors and performance problems, and the written acquisition plan template includes guidance to discuss the impact of prior acquisition as they relate to acquisition alternatives considered. Together, the new guidance makes clear what information should be documented regarding lessons learned from prior acquisitions in written acquisition plans.
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| U.S. Agency for International Development | 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. |
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 (IAP). The IAP template includes guidance on describing a statement of need, to include a review of potential acquisition alternatives -- and the impact of prior acquisitions on these alternatives -- to indicate the rationale for selecting the best acquisition method. 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.
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| U.S. Agency for International Development | 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. |
USAID is proposing a revision to their Agency Acquisition and Assistance Planning (ADS Chapter 300) that will collect information on pre-solicitation activities for competitive solicitations valued at $25 million and above for Washington and overseas missions. USAID would then use this information to establish an estimated time standard to conduct pre-solicitation acquisition planning activities for these components. Specifically, the proposed revision states that the pre-solicitation activities will be projected and recorded as part of the Global Acquisition and Assistance Milestones, and the dates will further be tracked and monitored as part of the acquisition's Milestone Plan.
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| Department of Homeland Security | 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. |
DHS did not concur with this recommendation and DHS officials explained in March 2014 that the agency does not plan to take steps to implement it.
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| Department of Health and Human Services | 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. |
HHS officials stated that their Acquisition Strategy Directive, which outlines the process for program managers to develop an Acquisition Strategy, meets the intent of our recommendation. We disagree. HHS is not currently collecting information about the timeframes needed for pre-solicitation acquisition planning activities to establish timeframes for when program officials should begin acquisition planning.
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| National Aeronautics and Space Administration | 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. |
In May 2014, NASA revised the acquisition planning guidance in its FAR supplement. The revised guidance specifies that written acquisition plans provide a history of the acquisition that includes the knowledge gained and lessons learned from prior or predecessor contracts to future refine acquisition requirements, strategies, and mitigate any issues in the follow-on acquisition. In addition, the revised guidance specifically requires that written acquisition plans include an independent government cost estimate that includes sources of estimates, assumptions, and supporting rationale.
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| National Aeronautics and Space Administration | 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. |
NASA provided information about a Baseline Service Assessment (BSA) for Procurement that was conducted this past year. NASA believes that a BSA initiative focusing on applying program management principles to all phases of an acquisition meets the intent of our recommendation. The goal of this initiative is to develop guidelines for each acquisition team to use when creating their milestone schedule. These schedules will be reported to cognizant centers and headquarters to ensure that barriers to timely completion are identified and resolved efficiently. NASA however is not collecting information about the timeframes needed for pre-solicitation acquisition activities as we recommended.
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