Procurement Competition

Pentagon Procurement and Acquisition Policy Director Shay Assad this week is seeking to amplify guidance he sent out last November on improving competition in defense purchases.

As Inside the Pentagon reported in December:

The Nov. 24 memo from Shay Assad, the Pentagon's director of defense procurement and acquisition policy, provides additional instructions for competitive situations in which only one offer is received. Assad's memo to the services, defense agencies, U.S. Special Operations Command and U.S. Transportation Command expands on Pentagon acquisition chief Ashton Carter's Sept. 14 guidance on boosting the department's buying power.

"The intent of this guidance is to ensure more effective competition that will result in more effective use of the department's resources and savings for the taxpayer," Assad writes.

To maximize the savings that are obtained through competition, contracting officers will no longer use the standard on obtaining certified cost or pricing data in Federal Acquisition Regulations to determine that the offered price is based on adequate competition when only one offer is received, according to the memo.

In a memo released yesterday, though, Assad writes:

The focus of my memorandum was on maximizing competition in situations where only one offer is received in a procurement utilizing competitive procedures. The purpose of this memorandum is to amplify that guidance in response to questions that have been raised.

The policy guidance set out in the November 24, 2010, memorandum is applicable to all competitive procurements 0f supplies and services above the Simplified Acquisition Threshold (SAT), including commercial items and construction. Further, it covers procurements accomplished under the procedures in Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Supplement (DFARS) parts/subparts 8.4, 12, 13.5, 14, 15, and 16.5. Exceptions to this policy are procurements in support of emergency acquisitions for contingency operations, humanitarian assistance, disaster relief, peacekeeping operations, or recovery from nuclear, biological, chemical or radiological attacks against the United States. However, the use of these exceptions does not mitigate the need for competition nor the requirement for a determination that the price is fair and reasonable.

Unless an exception applies or a waiver is granted, the following procedures apply:

* If the solicitation was advertised for fewer than 30 days and only one offer is received, then the contracting officer shall cancel and resolicit for an additional period of at least 30 days; or

* If a solicitiation allowed at least 30 days for receipt of offers and only one offer was received, then the contracting officer shall not depend on the standard at FAR 15.403-1(c)(ii) in determining the price to be fair and reasonable. Rather, the contracting officer shall use price or cost analysis in accordance with FAR 15.404-1 to make that determination. If the contracting officer believes that it is necessary to enter into negotiations with an offeror, the basis for these negotiations shall be either certified cost or pricing data or data other than certified cost or pricing data, as appropriate, in accordance with FAR 15.403-1(c). DFARS 215-403-1(c) and FAR 15.403-3(b). The negotiated price should not exceed the offered price.

Waivers to the policy requirement to resolicit or the requirement to conduct negotiations are permitted. The waiver authority is the Head of the Contracting Activity (HCA). However, the HCA may delegate this authority to not lower than one level above the contracting officer.

I realize that implementation of this policy may have the unintended consequence of increasing the contracting community's workload, but given today's scarcity of resources we need to ensure effective competition to the maximum extent possible. Every dollar saved through effective competition benefits the warfighter and the taxpayers.