(A) Business Strategy: In determining the business strategy, use the following approach:
(1) Determine appropriate and most effective cross-functional IPT. This involves an IPT structure comprised of appropriate process owners with stakeholder coordination and in some cases - participation, depending upon the size and complexity of the acquisition. The IPT should function as an integrated team throughout the entire acquisition process to ensure all issues, concerns, and needs are appropriately addressed when pursuing the best value solution. IPT members may include, but not be limited to technical specialist, demand planners and supply planners, item managers, quality assurance specialists, contract specialist, legal counsel, contract review and/or pricing analysts, financial analyst, weapon system support managers, supplier relationship managers, and customer representatives to include DLA’s customer support representatives and an industry representative when appropriate to the circumstances. Appendix B provides information and guidance on leading and participating in effective and efficient IPTs.
(2) Evaluate and assess the abbreviated BCA data. This includes evaluating the baseline costs, facts, and supporting details among potential business alternatives and documenting the current environment, possible improvements, and an outline of business strategy.
(3) Document the logistical benefits (e.g. reduced administrative lead time, reduced production lead time; reduced inventory; reduced customer wait time; increased supply availability; improved readiness; added contractor services such as forecasting, inventory management, quality; reduced manual purchase requests (PRs) (touch labor)); configuration control management; distribution and transportation services specific to the acquisition and that will be measured and tracked in Phase IV.
(4) Select type of PBL support (corporate contract, PV, VPV, standard long term contract) if applicable, where performance metrics are incorporated that best serves the customer’s needs, is consistent with the BCA conclusions, and provides the most effective and improved method of support. A long-term contract may not be a PBL if there are no performance metrics (other than compliance with delivery schedule).
(5) Develop exit strategy for transitioning items and support from contractor managed to DLA managed, if necessary.
(B) Acquisition Planning Approach:
(1) As with the business strategy, acquisition planning should be accomplished by applying the right level of expertise to formulate the strategy. When developing the acquisition plan, the integrated team should develop an approach that is appropriate to satisfying the identified requirement, consistent with sound business practices and based on the degree of risk involved. The team should also establish the managerial approach that will be used to direct and monitor all elements of the acquisition to achieve the goals and objectives established during Phase I and identified in the BCA.
(2) Market Research. Although an initial market investigation may have been conducted during Phase I, it may be necessary to validate those initial assumptions or conclusions and apply them toward a more comprehensive analysis of the market environment. In addition, using the IPT to accomplish market research may add additional value when determining the appropriate strategy to implement. Market research information and web sites are available at http://www.arnet.gov/Library/PreSolicit/presolicit.html.
(3) Sole Source Strategy. During Phase I and subsequent to market research, the IPT may conclude the requirements are available from only one source. This determination should be made as early as possible when considering long term, strategic partnerships, and business relationships using an SSA or corporate contract approach. These types of strategies model commercial best practices, increase value, and enhance support to our customers. When considering an SSA, the following factors should support the decision:
● The requirement is adequately justified as sole source and will be validated at least annually and before each option exercise.
● An agreement, developed jointly between the IPT and the contractor, can be established and documented to clearly outline the aspects of the business relationship to include business rules, functional roles, goals, and milestones.
● The customer is fully engaged and supports the elements of the business agreement.
● An exit strategy is adequately incorporated into the agreement.
● The IPT will prepare a concise, high-level charter to be signed by the Director, DLA and the industry counterpart.
Whether the acquisition is an SSA, corporate contract or other sole source strategy, IPTs are encouraged to utilize the alpha contracting process as a partnering technique to streamline the procurement process and achieve a reduction in time to award the contract. Appendix A provides a description and information on alpha contracting.
(a)(2)(B)(4) Competitive Strategy. When aggregating requirements that were previously solicited separately, and especially those previously awarded to small business, or requirements for which a small business could have competed, consult the contract bundling and consolidation guidance set forth in DLAD 7.107 and 7.170, respectively, to determine whether this could qualify as a bundled or consolidated acquisition. If so, assess the impact on small business before proceeding with the acquisition. Tailor evaluation factors to allow for offerors to propose different or innovative methods of support to include performance metrics or incentives. A pre-proposal conference may be appropriate to obtain industry input, improvements, and new or alternative approaches to acquiring the requirement.
(5) Performance Based Statement of Objectives (SOO)/Statement of Work (SOW). The IPT will develop a SOO or SOW, depending upon the specific requirement identified in Phase I. Analyze the SOW and additional requirements to determine which contract performance requirements, if any, should be subject to award or incentive fees. Candidates for consideration as incentive/award fee elements should be those that are high-risk processes or a new process improvement not performed traditionally.
(6) Planned Contract Type. Contract types (e.g. firm fixed price, fixed price incentive, fixed price with economic price adjustment) most likely to motivate contractors to perform at optimal levels shall be chosen, with consideration given to risk assessment and reasonable risk-sharing by the Government and the contractor(s). If acquiring commercial items under FAR Part 12, use of incentives is permitted as long as the incentive is based solely on factors other than costs, e.g. performance or delivery.
(7) Method of Contract Performance Management:
(i) Contract Performance Management Plan. There is a need to provide enhanced monitoring of contractor performance and to ensure satisfactory administration of PBL acquisitions. Therefore, the contracting officer, in conjunction with the IPT, should develop a contract performance management plan to delineate responsibilities for specific administration functions. The plan requires coordination within the IPT to include the Customer Support Representatives, the customer, and the Defense Contract Management Agency (DCMA), where appropriate. The plan should describe the method of managing performance (measuring/tracking metrics and incentives) after award, identify specific roles and functions (include specific responsibilities for the contracting officer, COR (if applicable), ordering officer, DCMA, and program manager.
(ii) Performance Review Board. Consider establishing a performance review board. The board should be comprised of appropriate representatives within the ICPs as well as customer representatives such as the fleet, program management offices, DCMA, or Military Services (when in a PBL partnership arrangement). The purpose of the board is to oversee contract performance. This can be done on a periodic basis such as monthly, quarterly, etc., and may also serve as the review/approval forum for award fees, incentives, and disincentives in accordance with the associated plan.
(8) Planned Evaluation Strategy/Negotiation Strategy:
(i) Determine Contract Incentives/Disincentives. To the maximum extent practicable, performance incentives, either positive or negative or both, monetary or non-monetary, shall be incorporated into the contract to encourage contractors to increase efficiency and maximize performance. Appendix B includes information and guidance regarding use of incentives in defense acquisitions.
(ii) Establish Metrics. Ensure the use of measurable performance and supply chain effectiveness standards. Examples include, but are not limited to: quality, fill rate, back orders, logistics response time, contractor processing time, customer wait time, and customer satisfaction. When establishing metrics, ensure the metrics can be directly linked to the performance incentives.
