FedSubK Feature: The Acquisition Lifecycle of Service Contracts - Phase 3 Contract Administration & Closeout
Updated: May 4, 2024
This month we end our three-part series on the acquisition lifecycle of service contracts with an overview of the third and last phase, Contract Administration and Closeout (or “Post Award” Phase). (NOTE: Find Part 1 here and Part 2 here.)
As before, we will talk about each subactivity in this phase but first, let’s review the lifecycle of a typical Federal services contract valued over the Simplified Acquisition Threshold (or “SAT,” presently $250,000).
Figure 1 – Acquisition Lifecycle
You’ve been selected as the awardee of a Federal contract! Congratulations! All that hard work paid off. But the fun isn’t over yet.
To see that pay out, you’ve got to perform. Yes, now you must back up that proposal by providing stellar performance of the requirements. That means providing the personnel promised in the proposal (i.e., Key Personnel), the deliverables necessary to begin performance, and continue building the relationship with your Federal client.
Contract Administration & Closeout (Post Award)
The Contract Administration and Closeout (Post Award) phase is where performance begins with the successful offeror now a Federal Prime Contractor (or “Prime”). The Government and Prime work together to ensure the performance, compliance, and reporting requirements are met and the end user receives the products and/or services required. Tasks are primarily performed by the Prime with Government oversight, acceptance, and performance evaluation.
Tasks in this phase are:
Figure 2 – Steps in the Contract Administration & Closeout (Post Award) Phase
Legend: I = Integrated Project Team, P = Project Management Office / Requestor, and A = Acquisition Office
These tasks will culminate in a completed contract and closeout under which the Government and Prime agree that all deliverables (products or services) have been received, are acceptable, meet inspection criteria, and no further monies are due to the Prime or Government.
Key tasks in this phase and their impacts on the Prime are:
Kick Off Meeting (or “Post Award Conference”) (FAR Subpart 42.503)
The Kick Off Meeting is where contract administration planning and performance planning take place and a post award orientation meeting is conducted between the Prime and the Government. The CO/KO typically determines if and when a Kick Off Meeting is needed. The CO/KO will arrange the time and place, create the agenda, act as the meeting chair (or designate one), brief Government personnel before the meeting, and prepare a summary report of the meeting.
It is not the purpose of the meeting to change the contract. However, the Contracting Officer (CO/KO) may make commitments or give directions within the scope the CO’s/KO’s authority and the contract. The CO/KO must execute a formal written modification before the Prime takes action on such changes. If the chair is not the CO/KO, the chair is not authorized to commit the Government to any changes that impact scope, schedule, or price.
Often on large extraordinarily complex contracts, partnership agreements are developed and partnership meetings between the parties are held. Schedules and processes are agreed to for assurances that a positive relationship continues between the Government and Prime and to lay out how performance issues will be handled and escalated for resolution between the parties. For smaller contracts, a post award letter may be sufficient to outline requirements for communications and submission of deliverables if not already called out in the contract scope, terms, and/or conditions.
Subcontractors do not typically attend the Kick Off Meeting (Post Award Conference) between the Prime and the Government since the Government has no privity of contract with Subcontractors and vice versa. This is also when the Prime’s agreements with their subcontractor should be solidified if not done so already (NOTE: Primes can determine the clauses that flow down to their subcontractors from the solicitation document; little if anything will change in terms of clauses short of a new law or national initiative like a telecommunications ban, TikTok prohibition, or minimum wage increase (as we’ve seen in recent years).
The Prime may ask Government representatives attend the Prime/Subcontractor Kick Off Meeting and Government personnel may attend provided they: (1) remember the limitations in privity of contract, (2) take no action that alters a subcontract, and (3) ensure any changes that may impact the Prime contract with the Government are documented and reported to the CO/KO for further discussions with the Prime and resolution.
Quality Assurance (FAR Part 46)
The Government performs quality assurance through inspection/acceptance, documentation of past performance, monitoring the Prime’s subcontracting plan (if applicable), and coordinates on performance issues and set procedures to remedy any less than satisfactory performance.
Contract clauses for inspection and acceptance of services will be found in Part I, Section E of the solicitation under UCF. For fixed-priced contracts, FAR clause 52.246-4 Inspection of Services - Fixed-Price, requires that the contractor provide and maintain an inspection system acceptable to the Government covering the services under the contract. Other inspection and acceptance clauses exist for other types of contracts (see FAR Subpart 46.3). The Government has the right to always inspect and test all services and places during contract performance. FAR clause 52.246-4 specifically reserves the Government’s right to require reperformance by the Prime for nonconforming services at no cost or reduce the contract price if reduced services result in reduced value. It also puts the Prime on notice that if it fails to promptly perform the services again or to take the necessary action to ensure future performance is in conformance with the contract, the Government may have the serviced performed by others and charge the Prime for any costs incurred related to performance or terminate the contract for default.
Contracts for Commercial Products and Commercial Services
When acquiring commercial products under FAR Part 12, the Government relies on the Contractors' existing quality assurance systems as a substitute for Government inspection and testing before tender for acceptance, unless customary market practices for the commercial product being acquired include in-process inspection. Any in-process inspection by the Government is conducted in a manner consistent with commercial practice.
The Government relies on the Contractor to accomplish all inspection and testing needed to ensure that commercial services acquired conform to contract requirements before they are tendered to the Government.
Contracts aren’t without their share of “administrivia” type tasks. One of those tasks that is most important to the Prime is getting payments.
Payments and Accounting
Invoices must be submitted using the formats required by the Government, if applicable, and may sometimes be submitted electronically via an agency’s/organization’s financial system (i.e., Wide Area Work Flow (WAWF) for DoD, Corps of Engineers Financial Management System (CEFMS), or Vendor Inquiry Payment Electronic Reporting System (VIPERS) to name a few).
This step is CRUCIAL during performance; it is where you want to know your game plan and have your “A-Team” on the job. Why? Because delays in payment mean delays in getting capital to continue performance, pay subcontractors, order supplies, etc.
How often do you invoice? As often as the contract allows. They could be monthly for recurring monthly services, but most often is upon completion of task or deliverable as outlined in the deliverables and/or payment schedule. Other than Firm Fixed Price services may require that you also track costs and bill (and/or provided supporting documentation) in the form of hourly rates, hours expended, or agreed upon work breakdown structures (WBS) down to a specific level, depending on the type of contract (i.e., cost reimbursement, time-and-materials, or labor-hour).
The Government can turn away any invoice that is not considered a “proper” invoice (see FAR Subpart 32.905), meaning accurate, current, and complete with all information required by the agency to be submitted using the format they require (when indicated). Any delay pushes your payment back in the billing / accounts payable process. And when the delay in payment is because of the Prime’s error, there is no prompt payment interest involved (watch for a future FedSubK Feature on Prompt Payment coming in the May edition of FedSubK NOW!).
As mentioned, on complex type service contracts (i.e., cost, time-and-material, or labor-hour) you may have to track, segregate, and report hours, hourly rates, and total costs by line item and accounting string in your invoices or in attachments to support your invoice.
Modifications
Modifications ( sometimes referred to as "change orders") are issued when changes are needed as part of performance due to unforeseen circumstances, changes in conditions or assumptions, and mandatory statutory requirements come into effect. Contracting modifications are issued formally in writing by the Contracting Officer and are typically bilateral in nature, meaning the Prime must first sign the modification before the Contracting Officer signs. However, administrative modifications and modifications based on terms and conditions of the contract may be issued unilaterally, or with only the Contracting Officer’s signature.
Exercising Options
Options exercise the Government’s right to purchase more products or services at a pre-agreed pricing, extend services, or term the term of the contract. In the case of options, the Contracting Officer must supply written notice to the Prime of the Government’s intent to exercise an option within the period specified in the contract.
Options may only be exercised after a determination that all the following apply:
- Funds are available.
- The requirement covered by the option fulfills an existing Government need.
- The exercise of the option is the most advantageous method of fulfilling the
- government’s need, price and other factors considered.
- The option was synopsized per FAR Part 5 unless otherwise exempted.
- The contractor does not have an active exclusion record in SAM.gov (see FAR 9.405-1).
- The contractor’s past performance evaluations on other contract actions have been considered.
- The contractor’s performance on this contract has been acceptable, e.g., received satisfactory ratings.
After considering price and other factors, the Government must make a written determination that exercise of the option is in its best interest based on one of the following:
- A new solicitation would fail to produce a better price or a more advantageous offer than that offered by the option.
- An informal analysis of prices or an examination of the market shows that the option price is better than prices available in the market.
- The time between the award of the contract containing the option and the exercise of the option is so short that it indicates the option price is the lowest price obtainable or the more advantageous offer, considering market stability and comparison of the time since award with the usual duration of contracts for such supplies or services.
Other factors to be considered include the Government’s need for continuity of operations and potential costs of disrupting operations and the effect on small business.
There are two types of options that can extend the life of a contract. They are:
Option to Extend Services
As prescribed in FAR clause 52.217-8 of the same name, the Government may require continued performance of any services within the limits and at the rates specified in the contract (unless revisions are required to meet Department of Labor prevailing rates). This option may be exercised more than once, but the total extension of performance cannot exceed 6 months. The Prime must receive written notice of the Government’s intent to exercise an option to extend services within a period indicated in the fill-in found in the clause, most often 60 calendar days prior to the end of the current contract term.
Option to Extend the Term of the Contract
As prescribed in FAR clause 52.217-9 of the same name, the Government may exercise the option to extend the term of the contract with written notice to the Prime within a time period indicated in the fill-in found in the clause (most often 30 calendar days prior to the end of the current contract term). The Government must give a preliminary written notice of its intent to extend at least 60 days before the contract expires, unless a different number of days is inserted in the clause, though this notice does not commit the Government exercise the extension.
The clause also says that if the option is exercised that the extended contract is considered to include this same option clause and indicate the total duration of the contract, including the exercise of any options periods. Per FAR 17.204(e), unless otherwise approved in accordance with agency procedures and/or statute, the total of the basic period and all option periods cannot exceed 5 years in the case of services.
Performance is chugging along and you’ve come to the anniversary date of the contract. The Government exercises an option to continue performance. But the Government must also now rate the Prime’s performance at certain intervals.
Contractor Performance Assessment Rating System (CPARS)
CPARS is the Government’s official source for past performance information. Agencies must monitor compliance with the past performance evaluation requirements found under FAR Subpart 42.1502, and use the CPARS metric tools to measure the quality and timely reporting of past performance information for each contract that exceeds the SAT, or at such time a modification causes the dollar amount to exceed the SAT. For construction contracts, performance evaluations are required for contracts exceeding $750,000. For architect-engineer contracts, performance evaluations are required for contracts exceeding $35,000.
Past performance evaluations are prepared at least annually for multi-year contracts, and at the time the work under a contract or order is completed. Evaluations are generally for the entity, division, or unit that performed the contract or order. Past performance information shall be entered into CPARS by the Government and addresses, at a minimum, the following factors:
- Technical (quality of product or service).
- Cost control (not applicable for firm-fixed-price or fixed-price with economic price adjustment arrangements).
- Schedule/timeliness.
- Management or business relation
- Small business subcontracting, including reduced or untimely payments to small business subcontractors when a subcontracting plan is required.
- Other factors, as applicable, such as trafficking violations, tax delinquency, failure to report per contract terms and conditions, defective cost or pricing data, terminations, suspension and debarments, and failure to follow limitations on subcontracting.
Factors are evaluated and a supporting narrative is provided by the Government. Factors are rated with a five-scale rating system (i.e., exceptional, very good, satisfactory, marginal, and unsatisfactory). Ratings and narratives must reflect the definitions in the tables found at FAR Subpart 42.1503, Table 42-1 and Table 42-2 (when applicable).
Once entered by the Government, the Contractor will receive notification of a rating and can supply information for the record on any Government rating, comment, or feedback. If the Contractor does not agree with the CPARs rating, the rating still becomes available in the CPARS system for source selection officials to view not later than 14 days after the date on which the Contractor is notified of the evaluation’s availability for comment. The CPARS record is updated with any Contractor comments provided after 14 days as well as any subsequent agency of review of Contractor comments received. CPARS ratings are not subject to FAR protest procedures.
Agencies must use past performance information in CPARS. that is within three years (six years for construction and architect-engineer contracts) of the completion of performance of the evaluated contract or order, and information contained in the Federal Awardee Performance and Integrity Information System (FAPIIS), related to terminations for default or cause.
Contract Closeout or Termination
Contract closeout will occur once the Government makes its final inspection/acceptance and final payment has been made. Contract termination may also prompt an end to contract performance either for the convenience of the Government or due to the deficient performance of the contractor (“default”). Closeout of contract files can be a time-consuming process but is necessary to fully remove completed projects from the Government’s books. Termination, on the other hand, can be a quick process because it is most often reactionary in nature. Both require Government resources and Contractor cooperation to achieve results in a reasonable period.
Closeout
The closeout process is the process most all contracts will go through at the end of the performance cycle. Closeout is triggered by the physical completion of performance under a Federal contract. A contract is “physically completed” when the Contractor has completed the required deliverable and the Government has inspected and accepted supplies, the contractor has performed all services and the Government has accepted those services, and all option provisions, if any, have expired.
The Administering Contracting Officer (ACO), if one has been assigned, handles initiating administrative closeout after receipt of evidence of physical completion. If one has not been assigned, the Contracting Officer will act as the ACO to conduct the closeout. The ACO reviews the contract funds status and notifies interested parties (i.e., contractor, finance, and funding office) of any excess funds that require deobligation (i.e., removal from the contract by modification). Administrative closeout requires that the ACO ensures (as applicable)—
- Disposition of classified material is completed.
- Final patent report is cleared.
- Final royalty report is cleared.
- There is no outstanding value engineering change proposal.
- Plant clearance report is received.
- Property clearance is received.
- All interim or disallowed costs are settled.
- Price revision is completed.
- Subcontracts are settled by the prime contractor.
- Prior year indirect cost rates are settled.
- Termination docket is completed.
- Contract audit is completed.
- Contractor closing statement is completed.
- Contractor final invoice has been submitted.
- Contract funds review is complete and excess funds are deobligated (i.e., taken off the contract by formal written modification).
Files for contracts using simplified acquisition procedures should be considered closed when the ACO receives evidence of receipt of property and final payment, unless otherwise specified by agency regulations.
Files for firm-fixed-price contracts, other than those using simplified acquisition procedures, should be closed within 6 months after the date on which the ACO receives evidence of physical completion.
Files for contracts requiring settlement of indirect cost rates should be closed within 36 months of the month in which the contracting officer receives evidence of physical completion. Files for all other contracts should be closed within 20 months of the month in which the Contracting Officer receives evidence of physical completion.
The ACO will complete a Contract Completion Statement when all tasks are completed and forward the statement to the paying office of record. The paying office will close the contract file upon issuance of the final payment to the Contractor. Note that a contract cannot be closed if it is under litigation or terminations actions have not been completed.
Termination
The termination clauses along with other contract clauses authorize Contracting Officers to terminate contracts for convenience, or for default, and to enter into settlement agreements.
Whether for default or convenience, the Contracting Officer should only terminate a contract when it is in the Government’s interest. A no-cost settlement should be used instead of a termination notice when-
- It is known that the Contractor will accept one,
- Government property was not furnished, and
- There are no outstanding payments, debts due to the Government, or other contractor obligations.
When the price of the undelivered balance of the contract is less than $5,000, the contract should not normally be terminated for convenience but should be permitted to run to completion.
Terminations should only occur after written notification to the Contractor, whether for convenience or default. The notice will say the contract affected, effective date, extent of termination (partial or total), special instructions, and steps the contractor should take to minimize impact on personnel if the termination will result in a significant reduction in the contractor’s workforce.
After the Contracting Officer issues a notice of termination, the Termination Contracting Officer (TCO) (if designated) handles negotiating any settlement with the Contractor. Auditors and TCO’s must promptly schedule and complete audit reviews and negotiations, giving particular attention to the need for prompt action on all settlements involving small business concerns. In the interim, per FAR Subpart 49.104, the Contractor must—
- Stop work immediately on the terminated portion of the contract and stop placing subcontracts thereunder.
- Terminate all subcontracts related to the terminated portion of the prime contract.
- Immediately advise the TCO of any extraordinary circumstances precluding the stoppage of work.
- Perform the continued portion of the contract and submit promptly any request for an equitable adjustment of price for the continued portion, supported by evidence of any increase in the cost, if the termination is partial.
- Take necessary or directed action to protect and preserve property in the contractor’s possession in which the Government has or may acquire an interest and as directed by the TCO, deliver the property to the Government.
- Promptly notify the TCO in writing of any legal proceedings growing out of any subcontract or other commitment related to the terminated portion of the contract.
- Settle outstanding liabilities and proposals arising out of termination of subcontracts, obtaining any approvals or ratifications required by the TCO.
- Promptly submit the Contractor’s own settlement proposal, supported by appropriate schedules.
- Dispose of termination inventory, as directed or authorized by the TCO.
- In the case of terminated construction contracts, ensure the cleanup of the site, protection of serviceable materials, removal of hazards, and other action necessary to leave a safe and healthful site.
A subcontractor has no contractual rights against the Government upon the termination of a prime contract. A subcontractor may have rights against the Prime Contractor or ia higher-tier subcontractor with whom it has contracted. Upon termination of a prime contract, the Prime Contractor and each subcontractor are responsible for the prompt settlement of the settlement proposals of their immediate subcontractors.
For additional details regarding settlement agreements, see FAR Subpart 49.109 for Prime Contractors and FAR 49.108 for settlement of subcontract settlement proposals.
That’s it! You’ve just successfully finished your first Government contract for services. Now you’ve got experience, a new (and hopefully happy) Federal agency as a client, and confidence to continue pursuing more contracts and grow your space in the Federal marketplace. And not just winning a contract but understanding the process will show your commitment to serving your target client agencies and helping them be successful in their mission to provide products and services to the warfighter and/or the public.
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Market Research Isn't About Checking A Box (Weathering the RFO - Part 4)
"I guess FAR Part 10 is gone."
I've seen statements like that in a few posts floating around LinkedIn. And yes, on the surface that's true.
But in practice, market research just became more important and has moved upstairs to live with FAR Part 7 where it belonged all along, in acquisition planning. It's now woven directly in there and no longer seen as a separate activity. I mean, as a Contracting Officer, this is how we have approached it for decades. Good acquisition planning always depends on good market research. You can't develop a sound acquisition strategy without understanding the marketplace you're buying from.
From my perspective, that's not a bad thing.
While acquisition planning encompassing market research is a change in structure, we really need to take it a step further and look at...Why did the Revolutionary FAR Overhaul (RFO) bring them together while simultaneously reducing much of the prescriptive language that historically guided how market research was conducted and documented?
For years, we taught acquisition planning and market research as two separate FAR parts. But they never really lived separately, though industry might think that:
“First, the Government conducts market research then it plans the acquisition.”
Not so quick.
If you’ve been around the inside of the Federal acquisition lifecycle as a member of the acquisition team – the requiring activity, the small business specialist, the end user, or in contracting – you know that's not how good acquisitions worked for real. Planning never stops once a need is put into the budget. It only ramps up on a trajectory that gets faster and steeper the closer to you to either the need date or the end of fiscal year. That trajectory includes market research throughout the pre-solicitation phase.
We used market research to shape, then adjust the acquisition strategy and acquisition plan with what we learned. And that learning didn’t always come in the form of an RFI. We refined requirements, reconsidered contract types, identified capable small businesses we hadn't previously considered, discovered commercial solutions that changed the direction of the procurement, and poured through acquisition history in our agency and others.
In other words, market research isn't one step.
It is always on your mind as the budget becomes known, the requirements start to materialize, and the opportunity becomes known to industry.
The RFO recognizes that reality by integrating market research now into FAR Part 7. That's a positive evolution. It reflects how acquisition professionals do the work.
But something else changed, too.
The rewritten framework is noticeably less prescriptive…intentionally. The FAR Council has been very clear that one of the objectives of the FAR re-write is to reduce unnecessary procedural requirements, simplify the regulation, and place greater reliance on professional judgment.
I understand that objective and I support it. BUT… I keep thinking about the fact that federal contracting isn't just about making good business decisions. It's about making decisions that are FAIR.
And those two things aren't always the same.
When people outside Government hear the word “process”, they often think “bureaucracy”. Federal employees like little hamsters on wheels running the cogs of a system where they are looking for ways to slow down, do less, take up more time, eat up more industry dollars, and short cut the system.
As a Contracting Officer, “process” to me meant “fairness”. And it provides certain tests you have to meet.
Could another company look at this acquisition and conclude it had a fair opportunity to compete?
Could GAO understand why we selected this acquisition strategy?
Could an Inspector General reconstruct our thinking?
Could my supervisor understand my rationale for this acquisition strategy?
Could I defend this decision six months from now if someone challenged it?
THAT STILL MATTERS.
Those questions are part of what makes federal procurement DIFFERENT from commercial buying, EVEN WHEN the Government's version of commercial processes are used.
It’s precisely why market research evolved into more than simply learning about the marketplace.
It also became one of the ways agencies demonstrated that acquisition decisions were informed, deliberate, and fair.
Not perfect, but fair.
From the Contracting Officer's Chair
One of the themes you'll continue to see throughout Weathering the RFO is a simple question: Why was this process or procedure there in the first place? That's very different from asking whether it was statutory.
Many of the historical procedures surrounding market research weren't created simply to generate more documentation. They evolved because they promoted thoughtful decision-making, encouraged agencies to explore commercial solutions, supported small business participation, and helped acquisition teams avoid unnecessarily restrictive requirements.
And most importantly, they created a record explaining how the Government arrived at its acquisition decisions.
Understanding why they evolved in the first place is equally important as putting process and procedure through a woodchipper. Because we all know – because it’s been said – that this is all about clearing perceived dead wood. But dead wood holds history. Trees grow through resilience. Every ring a year; a set of seasons that tested its endurance. The nonstatutory language shifted out of FAR holds years of lessons learned, protest wins and losses, shifting markets, and economic and national crises. While some may still be in the FAR Companion and Practitioners' Albums, they no longer carry the same weight.
It should carry some weight. It must inform judgement -- good judgement.
"Trust the acquisition workforce" is now basically what the RFO says.
The rewritten framework relies more heavily on judgment – but not professional experience, education, business acumen, and common sense.
Just less prescriptive lingo and little to no instruction.
Experienced Contracting Officers are capable of not missing a beat and exercising that good judgment. Many do daily. The larger question is how we develop that judgment across the workforce. Judgment doesn't appear because regulations shrink. It comes from experience, mentoring, training, discussion, successes, mistakes, and protests.
If we reduce regulatory prescription, we need equally strong investments in developing professional judgment. They go hand in hand.
As a Chief, I never just asked, “Did you complete your market research?"
This list of questions were almost always asked to at least one project manager in our Advanced Acquisition Planning Boards (AAPBs) in USACE and FAA.
“What do we know about the differences in the market between this procurement and the last.”
“Who is in the market now and who has left? Who is emerging?”
“What economic factors could change this acquisition throughout its lifecycle?”
“What are current trends and market indicators in this industry telling us?”
“What don’t we know and how are we getting that information?”
If the answer was, "Nothing," I usually wasn't encouraged but I also didn’t just let it slide because good judgement and due diligence demands these questions be asked and the answers found and considered.
Good market research should occasionally prove us wrong. It should challenge assumptions. It should make us rethink a requirement, reconsider a contract type, or discover capability we didn't know existed.
If market research never changes the acquisition strategy, we need to ask ourselves if we are really studying the right marketplace or simply documenting decisions we've already made to fit a solution we already know we want.
The VALUE of market research is that the "THINKING" piece of it MADE ACQUISITIONS BETTER. The report you spit out to check a box is not the value.
What I see working through the RFO is that there is strength in integrating market research into acquisition planning. However…we need to pay close attention is the corresponding reduction in prescriptive procedures. Those procedures didn’t only historically tell contracting officers what to do. They promoted consistency, transparency, and fairness in how acquisition decisions were made and documented.
The question isn't whether procedures should remain. It’s whether acquisition teams will continue to approach market research with the same discipline now that the RFO has created a less prescriptive process.
If acquisition teams can maintain discipline, consistency, transparency, and fairness, then the RFO changes have real potential to improve acquisition planning. But if market research becomes something we document after the important decisions have already been made, we'll have missed the opportunity the RFO, I believe, intended to create.
Ultimately, success won’t be measured by deleting FAR Part 10 and shifting it to FAR Part 7 to say we eliminated redundancy for some quick Administration win. It needs to be measured by whether acquisition planning becomes more informed because market research is fully integrated into it and not treated as a compliance exercise that happens alongside it.
Some measures of RFO success related to market research include assessing if:
• Agencies create ways to encourage thoughtful market research while reducing costs for industry. No more RFIs that are mini-RFPs.
• Tools, training, and leadership develop the critical thinking skills needed for newer contracting professionals in a less prescriptive market research environment. Moving beyond checklists to business acumen.
• Agency acquisition strategies demonstrate fairness and consistency.
• Market research is integrated into acquisition planning earlier, resulting in more meaningful engagement -- and new methods for that engagement -- with industry.
• Five years from now, acquisition professionals aren’t viewing market research as a report but an innate requirement for good acquisition planning.
It’s up to industry and Government to keep market research fair and real versus it being relegated to a claim of less pages or a shorter FAR.
What’s Coming Next -- When Judgment Carries More Weight
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Author: Shauna Weatherly, President, Federal Subcontract Solutions LLC (dba FedSubK). Shauna is a small business advocate and owner of FedSubK. FedSubK exists to simplify federal contracting, empowering small businesses with practical, understandable resources. We bring first-hand experiences in Federal contracting from multiple perspectives derived from roles held both in and out of Government over almost four decades of Federal service.
Visit us at fedsubk.com to learn more about--
Getting Started in Federal Contracting: fedsubk.com/begin-your-journey-here
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Where Good Procurements Really Begin (Weatherly the RFO - Part 3)
Before I got my first warrant (required to sign contracts), I was a Contract Specialist writing my first acquisition plan. It was for a large Total Environmental Restoration Contract (TERC) that included A-E, Services, and Construction terms and conditions. I was told, "follow FAR Part 7." I thought, "Okay, looks like I'll be doing a lot of these in the coming years. Figure it out." With a few years under my belt, I learned quickly that acquisition planning is the foundation for every successful procurement.
When I moved into leadership roles, we built acquisition planning into our entire program and project lifecycle. We implemented Advanced Acquisition Planning Boards (AAPBs) before writing lengthy acquisition strategy and planning documents. We invited stakeholders like Contracting to attend the budget request preparation meetings for the next FY. We started shaping an understanding and a plan of action months and years in advance of analyses and research.
Anyone who has spent time around acquisitions in the Federal space knows that most procurement problems begin at the beginning, before any procurement forecast goes into Acquisition Gateway or on the agency’s small business page, or any Sources Sought notice is issued in SAM. Long before a solicitation is issued and proposals arrive. And long before anyone files a protest.
You can almost always pin-point where, if you are going to have a problem, it will begin.
When an agency hasn't fully thought through what it's buying, why it's buying it, how the requirement should be structured, who might be capable of performing it, or what risks need to be managed before the acquisition ever reaches the marketplace.
Acquisition planning is preparation. If that’s not what we’re doing, we’re already creating problems for every acquisition phase that follows.
And that's why this topic in federal acquisition and the proposed RFO rules deserves attention, especially now that FAR Part 10, Market Research, has been combined with FAR Part 7, Acquisition Planning. Combining acquisition planning and market research recognizes something practitioners have known for years -- they're inseparable.
But it also means that changes to planning now ripple directly into how agencies understand the marketplace before they ever write a solicitation.
Congress never cared whether agencies produced acquisition plans. Congress cared whether agencies made good acquisition decisions. They care about competition, stewardship of taxpayer dollars, thoughtful use of small businesses, commercial buying, performance-based acquisitions, and risk management.
Those are the objectives.
Acquisition planning has been the primary tool for achieving them. But the plan itself was never the goal. The effort behind the plan was. Acquisition planning is simply one of the first steps in the procurement process. It is the place where the most important decisions have already been made.
Consider the examples I gave above about the discussions in the AAPB and budget request preparation. All of that is well before anything was put into writing. And heck, by the time the RFI was released (if we released one), just about every big question was already answered.
• Will this be a small business set-aside?
• Have commercial solutions been considered?
• Should the requirement be bundled?
• What's the acquisition strategy?
• What contract type makes the most sense?
• How will proposals be evaluated?
• How much performance risk is acceptable?
Those decisions are a product of discussions very early in acquisition planning. By the time industry reads the solicitation, many of the biggest decisions have already been made. The solicitation simply makes those decisions visible. So that begs the question…
…If acquisition planning changes, doesn’t everything downstream change, too?
I have a ton of notes in the margins of my electronic copies of the RFO parts issued so far. Most center around... Where is the acquisition leadership expecting contracting specialists and contracting officers to learn how to think through these decisions? I'm not talking training sessions, listening sessions, leadership briefings, webinars, the FAR Companion, Practitioners' Albums.
We are overwhelmed by data these days -- there is no shortage. Collection of data isn't the issue. it's what to do with it once we have it. What is meaningful and what isn't? That's a legitimate concern from the perspective of a contract specialist working different types of contracts in their cradle-to-grave office set-up. Or the specialist or contracting officer moved as a result of agency realignments and now buying something new, with no training whatsoever.
With the FAR Council is intentionally moving away from detailed procedural direction in favor of shorter regulations supported by guidance outside the FAR, we have to acknowledge that, historically, the FAR didn't just tell contracting officers what it needed to comply with, but often explained how to ensure compliance and answered questions about how to get it done.
From the Contracting Officer's Chair
Let’s start with a discussion about curiosity. Bring me a purchase requestion and I would have a list of questions ready for you. I know from experience that my answers and how this action continues hinges on what those answers are. That includes everything that goes right and wrong, long before I use any AI tool and ask questions.
• What problem(s) are we trying to solve?
• Is there another way to buy this?
• Has it been purchased before?
• Who in industry might already be doing it and how is it procured?
• What risks are we creating and mitigating?
• What opportunities are we overlooking and creating?
• What is it that we don’t know yet but need answers for?
And then the standard "dollar value", "when do you need it", and "do you have money yet" questions.
Every profession has it and the contracting craft is no different. Knowing what questions to ask is part of the craft. Also part of the craft is learning how best to pass information from one experienced professional to the next. The RFO is forcing us to reconsider where and how that institutional knowledge should live going forward. And, how we preserve it in market research and acquisition planning.
Written acquisition plans preserve all discussion and decisions points. It is the ultimate fallback for the building of the solicitation and the justifications of what we are doing and why in the pre-award phase leading to the solicitation. It is never seen by industry but relied upon by acquisition. Making preservation discretionary means documentation practices could vary significantly across agencies, depending on each agency's implementation decisions and tolerance for risk.
What gets lost are rationales, alternatives considered, risk discussions, disagreements, lessons learned, why things changed from the last procurement, and what outside influences impacted current decisions. Acquisition plans in their written form allow that information to be inherited by future acquisition teams. This deserves more attention than it's receiving in the RFO.
The RFO made the changes in FAR Part 7 about the laundry list of what had to go in the plan.
Wrong argument.
It is ALL about careful consideration of facts and circumstances before acting. How much consideration is required to make informed decisions, preserve those decisions so we have them as a guide moving forward, and actually use them to improve and streamline the process. Contracting officers know that their judgment can't be regulated. They stop relying on checklists and start recognizing patterns. They know the questions to ask end users, requiring activities, legal counsel, budget, and small business specialists because seeing the patterns for a poor acquisition form. That's because most know where acquisitions tend to go off track from living through it.
If the FAR is going to become shorter, the acquisition workforce needs a deliberate and consistent strategy across the board for preserving the judgment, rationale, and historical knowledge that good acquisition planning has always provided.
Otherwise, while we simplify the rulebook, it will -- for now -- make the profession harder to master.
What’s Coming Next -- Article Four: Market Research Isn't About Checking a Box
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Author: Shauna Weatherly, President, Federal Subcontract Solutions LLC (dba FedSubK). Shauna is a small business advocate and owner of FedSubK. FedSubK exists to simplify federal contracting, empowering small businesses with practical, understandable resources. We bring first-hand experiences in Federal contracting from multiple perspectives derived from roles held both in and out of Government over almost four decades of Federal service.
Visit us at fedsubk.com to learn more about--
Getting Started in Federal Contracting: fedsubk.com/begin-your-journey-here
Solutions and Our Trusted Support Provider Network: fedsubk.com/solutions-services
Insights from a Contracting Officer: fedsubk.com/insights
Free Webinars and Resources: fedsubk.com/webinars-training
What Does Nonstatutory Really Mean? (Weathering the RFO Series - Part 2)
In my last article, I talked about one of the biggest misconceptions surrounding the Revolutionary FAR Overhaul (RFO) is the idea that the Federal Acquisition Regulation (FAR) itself creates procurement policy. It doesn't. And if you are in GovCon, you should know that basic truth. Congress creates procurement policy. The FAR implements it. That distinction changes how we should think about the RFO. Instead of asking, "Why did they delete that?" I think we should first ask, "What purpose was that requirement serving?"
That question brings me to one of the most overused words appearing in every conversation or Government briefing about the RFO (aside from "empowering")...
Nonstatutory.
But it really is the most misunderstood word in the current conversation.
You'd think it was pretty straightforward. When you hear that the FAR Council was removing nonstatutory requirements from the FAR, the reaction was pretty simple. “Well, okay. If Congress didn't require it, why should it stay?" Just one thing...that assumes something that isn't necessarily true --
...if Congress didn't specifically require a process or procedure, the process or procedure isn't important.
Whoa! Think about that for a minute.
I spent most of my career implementing FAR, not just reading it, and that is NOT the right conclusion.
Being a Contracting Officer teaches you is that two questions can sound almost identical while leading to very different answers. And as Contracting Officers, we’ve been taught to pay attention to words very carefully.
In this case, the first question is a legal question: "Did Congress require this? " But the next is an acquisition question: "Why did this process or procedure exist to begin with?" Sometimes the answer to both questions is the same. Congress required it. Case closed. But more than not, they aren't. And that comes out when you sit in a FAR policy working group meeting. You hear the discussion and debate over what Congress said is the law and the intent of that law, versus how we implement the law and ensure compliance with the law. In that room, the conversation always went back to Congress established the objective and intent or outcomes. The FAR established the procedure with which to ensure objective or intent was achieved.
And THAT requires consistency to get there Governmentwide. So, how do you get consistency? Processes and procedures.
Ouch! There are those pesky processes and procedures again. Those "nonstatutory" actions.
Congress rarely dictates via law how to get from point A to point B for something like acquisition planning. Or market research. Or documenting a responsibility determination.
The FAR has historically translated policy into repeatable acquisition practices. And for good reason. Left to their own devices, agencies have as many ways to do acquisition as the number of acquisition professionals they have on staff.
Honestly -- how many times have you worked with two Contracting Officers in the same office that didn't do the same thing the exact same way, even with processes and procedures in place.
Often.
How FAR Actually Evolves
FAR didn't appear one day as a finished document. It evolved. And that evolution was expressly the oversight of the FAR Council which allowed the document to grow to into a perceived answer book, versus a regulation. And every acquisition professional has lived some part of that evolution. We've seen the legislation, been involved in protests, participated in IG reviews and seen the reports (and responded to them), instituted best practices and lessons learned...and more. Over time one-off procurement issues in a single agency or type of acquisition across Government become a way to migrate fixes into regulatory language in an effort to reduce risk. If Contracting Officer's weren't taking risks it was because the FAR kept the lanes narrow to the point there couldn't be an innovation race to streamline acquisition. The grey area in FAR become harder to find. Not because Congress required it but because acquisition leaders across Government kept watering the regulatory jungle of the FAR.
The thread of consistency is created in the rulemaking process.
Congress passes a law requiring agencies to maximize practicable opportunities for small businesses. Congress doesn't necessarily prescribe every analytical step a Contracting Officer should take before deciding whether a procurement should be set aside.
But take that law, give it to SBA, they write a rule, and upon finalization...if the FAR Council believes it should be incorporated into the regulation, it creates a FAR case and tasks one of two councils – the Civilian Agency Acquisition Council (CAAC) or the Defense Acquisition Regulations Council (DARC) – to lead the process of drafting, coordination, and agreement on the text of the rule.
The entity on point (CAAC or DARC) and its co-chair (whichever isn't the lead) herd procurement analysts in working groups to write FAR changes that include PROCESSES for implementation. These acquisition professionals from across government talk about interpretations and context. And they are sorting out the commonality all of what they all do. That's where process and procedure start to become important.
Interpretation and context is everything in the acquisition business. The words are chosen carefully and the decision to create a process or procedure within the FAR is the way to ensure consistency and the outcome / intent is achieved.
Once rules become final and their processes were implemented, they become tied to other processes and you get a series of procedures that tie across types of contracts, use of certain funding, types of buying methods, and types of evaluation processes... and more.
Those processes and procedures become threads of consistency across government.
But that doesn't mean every process or procedure put into place should remain forever. I mean, the RFO just now got rid of the American Reinvestment and Recovery Act (ARRA) language from awards made in 2009 and 2010. Why did that take so long?
From the Contracting Officer's Chair
We need to understand what role processes and procedures have been playing before deciding they are no longer needed. Particularly with an acquisition workforce turned upside down through "The Fork" and DRP and people jumping ship. We don't have the same level of historical knowledge now. Face it. Things are different. Not bad, just different.
Without process and procedures in place, how do they learn? By making bad decisions and getting your neck chopped in a time of threats to your livelihood coming from several directions? Behavior isn't likely to include a new level of taking risks in that environment.
Government acquisition leadership (and some of those hosting Government acquisition leaders in their think-tanks) simply aren't facing reality.
Now, I'm not arguing against simplification. Frankly, it is the exact opposite. Ive wanted a more readable and user-friendly FAR for years. That part of the RFO is worthwhile. But simplification being good, isn't what this is all about. It's about -- Now that “X” has disappeared, what else disappears with it? It's about distinguishing between simplifying regulations and building better outcomes. It's really easy to simplify something when you're looking at it from 30,000 feet. It's much harder when you're the Contracting Officer responsible for defending the acquisition file two years later.
Will Contract Specialists and Contracting Officers still have the same training, historical knowledge, management support, and tools available in while operating in the shell of the former workforce capacity -- especially at the end of fiscal year?
Did you notice the thing missing in my take versus the FAR Council's take?
I'm not asking whether the provision was statutory.
I'm asking questions the acquisition workforce is asking.
If someone had walked into my office twenty years ago and said, "Shauna, this thing you're making me do, it isn't statutory." My next question probably would have been, "Okay...but it helps accomplish X, so why wouldn't we use it?" Not because I was defending regulations but because I was trying to understand whether not doing something changes how I approached an acquisition and create efficiencies. Should I push back and how far can I push the envelope? Or could I defend taking a different action and argue I'm still compliant?
Some procedures existed because they genuinely improved decision-making. Others existed because they reflected old ways of doing business that no longer made sense. One of the responsibilities of a good Contracting Officer is learning to tell the difference. Working in the grey area. Understanding where it lives and not get rid of it when it is needed to achieve the outcomes intended by Congress.
That is our charge as acquisition professionals - exercising business judgement. That often involves a process to ensure we hit the mark and do our due diligency. And you Contracting Officer's know just how often you used processes and procedures in the FAR to fall back on when they actually helped streamline decision-making, efficiency, and consistency.
The RFO now revolves the conversation around statutory information that remains which short-circuits the discussion we need to have.
Statute tells us where a requirement came from, but experience helps us understand why the nonstatutory stuff mattered. And why it might still be needed.
We need that both perspectives as we move forward reviewing proposed RFO changes.
What's Coming Next -- Article Three: Where Good Procurements Really Begin?
One of the first places it gets real is acquisition planning. The FAR has historically translated procurement objectives put in place by Congress into how we determine acquisition planning requirements. And that influences everything from competition to market research to small business participation.
Next, I’ll be talking about why acquisition planning became one of the foundations of federal procurement and what it means when many of those implementation details move from regulation to guidance…again, two very different things.
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Author: Shauna Weatherly, President, Federal Subcontract Solutions LLC (dba FedSubK). Shauna is a small business advocate and owner of FedSubK. FedSubK exists to simplify federal contracting, empowering small businesses with practical, understandable resources. We bring first-hand experiences in Federal contracting from multiple perspectives derived from roles held both in and out of Government over almost four decades of Federal service.
Visit us at fedsubk.com to learn more about--
Getting Started in Federal Contracting: fedsubk.com/begin-your-journey-here
Solutions and Our Trusted Support Provider Network: fedsubk.com/solutions-services
Insights from a Contracting Officer: fedsubk.com/insights
Free Webinars and Resources: fedsubk.com/webinars-training
