DoD Releases Revised Acquisition of Services Policy

October 27, 2006 // Published as a news service by IHS

The policy and complementary guidance supersede the acquisition of services memo issued May 31, 2002 and enclosure eight to DoD Instruction 5000.2 issued May 12, 2003.

Purpose
The policy ensures that acquisitions support and enhance the war fighting capabilities and achieve the following objectives:

• Acquisitions are based on clear, performance-based requirements.
• Expected cost, schedule and performance outcomes are identifiable and measurable.
• Acquisitions are properly planned and administered to achieve outcomes consistent with customer's need(s).
• Services are acquired by business arrangements that are in the best interests of the DoD and are in compliance with applicable statutes, regulations, policies and other requirements whether the services are acquired by or on behalf of the DoD.
• Services are acquired using a strategic, enterprise-wide approach, which is applied to both the planning and the execution of the acquisition.
• The policy implements section 2330 of title 10, U.S. Code (U.S.C.), as amended by section 812 of the National Defense Authorization Act for fiscal year 2006 (Pub. L. No. 109-163).

Applicability
The policy applies to:

• The office of the secretary of defense, the military departments, the chairman of the Joint Chiefs of Staff, the combatant commands, the office of the inspector general of the DoD, the defense agencies, the DoD field activities and all other organizational entities within the DoD referred to as DoD components.
• All requirements for acquisition of services including those of advisory and assistance services acquired from private sector entities by or for the DoD. Although the policy does not apply to R&D or construction activities, it does apply to any advisory and assistance services in support of those activities. Senior officials and decision authorities may include R&D related activities within the strategic intent of the policy.
• Acquisition services - occurring after a program achieves full operational capability - that were not subject to previous milestone reviews.
• Exception: Acquisition of services that are part of a weapon system acquisition program or an automated information system that is managed in accordance with DoD Instruction 5000.2 shall be reviewed and approved as part of that program management process.
• Senior officials and decision authorities retain the ability to respond rapidly to emergencies. Implementation of the policy is not intended to impede the timely acquisition of services in emergency situations.

Definitions

• Acquisition of services: The execution of one or multiple contracts or other instruments committing or obligating funds such as funds transfer and placing orders under existing contracts for a specified requirement. Acquisition begins at the point when agency needs are established and includes all functions directly related to the process of fulfilling those needs by contract, agreements or funds transfer.
• Information technology (IT) services: The performance of any work related to IT and the operation of IT including national security systems. This includes outsourced IT-based business processes, outsourced information technology and outsourced information functions.
• Procurement action: A procurement action includes the following:
  • Entry into a contract or any other form of agreement including, but not limited to, basic ordering agreements, blanket purchase agreements, indefinite quantity/indefinite delivery contracts and similar ordering agreements.
  • Issuance of a task order or any transfer of funds to acquire a service on behalf of the DoD.
• Service: Engagement of the time and effort of a contractor whose primary purpose is to perform an identifiable task or tasks rather than to furnish an end item of supply.

Management structure
Senior officials:

• The undersecretary of defense for acquisition, technology and logistics (USD(AT&L)) shall be the senior official responsible for the management of acquisitions of services by or on behalf of the DoD components outside the military departments except as provided in paragraph 4.1.3. The USD(AT&L) may delegate decision authority to commanders and directors of the DoD components (see attachment 4, Defense Agencies and other Components of the Department of Defense Outside the Military Departments) under USD(AT&L) cognizance after the commanders or directors have certified implementation of the policy and identified subordinate decision authorities (see table 1, Acquisition of Services Categories).
• The service acquisition executive of each military department shall be the senior official responsible for the management of acquisitions of services by or on behalf of his or her respective department except as provided in the next paragraph.
• The assistant secretary of defense for networks and information integration (ASD(NII))/DoD chief information officer (CIO) shall be the senior official responsible for the management of acquisitions of IT services.

Duties of senior officials

• Comply with the requirements contained in this policy.
• Assign specific DoD officials as decision authorities (subject to the direction, supervision and oversight of the senior official) to review and approve the acquisitions of services for each category of acquisitions identified.
• Establish a management structure that provides for consistent review and approval of acquisitions of services. The review process implemented by the senior official and used by the decision authority shall require and formally consider the information outlined in attachment 1, Acquisition Strategy Requirements, for all categories of acquisitions of services.
• Ensure that acquisitions of services comply with applicable statutes, regulations, policies and other requirements including the "Proper Use of Non-DoD Contracts" policy memo issued on Oct. 29, 2004 by the acting undersecretary of defense (AT&L) and the acting deputy undersecretary of defense (comptroller).
• Using procedures outlined in attachment 2, Procedures for Proposed Acquisitions of Services with Estimated Values Exceeding Notification Thresholds, notify the USD(AT&L) of any proposed acquisition of non-IT services with a total estimated value of over $1B (base year(s) and options). Notify the ASD(NII)/DoD CIO of any proposed acquisition of IT services with a total estimated value of over $500M (base year(s) and options). The ASD(NII)/DoD CIO shall notify the USD(AT&L) of any proposed acquisitions of IT services with a total estimated value greater than $1B dollars (base year(s) and options).
• If a proposed acquisition includes both hardware and services, and the estimated value of the services exceeds the values specified in the above paragraph, it shall be reviewed by USD(AT&L) or ASD(NII) unless the exception applies.
• Notwithstanding the thresholds in the above paragraph, the USD(AT&L), the ASD(NII)/DoD CIO and other senior officials may identify any acquisitions of services as a special interest acquisition subject to review.
• Consistent with the department's strategic sourcing objective, senior officials shall collaborate with other senior officials, determine key categories of services for the department and dedicate full-time commodity managers to coordinate procurement of these services.
• Ensure that the acquisition of services uses competition and performance based acquisitions to the maximum extent practicable.
• Ensure the collection of data on the acquisition of services for their area of responsibility. At a minimum, data collected shall include the information outlined in attachment 3, Acquisition of Services Data Collection Requirements.
• Monitor required data collection and conduct periodic spend analyses.
• The USD(AT&L) shall conduct an annual review of the department's policy for the acquisition of services and assess the department’s progress in achieving its purpose. Senior officials and DoD component decision authorities reporting to the USD(AT&L) shall conduct similar reviews of acquisitions within their authority.
• Senior officials or their designees shall at a minimum conduct annual execution reviews to assess progress against approved cost, schedule and performance metrics.
• The director, defense procurement and acquisition policy (DPAP/PAIC) shall maintain a list of acquisitions of services that are expected to exceed $1B (base year(s) and options) based on information provided by the DoD components.

Acquisition of services categories
Table 1 at http://akss.dau.mil/docs/2006-3064-ATL%20Complete.pdf defines categories, thresholds and decision authorities.

All acquisitions of IT services, regardless of the acquisition of services category, are subject to subtitle III of title 40 of the U.S. Code (40 U.S.C. 11101 et seq.) (formerly division E of the Clinger-Cohen Act (CCA) of 1996).

• For acquisitions designated as category 1A in Table 1, DoD component senior officials, decision authorities and CIOs shall ensure acquisition planning address the elements of DoD Instruction 5000.2, table E4.T1, "CCA Compliance Table."
• For acquisition of IT services with a total estimated value below $500M (base year(s) and options), the DoD component senior official or decision authority and CIO shall establish procedures that ensure the acquisition strategy and related planning address the relevant aspects of 40 U.S.C. 11101 et seq. before the final solicitation is issued or, for other than full and open competition, before negotiations commence.

Source: Department of Defense (DoD) undersecretary of defense for acquisition, technology & logistics (USD(AT&L)).