Which Of The Following Steps In The Acquisition Of Goods And Services

Atomic number 82 Author: Dick Fairley, Contributing Author: Alice Squires

Procurement Procurement is the human activity of buying appurtenances and services. Conquering Acquisition covers the conceptualization, initiation, blueprint, development, testing, contracting, production, deployment, logistics support, modification, and disposal of weapons and other systems, as well as supplies or services (including construction) to satisfy organizational needs intended for use in, or in support of, defined missions (DAU 2010; DoD 2001).

Acquisition covers a much broader range of topics than procurement. Acquisition spans the whole life bicycle of acquired systems. The procurement of appropriate systems applied science (SE) conquering activities and levels of SE support is critical for an system to run into the challenge of developing and maintaining circuitous systems.

The Guide for Integrating Systems Applied science into DoD Acquisition Contracts addresses how systems engineering activities are integrated into the diverse elements of acquisition and procurement (DoD 2006a).

Conquering Process Model

Multiple acquisition procedure models exist. An acquisition process for major systems in industry and defense is shown in Effigy i. The procedure of acquisition is defined by a series of phases during which applied science is defined and matured into viable concepts. These concepts are afterwards developed and readied for production, afterwards which the systems produced are supported in the field.

Acquisition planning is the process of identifying and describing needs, capabilities, and requirements, too as determining the best method for meeting those requirements (e.g., program acquisition strategy). This process includes procurement; thus, procurement is directly linked to the conquering procedure model. The process model nowadays in Figure ane allows a given acquisition to enter the procedure at any of the evolution phases.

For example, a organisation using unproven engineering science would enter at the beginning stages of the process and would go on through a lengthy period of applied science maturation. On the other hand, a system based on mature and proven technologies might enter direct into engineering science development or sometimes even production.

Figure 1. An Acquisition Procedure Model (DAU 2010). Released by Defence Acquisition University (DAU)/U.S. Department of Defense force (DoD).

Systems Engineering science Role in the Acquisition Process

The procurement of complex systems usually requires a shut relationship between the offeror and supplier SE teams due to the breadth and depth of SE activities. SE is an overarching process that the programme team applies in society to transition from a stated capability need to an affordable, operationally effective, and suitable system.

SE is important to every phase of the conquering process. SE encompasses the application of SE processes across the acquisition life bike and is intended to be an integrating mechanism for counterbalanced solutions addressing capability needs, pattern considerations, and constraints. It is also intended to address limitations imposed past applied science, budget, and schedule.

SE is an interdisciplinary approach; that is, information technology is a structured, disciplined, and documented technical effort to simultaneously pattern and develop system products and processes to satisfy the needs of the customer. Regardless of the scope and type of program, or at what indicate information technology enters the plan acquisition life wheel, the technical approach to the program needs to be integrated with the acquisition strategy conquering strategy to obtain the best programme solution.

Acquisition and procurement in the commercial sector have many characteristics in common with their counterparts in the realm of government contracting, although the processes in the commercial earth are usually accomplished with fewer rigors than occur between government and contractor interactions. Offshore outsourcing is usually practiced in the commercial software arena with the goal of reducing the cost of labor. Commercial organizations sometimes subcontract with other commercial organizations to provide missing expertise and to balance the ebb and menstruum of staffing needs.

In some cases, relations between the contracting organisation and the subcontractor are strained because of the contracting organization's desire to protect its intellectual holding and development practices from potential exposure to the subcontractor. Commercial organizations often take lists of approved vendors that are used to expedite the procurement of needed equipment, products, and services. In these situations, commercial organizations have processes to evaluate and approve vendors in ways that are coordinating to the qualification of government contractors. Many commercial organizations apply SE principles and procedures fifty-fifty though they may not identify the personnel and task functions equally "systems engineers" or "systems engineering."

Importance of the Acquisition Strategy in the Procurement Process

The acquisition strategy conquering strategy is unremarkably developed during the front end cease of the conquering life wheel. (For an example of this, see the Technology Evolution Phase in Figure i.) The acquisition strategy provides the integrated strategy for all aspects of the acquisition program throughout the program life wheel.

In essence, the acquisition strategy is a high-level business and technical management approach designed to achieve program objectives within specified resource constraints. It acts as the framework for planning, organizing, staffing, controlling, and leading a program, also as for establishing the appropriate contract mechanisms. Information technology provides a master schedule for research, development, testing, production, fielding, and other SE related activities essential for program success, every bit well as for formulating functional strategies and plans.

The offeror'due south program squad, including systems engineering, is responsible for developing and documenting the acquisition strategy, which conveys the programme objectives, direction, and ways of command based on the integration of strategic, technical, and resource concerns. A chief goal of the acquisition strategy is the evolution of a plan that will minimize the time and cost of satisfying an identified, validated need while remaining consequent with common sense and audio business practices. While the contract officer (CO) is responsible for all contracting aspects, including determining which type of contract is most advisable, and following the requirements of existing regulations, directives, instructions, and policy memos of an system, the program manager (PM) works with the CO to develop the best contract/procurement strategy and contract types.

Relating Conquering to Asking for Proposal and Technical Attributes

At that place are several formats for requesting proposals from offerors for building complex systems. Figure 2 relates conquering program elements to a representative request for proposal (RFP) topical outline and fundamental programme technical attributes that take been used by the Department of Defense. In general, programs take a ameliorate chance of success when both the offeror and supplier understand the technical nature of the plan and the need for the associated SE activities.

The offeror and supplier need to clearly communicate the technical aspect of the plan throughout the procurement process. The offeror's RFP and the associated supplier proposal correspond one of the formal communications paths. A partial list of cardinal program technical attributes is presented in Effigy ii.

Figure 2. Relating Acquisition to Request for Proposal and Technical Attributes. (DoD 2006a). Released by the U.S. Office of the Secretary of Defense.

Contract-Related Activities and the Offeror's Systems Engineering science and Project Management Roles

A clear understanding of the technical requirements is enhanced via the development of a Systems Engineering Program Systems Engineering Program (SEP). The SEP documents the systems engineering strategy for a projection or program and acts as the design for the conduct, management, and control of the technical aspects of the acquisition program (DoD 2011). The SEP documents the SE structure and addresses government and contractor boundaries. It summarizes the program's selected conquering strategy and identifies and links to programme risks. It also describes how the contractor's, and sometimes the subcontractor's and suppliers', technical efforts are to be managed.

Once the technical requirements are understood, a contract may be developed and followed past the solicitation of suppliers. The offeror's PM, chief or lead systems engineer, and CO must piece of work together to translate the program's conquering strategy and associated technical approach (usually defined in a SEP) into a cohesive, executable contract(s).

Table 1 shows some key contracting-related tasks with indicators of the roles of the PM and LSE.

**Table one. Offeror's Systems Technology and Plan Management Roles (DoD 2006).** Released by the U.S. Office of the Secretary of Defense.
Typical Contract-Related Activities	Systems Engineer and Project Director Roles
1. Place overall procurement requirements and associated budget. Draw the offer'southward needs and any constraints on the procurement.	1. Lead systems engineer (LSE) provides plan technical requirements. PM provides any programmatic related requirements.
2. Identify technical actions required to successfully consummate technical and procurement milestones. The program'due south SEP is the cardinal source for capturing this technical planning.	2. LSE defines the technical strategy/approach and required technical efforts. This should be consistent with the program's Acquisition Strategy.
three. Document market enquiry results and place potential industry sources.	3. PM and LSE identify programmatic and technical information needed and assist in evaluating the results.
four. Prepare a Purchase Asking, including production descriptions; priorities, allocations and allotments; compages; authorities-furnished property or equipment (or Government-Off-The-Shelf (GOTS); government-furnished information; data balls and security considerations; and required delivery schedules.	4. PM and LSE ensure the specific programmatic and technical needs are defined conspicuously (e.g., commercial-off-the-shelf (COTS) products).
5. Identify acquisition streamlining approach and requirements, budgeting and funding, management information requirements, environmental considerations, offeror'southward expected skill sets, and milestones. These should be addressed in the Acquisition Strategy.	five. The procurement team work together, but the CO has the prime responsibility. The PM is the possessor of the program Acquisition Strategy. The LSE develops and reviews (and the PM approves) the technical strategy.
half dozen. Plan the requirements for the contract Statement of Objectives (SOO) / Statement of Work (SOW) / specification, projection technical reviews, acceptance requirements, and schedule.	6. LSE is responsible for the evolution of the technical aspects of the SOO/SOW.
7. Plan and conduct Industry Days as appropriate.	vii. PM and LSE support the CO in planning the meeting agenda to ensure technical needs are discussed.
8. Establish contract cost, schedule, and performance reporting requirements. Determine an incentive strategy and appropriate mechanism (e.g., Laurels Fee Plan and criteria).	8. LSE provides technical resource estimates. LSE supports development of the Work Breakdown Structure (WBS) based on preliminary system specifications, determines event-driven criteria for key technical reviews, and determines what technical artifacts are baselined. The PM and LSE suggest the CO in developing the metrics/criteria for an incentive mechanism.
nine. Identify data requirements.	9. LSE identifies all technical Contractor Data Requirements List (CDRL) and technical performance expectations.
10. Establish warranty requirements, if applicable.	10. LSE works with the CO to determine cost-effective warranty requirements.
11. Prepare a Source Selection Program (SSP) and RFP (for competitive contracts).	11. PM and LSE provide input to the SSP per the SOO/SOW.
12. Conduct source selection and award the contract to the successful offeror.	12. PM and LSE participate on evaluation teams.

Offeror and Supplier Interactions

There should be an environment of open up communication prior to the formal source selection procedure. This ensures that the supplier understands the offeror's requirements and that the offeror understands the supplier's capabilities and limitations, equally well as enhancing the supplier'due south involvement in the development of a plan acquisition strategy. During the pre-solicitation phase, the offeror develops the solicitation and may ask suppliers to provide important insights into the technical challenges, program technical approach, and central business organisation motivations.

For example, potential bidders could be asked for their cess of a proposed system'due south performance based on the maturity level of new and existing technologies.

Contracts and Subcontracts

Typical types of contracts include the following:

Fixed Price: In a stock-still cost contract the offeror proposes a unmarried price for all products and services to implement the project. This single price is sometimes referred to as depression bid or lump sum. A fixed price contract transfers the projection risks to the supplier. When at that place is a cost overrun, the supplier absorbs it. If the supplier performs better than planned, their profit is higher. Since all risks are absorbed past the supplier, a fixed price bid may be higher to reflect this.

Price-reimbursement [Cost plus]: In a cost-reimbursement contract the offeror provides a fixed fee, simply also reimburses the contractor for labor, material, overhead, and administration costs. Cost-reimbursement type contracts are used when there is a loftier level of project run a risk and doubtfulness. With this type of contract, the risks reside primarily with the offeror. The supplier gets reimbursed for all of its costs. Additional costs that arise due to changes or rework are covered by the offeror. This blazon of contract is often recommended for the organisation definition of hardware and software development when there is a risk of stakeholder changes to the system.

Subcontracts: A subcontractor performs work for some other company as office of a larger projection. A subcontractor is hired by a full general contractor (also known as a prime or master contractor) to perform a specific set of tasks as part of the overall project. The incentive to hire subcontractors is either to reduce costs or to mitigate project risks. The systems engineering squad is involved in establishing the technical contract requirements, technical option criteria, acceptance requirements, and the technical monitoring and command processes.

Outsource contracts: Outsourced contracts are used to obtain appurtenances or services past contracting with an outside supplier. Outsourcing usually involves contracting a business concern part, such as software pattern and code development, to an external provider.

Exclusively Commercial Off-the-Shelf (COTS): Exclusively COTS contracts are completely satisfied with commercial solutions that crave no modification for use. COTS solutions are used in the environs without modifying the COTS organisation. They are integrated into an existing user'southward platform or integrated into an existing operational environs. The systems engineering team is involved in establishing the technical contract requirements, technical acceptance, and technical selection criteria.

Integrated COTS: Integrated COTS contracts use commercially available products and integrate them into existing user platforms or operational environments. In some cases, integrated COTS solutions modify the system's solution. The cost of integrating the commercial COTS product into the operational environs tin can exceed the price of the COTS production itself. As a event, the systems engineering science team is unremarkably involved in establishing the technical outsourcing contract requirements, technical option criteria, technical monitoring and control processes, and technical acceptance and integration processes.

COTS Modification: COTS modification requires the about time and cost considering of the additional work needed to modify the COTS production and integrate information technology into the organization. Depending on how complex and critical the need is, the systems engineering squad is usually involved in establishing the technical outsource contract requirements, technical selection criteria, technical monitoring and control processes, and technical credence requirements.

Information technology services: Information technology services provide capabilities that tin can enable an enterprise, application, or Web service solution. Information technology services tin be provided past an outsourced service provider. In many cases, the user interface for these Web services is as simple as a Web browser. Depending on how complex and critical the needs are, the systems engineering team tin be involved in establishing the technical outsourcing contract requirements, technical selection criteria, and technical acceptance process.

References

Works Cited

DAU. 2010. Defense Acquisition Guidebook (DAG). Ft. Belvoir, VA, USA: Defense Acquisition University (DAU)/US Department of Defense (DoD).

DoD. 2011. Systems Engineering Plan (SEP) Outline. Washington, DC, Us: Office of the Undersecretary of Defense for Conquering, Transportation, and Logistics (AT&Fifty), The states Department of Defence force (DoD).

DoD. 2006. Guide for Integrating Systems Applied science into DoD Acquisition Contracts. Washington, DC, USA: Office of the Undersecretary of Defense for Acquisition, Transportation, and Logistics (AT&L), U.s. Section of Defense (DoD).

DoD. 2001. Systems Technology Fundamentals. Washington, DC, USA: Defence Acquisition University Press/US Section of Defense.

Primary References

DAU. 2010. Defense force Conquering Guidebook (DAG). Ft. Belvoir, VA, USA: Defense force Acquisition Academy (DAU)/US Section of Defense (DoD).

DoD. 2011. Systems Technology Plan (SEP) Outline. Washington, DC, Us: Office of the Undersecretary of Defense force for Acquisition, Transportation, and Logistics (AT&50), U.s. Section of Defense (DoD).

DoD. 2006. Guide for Integrating Systems Engineering into DoD Acquisition Contracts. Washington, DC, United states of america: Office of the Undersecretary of Defense for Conquering, Transportation, and Logistics (AT&L), US Department of Defense force (DoD).

Additional References

MITRE. 2011. "Conquering Systems Engineering." Systems Engineering Guide. Accessed March 9, 2012. Bachelor: http://world wide web.mitre.org/piece of work/systems_engineering/guide/acquisition_systems_engineering/.

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