CANCELLED BY PN 04-16
February 27, 2001
GUIDANCE FOR HEADQUARTERS ACQUISITION STRATEGY MEETINGS
PURPOSE: To clarify the acquisition planning process for major procurements subject to the Master Buy Plan that require Headquarters approval.
BACKGROUND: Acquisition planning should begin as soon as the need is identified. The acquisition plan should address all technical, business, management, and other significant considerations necessary to manage the acquisition. For major acquisitions subject to the Master Buy Plan that require Headquarters approval, NASA has decided that an acquisition strategy meeting (ASM) shall be used instead of a written plan.
The following observations and issues have been noted regarding ASMs conducted at Headquarters--
1. A nearly universal observation is that the entire acquisition planning process works more smoothly when coordination among the cognizant parties occurs early and often. The ASM is intended to be interactive, with participants who are empowered to make necessary strategic decisions at the meeting. Numerous Headquarters offices in addition to the Office of Procurement, such as the Office of General Counsel (Code G), the Office of Management Systems (Code J), the Office of Small and Disadvantaged Business Utilization (Code K), the Office of Safety and Mission Assurance (Code Q), and the Enterprise Offices, are involved in the development of acquisition strategy. The ASM is intended to reflect the considered opinions of senior management participants based on a thorough analysis and thoughtful consideration of the facts at hand.
2. The ASM is a collaborative effort. Effective Center coordination with the cognizant Headquarters Code HS procurement analyst and early submission of preliminary presentation charts will enable Headquarters participants in the ASM process to review the preliminary presentation charts as soon as practicable and provide feedback to the Centers prior to the ASM.
3. There is concern that some issues are not addressed sufficiently during the ASM, or that issues surface afterward that require extensive effort to resolve. When this situation occurs, the benefit of interaction is lost and the resolution may be lengthy in the attempt to achieve long-distance consensus with the parties involved.
4. Several issues have surfaced related to the form and content of ASM presentation charts. ASM presentation charts are not merely briefing charts; rather, they are standalone charts that should be sufficiently complete to document the Center's acquisition strategy. It is important that the presentation charts themselves set the stage for telling the story. They should identify up front exactly what we are buying and why.
5. Effective coordination is necessary if Centers intend to request approval of deviations as part of the ASM process. NFS 1807.103(d)(v) states that "approval of an acquisition plan does not constitute approval of any special conditions, or special clauses that may be required unless the plan so specifies, and the individual having approval authority is a signatory of the plan."
6. NASA Headquarters conducted an assessment of NASA's implementation of Performance-Based Contracting (PBC) in late 1999 and early 2000. The PBC assessment team's final report can be found at the following URL: http://ec.msfc.nasa.gov/hq/library/PBC.Team.Rpt.html.
The report recommended that the Office of Procurement review the acquisition planning process to ensure that an analysis of the planned contract surveillance, an analysis of the PBC/non-PBC decision and the types of performance requirements and related performance standards that will be used if PBC, and the level of the contract work breakdown structure (WBS) are presented as part of the ASM, or subsequent to the ASM, as necessary. In addition, the PBC assessment report recommended that the ASM address the consistent relationship among the acquisition's performance requirements, performance standards, fee plan (if applicable), and surveillance plan.
The report further noted that it appeared that cost reimbursement contract types were sometimes selected for acquisition strategies to facilitate funding flexibility rather than to mitigate or manage cost performance risk. Furthermore, contractors working under cost reimbursement contracts that contained cost incentives reported that they were vulnerable to the effects of funding volatility. Should a funding fluctuation occur, the potential overrun or underrun could result in a fee loss or gain due to causes beyond the contractor's control - in effect providing no incentive. As a result, the PBC assessment team recommended that the need to apply cost incentives appropriately and to select contract type relative to cost risk be reinforced.
7. FAR 7.105(a)(7) requires discussion of risks during the acquisition planning process. NASA's final rule, which became effective November 22, 2000 requires more extensive discussion in the ASM of project and program risks related to such considerations as technical, schedule, cost, safety and security, foreign involvement, technology transfer, and resources. Decisions relative to acceptance, mitigation tracking, and research of potential risks are to be discussed in the ASM, along with sufficient supporting detail.
8. NPG 5000.1, Establishing a Science and Research Institute, states that Science and Research Institute acquisitions are subject to NASA's Master Buy Plan procedures regardless of value.
1. Center personnel should hold Headquarters ASMs as early in the planning process as possible to encourage maximum input from senior management participants. Early meetings encourage maximum input from interested parties because all participants are working all options before any options have been foreclosed by earlier deliberations and some parties to the process have a vested interest in defending or championing one approach or option over the possible approaches/options. If the meetings are held earlier in the process, some issues will not be resolved. However, the Center should be able to clearly define the issues and describe the possible choices as well as the thought processes and methodology involved in the planning process.
2. Center personnel are reminded to submit acceptable ASM presentation charts to the cognizant Headquarters Code HS procurement analyst at least two weeks in advance of the meeting. Otherwise, the meeting may be postponed to give Headquarters representatives sufficient time to review the charts and provide feedback.
3. Center personnel are reminded to coordinate issues well in advance with affected Headquarters codes because the ASM is the appropriate forum in which acquisition strategy issues should be resolved. If issues are raised that cannot be resolved during the meeting, then action items should be recorded appropriately in the minutes with a designated action officer and suspense date.
4. All elements required by NFS 1807.105 should be addressed in the presentation charts, in sufficient detail that the Center's approach is clear. Center personnel are reminded to review the online Guide for Successful Headquarters Acquisition Strategy Meetings (ASMs) prior to preparing the ASM presentation charts to ensure that all required elements have been addressed in sufficient detail. Required elements that do not apply to a particular procurement should be identified and summarized on a back-up chart along with the reason why they are not applicable. The online Guide can be found at the following URL: http://ec.msfc.nasa.gov/hq/library/ASMs.html
5. The level of documentation for a deviation depends to a large extent on the nature of the deviation request. If the requested deviation is fairly straightforward, with clear justification, then it is probably sufficient to describe the request in the ASM presentation charts. If the request is more complex or involves other Headquarters offices (e.g., the Office of Safety and Mission Assurance), then the Center should submit the appropriate justification, including proposed deviation language, through Code HS in advance so that outstanding issues can be worked in advance of the meeting. Regardless of type of deviation, Center personnel who plan to request that deviations be approved during the ASM should coordinate with the cognizant Headquarters Code HS procurement analyst and ensure that all preliminary review, including legal review at the Center and Headquarters, has been accomplished prior to the meeting. Centers should be mindful, however, that there is no requirement to submit deviations for approval during the ASM itself. If schedules allow, Centers can submit the deviation request package prior to the ASM, or identify the potential deviation requirement in the ASM presentation charts and submit the request and appropriate documentation subsequently.
6. Center personnel involved in the ASM process should carefully review the potential PBC aspects of the proposed acquisition to ensure that the acquisition approach agreed to and documented in the ASM charts reflects PBC to the extent considered appropriate for the particular acquisition. NFS 1807.170 requires that all acquisition plan topics and structure specified in NFS 1807.105 be presented during the ASM. In addition, NFS 1807.105(b)(6) requires that acquisition plans specifically address the applicability of performance-based requirement descriptions. FAR 37.601 addresses the general policies and procedures for use of PBC, including requirements, measurable performance standards, quality assurance surveillance plans, fee reductions, and performance incentives. Center personnel are reminded to examine the relationship among these PBC elements during the acquisition planning process. The extent to which this relationship will be established and maintained should be reflected in the ASM presentation charts, or documented subsequently in the file, as appropriate.
A discussion of contract type considerations is required in ASM's (FAR 7.105(b)(4)). When determining the contract type for an acquisition, Contracting Officers are reminded that the objective is to negotiate a contract type and price (or estimated cost and fee) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical performance risk. Cost-reimbursement contract types should not be selected just to ensure funding flexibility. As stated in FAR 16.301-2, cost-reimbursement contracts are suitable for use only when uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract.
Contracting Officers are also reminded that when an incentive contract is used, the planned incentive and the anticipated effects must be discussed during the ASM (NFS 1807.105(b)(4)(A)). The probability and impact of funding fluctuations should be discussed when cost incentives are considered.
7. Center personnel are reminded of the requirement in FAR 7.105(a)(7) to discuss risks during the acquisition planning process. The Office of Safety and Mission Assurance has supplied several templates to facilitate R-BAM consideration by Center personnel, including the risk wheel, the major risk matrix, and the acquisition stoplight chart, which are available online at the following URL: http://www.grc.nasa.gov/WWW/spaceiso/rbam/docs/overview.ppt.
8. Center employees are reminded of the NPG 5000.1 requirement that Science and Research Institute acquisitions are subject to NASA's Master Buy Plan procedures regardless of value.
EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until canceled or superseded.
HEADQUARTERS CONTACT: Rebecca Barth, Code HS, (202) 358-1534; email email@example.com.
R. Scott Thompson
Director, Contract Management Division