Lesson 4: Acquisition Strategies

Lesson 4: Acquisition Strategies
February 2017 Lesson 4: Acquisition Strategies

Contracting Process for Acquisitions
Pre-Solicitation Solicitation-Award Post-Award Pre-Solicitation Solicitation-Award Post-Award Initial Planning/Form the Team Solicitation (RFQ, IFB, RFP) Monitor Performance Market Research Evaluation Deliverables Payments Define Requirements (PWS, SOW, SOO) Negotiation The activities covered in this lesson refer to the aspects boxed in red in the Pre-Solicitation Phase of the Contracting Process for Acquisitions. The SBP can be involved in any aspect of an acquisition, either directly or in an advisory role. Acquisition Business Strategy Award Closeouts 4-2

Contracting Process for Acquisitions Process Flow
General Rule: The contracting process for acquisitions diagram on the preceding slide is generalized for teaching purposes in the small business courses and not specific to governing policies and regulatory requirements for any specific type of acquisition (DoDI (ACATs); DoDI (Services) and others). SBPs must understand the type of acquisition applicable to any new and/or recurring requirements and follow those governing policies and regulations accordingly. Pre-Solicitation Solicitation-Award Post -Award Phase begins with valid acquisition need driving initial planning and team formation Phase ends with acquisition strategy (AS) that is documented in an Acquisition Plan (AP) Phase begins with clearly defined Acquisition Strategy and Acquisition Plan These may or may not be approved, but guide development of Solicitations and Source Selection Plans (SSP) DoD Peer Reviews occur prior to obtaining approval to issue a solicitation Decision Point: Approval to issue Solicitation Policy requires prior written approvals of AS, AP, SSPs, DoD Peer Reviews, if any Exchanges with Industry: Tightly controlled upon issuance of Solicitation through Award of contract(s) Phase ends when a source selection decision is acted upon via award of the contract(s) Phase begins after the competitively negotiated contract(s) is awarded Phase ends when all contract performance is complete and contract(s) closeout actions are completed We are here This Process Flow is generalized for teaching purposes in the small business courses and is not specific to governing policies and regulatory requirements for any specific type of acquisition. Lesson 4 will focus on material in the BLUE font. Intermediate Small Business Programs, Part B Acquisition Strategies

SBP’s Role in Acquisition Strategy
When should an SBP get involved in an acquisition? And why? Intermediate Small Business Programs, Part B Acquisition Strategies

Terminal Learning Objective
Devise an appropriate Acquisition Strategy to maximize small business utilization Intermediate Small Business Programs, Part B Acquisition Strategies

Enabling Learning Objectives
Analyze draft requirements (Performance Work Statement (PWS) and Acquisition History Summary) for an acquisition Identify barriers or other risks that impede small business utilization at the prime and subcontracting levels Develop effective mitigating strategies, including recommended market research tools and techniques, to support your mitigation Develop an overall small business strategy that maximizes small business utilization Ref: SBP 201, Lesson 3.1, Barriers and Mitigation Intermediate Small Business Programs, Part B Acquisition Strategies

SBP Review Presentation: Acquisition Strategies
SBP 201 Module 3: The Small Business Professional SBP 201 Module 4: Acquisition Planning SBP 201 Module 6: Evaluation and Source Selection Intermediate Small Business Programs, Part B Acquisition Strategies

Acquisition Strategies
Additional Q & A Intermediate Small Business Programs, Part B Acquisition Strategies

Analyzing Draft Requirements Documents (PWS and Acquisition History Summary) You have received draft requirements documents You want to maximize small business utilization in the acquisition What types of information should you look for in the documents? Intermediate Small Business Programs, Part B Acquisition Strategies

Analyzing Draft Requirements Documents
Products and/or Services Commercial or NDI Acquisition Type Dollar Value Period of Performance Place of Performance Acquisition History NAICS Code/Size Std Capabilities Needed Single or Multiple Awards Possibility of Break-Outs Certification Requirements Security Clearance Rqmts Unduly Restrictive Rqmts Consolidation and/or Bundling Risk Factors - Others SBPs should look for the following information when analyzing draft requirements documents: Product and/or service type (what are you procuring?) Is this a commercial or non-developmental item (NDI) product or service? Acquisition type, dollar value, period of performance, place of performance Acquisition history (first time or recurring buy; if recurring, what was prior NAICS code/size standard?); method of procurement (unrestricted; set-aside (socioeconomic category – competitive or sole source) Proposed NAICS code and size standard What capabilities are needed to deliver the product and/or service? Single or multiple awards? If IDIQ, was preference given for multiple awards (FAR (c)(1)(i)? If multiple awards, does the Rule of 2 apply (total set-aside), or can it be partially set aside (FAR )? If single award and not a total set-aside, can components and/or portions of the work be broken out (partial set-aside)? Can unduly restrictive requirements be mitigated (i.e., certifications, security clearances, etc., which can be barriers that impede small business utilization)? Are there consolidation and/or bundling considerations (i.e., governmental policies may introduce barriers which SBPs/PCRs assist to mitigate, as is the case with strategic sourcing, which often drives consolidation and/or bundling)? Risk factors (any others that may impact small business utilization such as contract types (Fixed-Price-cash flow concerns/contractor payments; Cost Reimbursement-suitability of accounting systems))? Ref: SBP 201, Lesson 4.1, Market Research Analysis Intermediate Small Business Programs, Part B Acquisition Strategies

Consolidation and Bundling Definitions
Consolidation of Contract Requirements DFARS * “The use of a solicitation to obtain offers for a single contract or a multiple-award contract to satisfy two or more requirements of a department, agency, or activity for supplies or services that previously have been provided to, or performed for, that department, agency, or activity under two or more separate contracts.” * Implements 10 USC 2383 Bundling FAR 2.101* “Consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern.” * See full definition in FAR 2.101 “Consolidating” as inferred from the FAR definition for bundling has no association with the DoD definition for consolidation (DFARS ) which implements 10 USC 2382. Intermediate Small Business Programs, Part B Acquisition Strategies

Analysis for Consolidated Acquisitions
For consolidated acquisitions > $2 million, the Acquisition Strategy must include (DFARS (a)): Market research results Identification of any alternative contracting approaches with less consolidation A determination by the senior procurement executive that the consolidation is necessary and justified. The benefits of the proposed Acquisition Strategy must ‘substantially exceed’ the benefits of each of the alternative strategies DoD Class Deviation 2013-O0021 lowers the dollar threshold from $6 million to $2 million. For the consolidation to be necessary and justified, an analysis must be conducted to demonstrate that the benefits accruing from the proposed Acquisition Strategy “substantially exceed” the benefits of each of the alternative strategies. The SBP and the PCR should be involved in helping to maximize small business utilization in the acquisition. The Agency OSBP Director reviews and coordinates on justifications for bundling and consolidation (DoDI , Enclosure 2, paragraph 2(i)(2)) when they rise to the Agency level. Component OSBP Directors and local SBPs may also have departmental or activity-level policies requiring the same. Intermediate Small Business Programs, Part B Acquisition Strategies

Benefits Analysis for Bundled Acquisitions
For any bundled acquisition, the Contracting Officer must document ‘measurably substantial benefits’ equivalent to (FAR (d)): Ten percent of the estimated contract or order value (including option) if the value is $94 million or less, or Five percent of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million Small Business Prime According to FAR (a) market research must be conducted for any bundled acquisition to determine if the bundling is necessary. Justification and determination of bundling must occur regardless of the dollar value of the acquisition. FAR (c) and (d) defines minimum benefits that must accrue from the bundling for the agency to determine bundling to be necessary and justified. Note the exception in FAR (f). Intermediate Small Business Programs, Part B Acquisition Strategies

Substantial Bundling When the bundled acquisition is $8M or more, the Acquisition Strategy must also (FAR (a): Identify specific benefits from bundling Include the specific impediments to participation by small business concerns Specify actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming Specify actions designed to maximize small business participation as subcontractors Include a justification and determination Identify alternative strategies and the rationale for not choosing those alternatives Intermediate Small Business Programs, Part B Acquisition Strategies

Notices for Bundled Acquisitions
FAR (c) If an agency contemplates awarding a bundled contract, the agency — (1) When performing Market Research, should consult with the local Small Business Administration procurement center representative (PCR). If a PCR is not assigned, see ; and (2) Shall notify any affected incumbent small business concerns of the Government’s intention to bundle the requirement and how small business concerns may contact the appropriate SBA PCR (see FAR (a). FAR (a) 1. The contracting officer shall notify each small business performing a contract that it intends to bundle the requirement at least 30 days prior to the issuance of the solicitation for the bundled requirement. Intermediate Small Business Programs, Part B Acquisition Strategies

Notices for Bundled Acquisitions (cont’d.)
DFARS Notification of bundling of DoD contracts. (a) When a proposed acquisition is funded entirely using DoD funds and potentially involves bundling, the Contracting Officer shall, at least 30 days prior to the release of a solicitation or 30 days prior to placing an order without a solicitation, publish in FedBizOpps.gov (or any successor site) a notification of the intent to bundle the requirement. In addition, if the agency has determined that measurably substantial benefits are expected to be derived as a result of bundling, the notification shall include a brief description of those benefits (see FAR 7.107) (b) This requirement is in addition to the notification requirements at FAR (c)(2)(i) and (ii) - see notes pages- Please note that the DFARS (b) incorrectly states FAR (c)(2)(1) and (ii). This should say FAR Intermediate Small Business Programs, Part B Acquisition Strategies

Role of SBP When an acquisition may involve consolidation and/or bundling, the SBP should: Involve the SBA PCR during market research Participate and assist in market research to determine whether alternative approaches exist Educate acquisition team, including concerns about 8(a) requirements (FAR (c)) Devise strategies to maximize small business utilization Review/coordinate on mandated notifications for bundled contracts (FAR and DFARS ) Review/coordinate on justifications for consolidation and/or bundling (DFARS and DoDI , Enclosure 2, paragraph 2(i)) DFARS incorrectly states FAR (c)(d)(i) and (ii) for notifications. Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.1 Acquisition Situation - IT Enterprise Support Services
A strategic sourcing initiative has been approved that consolidates all like requirements under an IT enterprise support agreement. The Strategic Sourcing Opportunity Assessment, Spend Analysis, and Market Research on alternative approaches to tactical buying methods and the development of a sourcing strategy are complete. A draft Performance Work Statement has been developed to initiate the acquisition process Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.1 Instructions
Analyze: PWS (Focus on Section 3 (General Information) and Section 5 (Security)) Acquisition history summary Answer the questions in the Requirements Analysis Worksheet Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.1: Rubric You will use the activity rubric which identifies desired behaviors to rate your performance Learning Objectives: Review a draft requirements document (PWS) and Acquisition History Summary for an approved strategic sourcing initiative. Identify barriers to maximizing small business utilization. Directions: As you complete this activity, rate yourself on how effectively you demonstrated the desired behaviors. Add comments to clarify your self-assessment, especially in areas in which you feel you need further development. You can refer to these notes as you complete your Action Plan at the end of the lesson to help you identify the things you might do differently. . Include additional comments regarding your performance in the Notes area below: Desired Behaviors Analyze a draft requirements document (PWS) and acquisition summary and extract relevant information Participate in team discussions Respond to questions thoughtfully and creatively Desired Behaviors Rating Rate how effectively you demonstrated each behavior: 1 – Poor 2 – Fair 3 – Neutral 4 – Good 5 – Excellent Comments Review a draft requirements document (PWS) and acquisition summary and extract relevant information 1 2 3 4 5 Participate in team discussions Respond to questions thoughtfully and creatively Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.1 Key Points Early engagement during the pre-solicitation phase is where SBPs have the greatest ability to persuade and influence teams in pursuing creative, win-win Acquisition Strategies When analyzing draft requirements documents, SBPs should look closely at the information provided, including the product/service, acquisition history, NAICS code/size standard, and performance parameters, so that all capable small businesses are afforded maximum opportunities to participate in the acquisition as prime contractors (first choice) and subcontractors Intermediate Small Business Programs, Part B Acquisition Strategies

Identifying Barriers and Other Risks
SBPs must proactively identify barriers and other risks that impede small business utilization. This happens early in the contracting process, beginning with the requirements documents review and analysis Once they are identified, the barriers and other risks can be mitigated Intermediate Small Business Programs, Part B Acquisition Strategies

Possible Barriers and Other Risks
Barriers and other risks include: Restrictive licensing and security clearance requirements Limitations in access to capital Limitations on subcontracting Strategic sourcing policy mandates Intermediate Small Business Programs, Part B Acquisition Strategies

Using your completed Requirements Analysis Worksheets and the supporting requirements documents (PWS and Acquisition History Summary) from Activity 4.1, identify barriers and other risks that may impede small business utilization Complete the Barriers and Other Risks Worksheet Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.2: Rubric You will use the activity rubric which identifies desired behaviors to rate your performance Learning Objectives: Review a draft requirements document (PWS) and Acquisition History Summary for an approved strategic sourcing initiative. Identify barriers to maximizing small business utilization. Directions: As you complete this activity, rate yourself on how effectively you demonstrated the desired behaviors. Add comments to clarify your self-assessment, especially in areas in which you feel you need further development. You can refer to these notes as you complete your Action Plan at the end of the lesson to help you identify the things you might do differently. Include additional comments regarding your performance in the Notes area below: Desired Behaviors Identify barriers and other risks that inhibit or preclude small businesses participation Participate in team discussions Respond to questions thoughtfully and creatively Desired Behaviors Rating Rate how effectively you demonstrated each behavior: 1 – Poor 2 – Fair 3 – Neutral 4 – Good 5 – Excellent Comments Identify barriers and other risks that could inhibit or preclude small businesses participation 1 2 3 4 5 Participate in team discussions Respond to questions thoughtfully and creatively Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.2 Key Points Identification of barriers and other risks that impede small business utilization must occur thoughtfully and early in the Pre-Solicitation Phase If the SBP is not engaged early, there will likely be a lack of team awareness regarding impediments, resulting in improper acquisition planning and no time to mitigate later Intermediate Small Business Programs, Part B Acquisition Strategies

Mitigating Barriers and Other Risks
You as the SBP need to figure out ways to mitigate each of the identified barriers or other risks Try to find ways for small businesses to be prime contractors, not just subcontractors After you have identified barriers and other risks that impede small business utilization, you as the SBP need to figure out ways to mitigate each of the identified barriers or other risks. Mitigation means lessoning the force or intensity of the barrier or risk to enable development of a win-win strategy that maximizes small business utilization. It is important to find ways for small businesses to be prime contractors, not just subcontractors. In an acquisition involving an approved consolidation determination, such as this one in Lesson 4, the determination was approved because small business prime contract opportunities still exist. Intermediate Small Business Programs, Part B Acquisition Strategies

Multiple Award Contracts (MACs) and Small Business Set-Asides using IDIQ Contracts Small Business Set-Aside Authorities FAR (total set-asides) FAR (partial set-asides) FAR (MACs and set-asides) (key note: full & open MACs) Rule of 2 Applies Market Research Determines the Set-Aside Authority to use One of the key issues in this acquisition is whether to use a single-award Indefinite Delivery Indefinite Quantity (IDIQ) contract or a multiple-award contract (MAC), IDIQ arrangement. The given information expresses a desire of the customer only. As an SBP, you must ensure policy compliance over customer desires whenever there is a conflict. FAR (c) implements the statutory preference for using MAC IDIQ contracts in lieu of single-award IDIQs. There is a stringent waiver process if the customer can justify that noncompliance is in the best interest of the Government. Since they didn’t, the MAC IDIQ preference applies to this new acquisition. The Rule of 2 must be applied for new MAC IDIQ acquisitions; market research will determine applicable set-aside authority. FAR (total set-aside) — requirement can be met by small businesses. FAR (partial set-aside) — requirement cannot be met fully by small businesses. In large dollar acquisitions, this is generally due to capacity needs, but may also stem from a lack of small business capability to meet 100 percent of the PWS tasks/functions. FAR (full and open (F&O) MACs and set-asides) — neither of the above is feasible and a full and open MAC IDIQ Acquisition Strategy is permissible. Contracting officers may reserve one or more IDIQ contracts for small businesses in the event that small business proposals are received. Intermediate Small Business Programs, Part B Acquisition Strategies

Total or Partial Set-Asides – When Used
Used when Market Research indicates: Acquisition can be fully satisfied by small business primes (Rule of 2 met) Acquisition cannot be fully satisfied by small businesses, but can be broken into smaller, discrete portions (Rule of 2 met for set-aside portion(s)) Total Set-Aside Partial Set-Aside Full and Open In total set-asides, the single solicitation will be restricted to small businesses (FAR applies). The single solicitation for partial MAC IDIQ set-asides will also include an unrestricted portion (non-set-aside). Market research will be essential to devise appropriate strategies. Intermediate Small Business Programs, Part B Acquisition Strategies

Partial Set-Asides – How Implemented
Contracting Officer issues a single Solicitation as Partial Set-Aside Solicitation includes a set-aside portion and a non-set-aside, unrestricted portion Solicitation must explicitly state requirements/procedures (i.e., task ordering/award procedures, set-aside and unrestricted competition pool requirements/procedures, etc.) Competition Pools Set-Aside Pool Parity applies to the set-aside portion (FAR ). Partial set-asides may be required to meet capacity when the volume or quantity demands cannot be fully satisfied by small businesses, or when small businesses cannot meet 100 percent of the PWS requirements but can meet portions of the PWS (capability). As an SBP, you may need to assist in figuring out some of the implementation details based on market research data. For example, How many MAC IDIQs are needed to meet capacity? How many can be set aside for small businesses? Can small businesses also compete for orders in the unrestricted competition pools? If so, how will this work specifically and be detailed appropriately in solicitation and resulting contract? Will small businesses outgrow their size status during the performance period (FAR ) and is mitigation required? For mitigation, MAC decision points (on ramps/off ramps) must be included for services acquisitions (see DoD Services Acquisitions Peer Review Criteria Checklist). If small businesses are not capable of performing 100 percent of the PWS, can you incorporate set-asides via established minimum dollar value thresholds and/or for specific portions of the PWS? Unrestricted Pool (F&O) Intermediate Small Business Programs, Part B Acquisition Strategies

F&O MAC IDIQ Reserves – When Used
New Acquisitions (FAR ) Market Research indicates Rule of 2 not met for a total or partial set-aside MAC IDIQ Contracting Officer may pursue F&O MAC IDIQ with Reserves for set-asides at the order level (i.e., function as a contingency in event that small business awards materialize) The Contracting Officer may reserve one or more IDIQ contracts to facilitate order-level set-asides in the event that small business proposals are received and awardable. In essence, F&O MAC IDIQ Reserves are contingencies, because market research determined that the Rule of 2 was not met for a total or partial MAC IDIQ set-aside strategy. When Reserves are used in an F&O MAC IDIQ strategy, the solicitation must account for this contingency by explicitly stating all requirements/procedures necessary to proceed in the event that any small business MAC IDIQ proposals are received and awardable. Intermediate Small Business Programs, Part B Acquisition Strategies

F&O MAC IDIQ Reserves – When Used
Existing Acquisitions (FAR ) Terms and conditions of existing contracts govern if Reserves are applicable Intermediate Small Business Programs, Part B Acquisition Strategies

Reserves – How Implemented
The single solicitation and model contract terms and conditions must include Reserve requirements and explicitly state how they will be implemented in the event of any small business awards (i.e., competition pools, ordering procedures such as fair opportunity, set-asides, etc.)(FAR ) Intermediate Small Business Programs, Part B Acquisition Strategies

Market Research and Mitigation
Use market research to obtain industry feedback on each barrier or risk Use iterative feedback to refine / adapt requirements (mitigate) Must occur early during the Pre-Solicitation Phase SBP engagement a must To mitigate barriers or other risks, you need to conduct very focused market research and obtain Industry feedback on each impediment. Iterative rounds of market research and industry feedback are generally needed to begin refining and adapting requirements for mitigation. This iterative process enables the Government to devise creative win-win strategies to increase small business utilization (prime contracts and subcontracting). If the SBP is not proactive and engaged early, the team may not realize there are small business impediments and do nothing. Early engagement during the Pre-Solicitation Phase is where SBPs have the greatest ability to persuade and influence teams in mitigating barriers and other risks to ensure maximum small business utilization. Intermediate Small Business Programs, Part B Acquisition Strategies

Market Research Tools and Techniques
What market research tools and techniques might be helpful to gather information from industry to mitigate barriers and other risks? Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.3: Create Mitigation Strategies
In the Mitigation Strategies Worksheet, for each barrier or other risk factor identified in Activity 4.2, describe: Market research methods to gather the information needed to mitigate the risk factor or barrier Possible mitigation strategies to address the risk factor or barrier Intermediate Small Business Programs, Part B Acquisition Strategies

Mitigation Strategies Worksheet
Barrier(s)/Other Risk(s) Market Research Techniques / Methods Potential Mitigation Strategies 100% PWS requirements must be met (capability) by each prime contractor [ example entry ] Internal: Get with team/PM to challenge why a prime must have capability to perform 100% of PWS. [THINGS TO CONSIDER: Will every task order require 100% PWS tasks/functions? Not likely. Historical market/contract data should reveal trending as this is a ‘consolidation’ and there were prior small business contracts. SBPs, could start here in advocating for partial set-asides. Set-asides could be minimum dollar-based thresholds and/or by specific work task/PWS section.) External: Issue Requests for Information (RFI) for Industry feedback on small business capabilities for draft PWS. [THINGS TO CONSIDER: Industry feedback is needed to confirm whether your perceived barriers and other risks are also viewed this way given industry perspectives/capabilities. This may require a series of iterative RFIs consistent with acquisition circumstances, but ultimately the feedback will help the team refine/reshape requirements (mitigation). Establish MAC IDIQ with partial set-asides based on iterative internal/external feedback. A partial MAC IDIQ set-aside will have a set-aside portion(s) and an unrestricted (F&O) portion. Mitigation Requires: Refine requirements/establish set-aside parameters consistent with acceptable government risk/small business capabilities Continue market research by issuing draft solicitation parts to ensure industry buy-in on refined requirements and associated implementation strategies. This is an iterative process and will help in development of final acquisition strategy and solicitation. In Activity 4.2, one of the identified barriers was the requirement that prime contractors meet 100 percent of the requirements. Possible Market Research methods include: Initiating internal discussions with the PM and technical team to challenge whether small businesses must meet 100 percent of PWS (i.e., individual orders rarely require primes to perform 100 percent of PWS in a single order) Issuing RFI(s) to industry to determine whether small businesses are capable of meeting 100 percent of PWS Conducting Industry Days for the acquisition Potential mitigation strategies: If the acquisition cannot be a total set-aside, devise ways to enable a partial set-aside. Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.3: Rubric You will use the activity rubric which identifies desired behaviors to rate your performance Learning Objectives: Develop effective mitigation strategies, including market research tools and techniques recommended to support your mitigation. Directions: As you complete this activity, rate yourself on how effectively you demonstrated the desired behaviors. Add comments to clarify your self-assessment, especially in areas in which you feel you need further development. You can refer to these notes as you complete your Action Plan at the end of the lesson to help you identify the things you might do differently. Include additional comments regarding your performance in the Notes area below: Desired Behaviors Applies information from requirements analysis (identification of barriers), Activities 4.1/4.2 Develops effective mitigation strategies, including selecting market research tools and techniques and identifying types of requirements that need refined/reshaped for win-win outcomes Participates in team discussions Responds to questions thoughtfully and creatively Desired Behaviors Rating Rate how effectively you demonstrated each behavior: 1 – Poor 2 – Fair 3 – Neutral 4 – Good 5 – Excellent Comments Applies information from requirements analysis (identification of barriers), Activities 4.1/4.2 1 2 3 4 5 Develops effective mitigation strategies, including selecting market research tools and techniques and identifying types of requirements that need refined/reshaped for win-win outcomes. Participates in team discussions Responds to questions thoughtfully and creatively Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.3 Key Points Use data-driven market research tools and techniques, including sufficient Industry inquiries/ feedback to refine requirements and increase small business interest and participation in the acquisition (set-asides and subcontracting) SBPs must engage early and recognize barriers to small business utilization to advocate for mitigation and assist teams in devising win-win strategies Consolidated acquisitions bring additional risks that SBPs need to recognize and mitigate through alternative approaches and strategies Intermediate Small Business Programs, Part B Acquisition Strategies

Develop Acquisition Strategy Recommendations
SBPs must be able to: Analyze the acquisition information and market research results to refine requirements and develop an Acquisition Strategy that meets stated needs and maximizes small business utilization After the acquisition team conducts market research, SBPs help analyze the acquisition information and market research results. The analysis helps to: Determine the way forward in terms of refining requirements for mitigation of any barriers or risks Enable development of win-win acquisition strategies to maximize small business utilization Market research occurs concurrently with other acquisition planning activities. Intermediate Small Business Programs, Part B Acquisition Strategies

What Is an Acquisition Strategy?
The Program Manager’s plan for program execution across the entire program life cycle. It is a comprehensive, integrated plan that identifies the acquisition approach and key framing assumptions, and describes the business, technical, and support strategies that the Program Manager plans to employ to manage program risks and meet program objectives (DoDI ) Intermediate Small Business Programs, Part B Acquisition Strategies

Acquisition Strategy Considerations
What should you consider in developing your small business Acquisition Strategy recommendations? Intermediate Small Business Programs, Part B Acquisition Strategies

Acquisition Strategy Considerations
Total or partial set-asides (single awards or MACs)? Statutory preference for MAC IDIQs appropriately considered or waived before pursuing a single-award IDIQ? F&O MAC IDIQs with Reserves? Subcontracting? Incentives? Barriers – Mitigation? Does market research support a total or partial set-aside for IDIQ contracts — single-award or multiple-award contracts (MACs)? Has the statutory preference for MAC IDIQs been appropriately considered or waived before pursuing a single-award IDIQ? If the acquisition is a F&O MAC IDIQ, are Reserves contemplated? How can small business utilization be maximized through subcontracting? Can incentives (monetary or nonmonetary) be used to increase small business utilization? Are there any barriers that impede small business utilization and how can they be mitigated? Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Subcontracting Plan Requirement and Assessment
FAR requires that all negotiated and sealed bid acquisitions that are expected to exceed $700,000 ($1.5 million for construction) and that have subcontracting possibilities, shall require the apparently successful offeror/ bidder selected for award to submit an acceptable Small Business Subcontracting Plan (see FAR (b) for exceptions) Small Business Subcontracting Plan We have discussed how small business utilization can be maximized at the prime contract level (set-asides) and use of Reserves for F&O MAC IDIQ contracts. Now we will focus on how to maximize small business utilization at the subcontracting level. When you hear “subcontracting,” probably the first thing you think about is a subcontracting plan: Required for all negotiated and sealed-bid acquisitions expected to exceed $700,000 ($1.5 million for construction) and that have subcontracting possibilities You can require all large business offerors or bidders to submit subcontracting plans with their proposals, but you only need to assess the one(s) of the apparently successful offeror(s). Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Participation Requirement and Evaluation
FAR (c)(5) requires evaluation of small business participation for solicitations involving bundling DFARS (c) requires evaluation of small business participation in other than LPTA source selections whenever a Small Business Subcontracting Plan is required Note: Though evaluation of small business participation is not required for LPTA source selections, it is permissible. See the Source Selection Procedures Appendix C (C.4) The solicitation requirements and model contract must include all small business participation requirements, which we will discuss next. Intermediate Small Business Programs, Part B Acquisition Strategies

SB Subcontracting Plan and Evaluating SB Participation
Should a Small Business Subcontracting Plan be used to evaluate small business participation? To evaluate small business participation, we need to ask offerors to provide information about their planned subcontracting and then evaluate it. Should we use the Small Business Subcontracting Plan for this purpose? Intermediate Small Business Programs, Part B Acquisition Strategies

SB Subcontracting Plan vs. SB Participation
SB Subcontracting Plan (Requirements/Assessment) SBPCD SB Participation (Requirements/Evaluation) FAR 19.7 FAR , DFARS Must be negotiated and determined acceptable by the Contracting Officer Solicitation establishes requirements and evaluation criteria for SB participation Must have 15 elements defined in FAR *(DFARS Deviation 2016 O0009) Evaluation conducted IAW solicitation evaluation criteria Required for all Federal contracts (subject to dollar limitations and exceptions) and includes both negotiated and sealed bidding Required only for bundled contracts or certain DoD negotiated acquisitions Does not apply to small businesses Applies to all businesses Based on total planned subcontracting dollars DoD best practice MQR% (if appropriate) based on total contract value (TCV) (dollars) Even though many people in DoD have been using Small Business Subcontracting Plans to evaluate small business participation, that is NOT correct. There are many differences between assessing a subcontracting plan and evaluating small business participation. Requirements for Small Business Subcontracting Plans are in FAR Subpart 19.7 and FAR (note DFARS deviation which requires use of the DFARS Deviation 2016 O0009 in lieu of FAR ) and must be fully addressed for plan acceptability. They do not apply to small business concerns. Government subcontracting quantitative objectives (subcontracting goals) are established through market research; offerors propose goals that are based on total planned subcontracting dollars per FAR Subpart The governments quantitative objectives can be used to determine/negotiate the acceptability of offerors proposed subcontracting goals. Requirements for evaluating small business participation are in FAR and DFARS The acquisition team has flexibility in determining how to implement solicitation requirements and evaluation factors or subfactors as appropriate for the circumstances of the acquisition. These must be stated in the solicitation and model contract when binding. The DoD Best Practice refers to the offerors’ small business participation proposal document as the Small Business Participation Commitment Document (SBPCD) (formerly SB Participation Plan). These are applicable to both other than small and small businesses. Market research must be accomplished to determine what level of participation is feasible for the market sector. This enables establishment of a minimum quantitative requirement (MQR) based on the total contract value (dollars) and any other desired participation requirements. FAR (a)(5) states that solicitations must be structured to give offers from small business concerns the highest rating for the evaluation factors in 15.304(c)(3)(ii) and (c)(4). Requiring SBPCDs from both other than small and small businesses enables a level playing field for evaluating small business participation. Making commitments contractually binding where applicable drives improved contractor accountability and helps small business concerns build stronger past performance history for future competitive opportunities. Any overlapping content between an other than small businesses SB subcontracting plan and SBPCD must be consistent. This ensures proposal realism and accuracy. Intermediate Small Business Programs, Part B Acquisition Strategies

Mandate for Separation SB Subcontracting Plans and SBPCDs
Assessment of a Small Business Subcontracting Plan and evaluation of SBPCDs are two separate yet related areas. They are treated differently in solicitations, during source selection, and in awards DFARS (c)(i)(B) states that proposals addressing the extent of small business performance shall be separate from Small Business Subcontracting Plans submitted pursuant to the clause at FAR and shall be structured to allow for consideration of offers from small businesses Why must assessment of an SB subcontracting plan and evaluation of an SBPCD be separate? While contracting generally requires an SB subcontracting plan from all other than small business offerors, the FAR states that only the apparently successful offeror’s plan should be assessed for compliance with FAR As such, there is no need for any evaluation criteria or evaluation by the Source Selection Evaluation Board. As a material part of any resultant contract, the Contracting Officer, with the assistance of the SBP and PCR, will assess the apparently successful offerors’ proposed SB subcontracting plan for compliance (acceptability). The Contracting Officer has the discretion to negotiate elements of the plan to make it acceptable if necessary. The SBPCD stems from solicitation requirements and is evaluated in accordance with the solicitation’s evaluation criteria. It is required for both other than small and small businesses. In the event of any other than small business SBPCD, overlapping content in their SB subcontracting plan must be consistent. DFARS makes it clear that evaluating small business participation proposals must be separate from Small Business Subcontracting Plans. Because we’ve done it incorrectly for so long — the two are like cousins that never should have been married and now need to get a divorce. Intermediate Small Business Programs, Part B Acquisition Strategies

DoD Best Practice – SBPCDs
Small Business Participation Commitment Document (SBPCD) (DFARS ) Names of subcontractors to be used and the products/services they are to provide (level of commitments… binding or not) Type and complexity of products/services to be provided by each subcontractor State extent of utilization quantitatively (i.e., MQR% based on TCV (dollars)) Periodic reporting requirements Others as necessary - Examples Only - Tailor to Acquisition DPAP Peer Review Best Practices, Lessons Learned, Recommendations (search on small business to see this DoD Best Practice) Small Business Subcontracting Plan Eleven elements IAW FAR 19.7 and (DFARS Deviation 2016 O0009) This DoD Best Practice has been used for some time and is recognized as such by DPAP. The terminology (SBPCD) is relatively new, based on DoD OSBP lessons learned to help standardize this DoD Best Practice. Formerly there were many efforts to follow this best practice, but terminology was nonstandard (i.e., small business participation plans, enhanced small business participation, etc.) and processes were not always correct. Students may visit the DPAP Peer Review site and search on “small business” to see documented comments as best practices: DPAP Peer Review Best Practices, Lessons Learned, Recommendations. SBPCDs are required of all offerors, including small businesses and offerors who have individual, commercial, or comprehensive subcontracting plans. The example content for an SBPCD is listed on the slide, but these are not inclusive and should be tailored to the acquisition circumstances. The requirements must be stated in the solicitation and model contract if binding. Evaluation criteria must discriminate adequately to ensure successful source selection outcomes. FAR (a)(5) states that solicitations must be structured to give offers from small business concerns the highest rating for the evaluation factors in 15.304(c)(3)(ii) and (c)(4). There are some differences that may require amplified instructions in the solicitation to ensure that small businesses stay on a level playing field with other than small businesses in the evaluation of SBPCDs (i.e., small businesses may not have CPARS records you can pull to evaluate past performance in SB participation, but they may have prior contract SBPCD reports they could submit with their proposed SBPCD if permitted to do so in solicitation). Intermediate Small Business Programs, Part B Acquisition Strategies

Similarities Small Business Subcontracting Plans & SBPCDs: Planned subcontracting dollars*, types of products/services should be consistent The Small Business Subcontracting Plan is contractually binding and incorporated fully into any resulting contract The SBPCD will include some contractually binding requirements and must be incorporated into any resulting contract * Subcontracting Plan goals based on ‘subcontracted’ dollars as denominator; SBPCD MQR% denominator is TCV (dollars) Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Participation Evaluation Criteria
DFARS PGI * Extent to which SB firms are specifically identified in proposals Extent of commitment to use such firms Complexity and variety of work Realism of the proposal Past performance of complying with subcontracting requirements Extent of participation of SB firms in terms of the value of the total acquisition * Other criteria may be used as appropriate for acquisition circumstances. * The instructions of the solicitation must establish the corresponding requirements for these evaluation criteria and any others you deem necessary These are the examples of small business participation evaluation criteria provided in DFARS PGI. They are not all-inclusive and should be customized to the needs of the particular acquisition. For each evaluation criterion, you must have corresponding solicitation requirements instructions. You must also consider which of these will be contractually binding and devise an approach for incorporation into solicitation (the model contract) and any resulting contract. Intermediate Small Business Programs, Part B Acquisition Strategies

Ways To Evaluate – Method 1
Method One - By establishing a separate small business participation evaluation factor Example: Section M – Evaluation Factors Factor 1 Technical Factor 2 Past Performance Factor 3 Small Business Participation Factor 4 Cost (Department of Defense Source Selection Procedures sections & ) There are three ways to evaluate small business participation. Intermediate Small Business Programs, Part B Acquisition Strategies

Method Two - By establishing a small business participation subfactor under the technical factor Example: Section M – Evaluation Factors Factor 1 Technical Subfactor a. Management Approach Subfactor b. Small Business Participation Intermediate Small Business Programs, Part B Acquisition Strategies

Method Three - By considering small business participation within the evaluation of a technical subfactor Example: Section M – Evaluation Factors Factor 1 Technical Subfactor a. Management Approach i. Consideration of small business participation Intermediate Small Business Programs, Part B Acquisition Strategies

Choosing Evaluation Method
How do you choose which of the three methods to recommend? Intermediate Small Business Programs, Part B Acquisition Strategies

Options for Rating Use ratings outlined in Table 6 of Source Selection Procedures Use rating of Acceptable or Unacceptable IAW Table 6 definitions Outstanding Good Acceptable Marginal Unacceptable OR Small business participation can be rated in one of two ways: Use adjectival ratings outlined in Table 6 of the DoD Source Selection Procedures (Section ) Use the ratings of Acceptable or Unacceptable only (DoD Source Selection Procedures, Section ) Rating option dependent upon evaluation method Intermediate Small Business Programs, Part B Acquisition Strategies

Reporting Requirements
What are the regulatory requirements for subcontracting reporting? Why require other than eSRS reporting? Intermediate Small Business Programs, Part B Acquisition Strategies

Contractually Binding Reporting Requirements – How To Implement
FAR Subpart 19.7 and FAR establish eSRS as the tool for Small Business Subcontracting Plan reporting SBPCD reporting requirements must be stated explicitly in the solicitation and resulting contract Reporting requirements for SBPCD must be explicitly stated in the solicitation and resulting contract, including how they will be implemented in the event of award. There is latitude in how this is implemented (i.e., special contract requirement (section H), requirements document (PWS/SOW), or attachment/exhibit (Section J Exhibit (CDRL)). Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Past Performance – Evaluation Requirements
FAR Past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold (For DoD see Director of Defense Procurement and Policy Class Deviation Past Performance Evaluation Thresholds and Reporting 2013-O0018 dated September 24, 2013) DFARS (a)(2) requires that in DoD solicitations that include the clauses at FAR , Utilization of Small Business Concerns, and FAR , Small Business Subcontracting Plan, if applicable, the past performance of offerors in complying with the requirements of those clauses shall be evaluated In addition to evaluating an offeror’s SBPCD, we also need to evaluate their small business past performance relative to compliance with FAR and FAR , if applicable. This would entail evaluating compliance with SBPCD requirements (or equivalents) on prior contracts. Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Past Performance – Evaluation Options
Evaluation of small business past performance may occur in one of two ways within the source selection evaluation: Past Performance Factor (overall) Small Business Participation (factor or subfactor as applicable) Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Past Performance - Compliance with FAR 52.219-8
Examples of elements to evaluate related to FAR include: Actual prior use of small businesses Use of small businesses in the socioeconomic categories Types of work performed by small businesses Complexity of the work performed by small businesses Reporting of small business performance in CPARS or other required reporting History of prompt payments to small businesses These should be consistent with what’s required in FAR , DFARS , and any other criteria that may be applicable based on local activity efforts in implementing SBPCD best practices (i.e., SBPCD reporting, meeting MQR%s, etc.). Intermediate Small Business Programs, Part B Acquisition Strategies

Small Business Past Performance - Compliance with FAR 52.219-9
Examples of elements to evaluate relative to FAR include: Performance against subcontracting goals Compliance with the Small Business Subcontracting Plan requirements Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.4, Develop Small Business Strategy Recommendations
Maximize prime contracting opportunities and subcontracting (market-research based) Total or partial set-asides (Rule of 2) and how to establish and implement; same for subcontracting Single end item or service contract or single IDIQ or MAC IDIQ approach and how to implement Mitigation of any barriers or other risks Revise requirements documents and issue draft solicitation for industry review to ensure buy-in Develop solicitation language (requirements, evaluation criteria) and how to implement (model contract language) for all small business strategies Intermediate Small Business Programs, Part B Acquisition Strategies

Analyze the market research data and information from Activities 4.1, 4.2, and 4.3 Respond to the questions on the Acquisition Strategy Worksheet Be prepared to discuss your team’s recommendations with the class Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.4: Rubric Desired Behaviors
You will use the activity rubric which identifies desired behaviors to rate your performance Learning Objectives: Determine appropriate small business acquisition strategy recommendations based on analysis of the market research data and all other supporting information from Activity 4.1, 4.2, and 4.3 outcomes. Directions: As you complete this activity, rate yourself on how effectively you demonstrated the desired behaviors. Add comments to clarify your self-assessment, especially in areas in which you feel you need further development. You can refer to these notes as you complete your Action Plan at the end of the lesson to help you identify the things you might do differently. Include additional comments regarding your performance in the Notes area below: Desired Behaviors Develop acquisition strategy recommendations consistent with market research data and Activities 4.1, 4.2, and 4.3 Participate in team discussions Respond to questions thoughtfully and creatively Desired Behaviors Rating Rate how effectively you demonstrated each behavior: 1 – Poor 2 – Fair 3 – Neutral 4 – Good 5 – Excellent Comments Develop acquisition strategy recommendations consistent with market research data and Activities 4.1, 4.2, and 4.3 1 2 3 4 5 Participate in team discussions Respond to questions thoughtfully and creatively Intermediate Small Business Programs, Part B Acquisition Strategies

Activity 4.4 Key Points Your small business Acquisition Strategy recommendations should: Maximize prime contracting opportunities as a first choice (set-asides) Maximize small business subcontracting opportunities Intermediate Small Business Programs, Part B Acquisition Strategies

Lesson Summary Identifying barriers and other risks for small business Using market research to inform development of small business strategies Analyzing draft PWS and Acq. History Understanding Consolidation and Bundling, and MAC IDIQs Market Research and Mitigation Strategies Key points: You need to be involved at the beginning of an acquisition so that you can help shape the Acquisition Strategy for maximum small business utilization. You must proactively identify barriers and other risks that impede small business utilization early in the contracting process so that these barriers and other risks can be mitigated. You must devise and conduct very focused market research to get specific Industry feedback on each impediment when mitigating barriers or other risks. You must ensure that set-asides are appropriately considered (Rule of 2) via market research prior to considering a full and open competition strategy. You must understand that an approved consolidation determination supports viability of continued small business prime opportunities. You must understand the policies and differences between consolidation and bundling. You must understand MAC IDIQ policies and how to implement them to maximize small business utilization. You must understand the policies and distinctions between Small Business Subcontracting Plans and SBPCDs, including relevant DoD source selection policies and evaluation procedures, and how to implement these in solicitations and contracts. Intermediate Small Business Programs, Part B Acquisition Strategies

Action Planning Identify one key insight from this lesson Identify one thing you will do differently on the job Discuss with your accountability partner Intermediate Small Business Programs, Part B Acquisition Strategies

Lesson 4: Acquisition Strategies

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