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DLAD PART 7



PART 7

ACQUISITION PLANNING

SUBPART 7.1 - ACQUISITION PLANS

7.102 Policy.

7.103 Agency-head responsibilities.

7.104 General procedures.

7.104-90 Acquisition Planning Executive Council (APEC) reviews.

7.105 Contents of written acquisition plans.

7.107 Additional requirements for acquisitions involving bundling.

SUBPART 7.2 – PLANNING FOR THE PURCHASE OF SUPPLIES IN ECONOMIC QUANTITIES

7.202 Policy

7.203 Solicitation provision

SUBPART 7.3 - CONTRACTOR VERSUS GOVERNMENT PERFORMANCE

7.304 Procedures.

7.306 Evaluation.

SUBPART 7.1 - ACQUISITION PLANS

7.102 Policy.

(b) A Business Case Analysis, in accordance with MM (now J-3) Memorandum dated May 15, 1997, subject: DLA Materiel Management (MM) Initiative Management Policy, shall be accomplished coincident with planning for a Shift to Commercial Practices, or other shift in method of support. The price comparison shall be made on the basis of total estimated costs to the customer, i.e., materiel purchase cost plus the cost recovery markup for logistics support costs charged by DLA, plus an estimate of the customers’ own logistics costs (storage, delivery, forecasting, requisitioning or buying, etc.) for the expected order quantities of all items available for order under the contract(s), i.e., after exclusion of price and/or delivery outliers. The analysis, which shall be retained in the resulting contract file, shall demonstrate that the support decision and the resulting purchase decisions will provide added value to our customers (e.g., lower overall costs inclusive of their logistics costs, improved deliveries, and/or enhanced supplier support, etc.).

(90) Market surveys (see FAR 7.101) and market research (see FAR and DLAD PART 10) shall be performed consistent with any local operating procedures.

(91) Written acquisition plans are required for all proposed contract actions other than those not expected to exceed the simplified acquisition threshold. Acquisition plans for proposed contract actions not required to be approved by the Acquisition Planning Executive Council (APEC) (see 7.104-90) shall, at a minimum, be initiated at the time the purchase request is received by the buyer, prepared substantially in accordance with the illustrative format at 90.1102, and approved at a level above the level of the buyer. The approval level shall be established by the chief of the contracting office. The illustrative format may be modified to suit the needs of the contracting office. A standard DLA-wide form is not prescribed in order to permit development of local forms or formats.

(92) Acquisition plans for proposed contract actions required to be approved by the APEC shall be prepared in accordance with FAR 7.105, DFARS 207.105, and 90.1101 of this directive, except as provided in 7.104-90(h) below in regard to DSCP.

(93) The acquisition plan shall accompany the justification for other than full and open competition (see FAR 6.303, FAR 6.304, and 6.101 and 6.304 of this directive) when it is forwarded to the Activity Competition Advocate. The Activity Competition Advocate shall also be provided a copy of the acquisition plan for those acquisitions for which there is not a history of receipt of more than one offer and price competition is not expected to be received on the acquisition.

(94) The plan shall identify planned cost and delivery metrics and the POC(s) monitoring contract performance.

7.103 Agency-head responsibilities.

(a) Requirements for contract actions, which must be awarded by the end of the fiscal year, must be submitted to the contracting office by 31 July of that fiscal year. Solicitations for requirements received after 31 July shall not be issued unless approved by the chief of the contracting office.

A contract action log shall be maintained by the contracting office for all purchases of contracted advisory and assistance services, periodicals, pamphlets, and audiovisual products. Existing logs may be used for this purpose, provided some means is devised to readily identify these types of contract actions that are highly vulnerable to waste.

(d) Written acquisition plans required by 7.102(91) may be effected on a system basis (see FAR 7.102) using a comprehensive plan for a specified period of time (i.e., quarterly, semi-annually or annually).

7.104 General procedures.

(b)(90) The Defense Production Act (DPA) and the Defense Planning Guidance (DPG) require DoD to maintain an adequate production base to promote national security. In this regard, industrial preparedness actions are taken to ensure that the industrial base is adequate to offset war reserves shortfalls and provide combat support in emergencies. When an item is being considered as an item of supply from a new source, an industrial capabilities assessment for the item should be accomplished or updated. This assessment is especially important when the item will be supplied by a single source, as well as when it is a critical item with a war reserve shortfall, a critical item that has experienced high demand in previous contingencies, a military unique item, or a weapon system item coded essentiality codes 1, and 5, or 7. For these types of items, adequate capacity is necessary to meet S&S requirements. Assessment of newly sourced items is not required if previous analysis on capacity to do an entire family of items (that newly sourced items belong to) shows the new source already has sufficient equipment, facilities, personnel, and materials to meet S&S requirements for the newly sourced items.

(b)(91) Measures to ensure S&S requirements (i.e., items, quantities, and delivery terms) are defined, S&S capability is developed, and S&S capability can be tested (as required in DLAD 17.9303)) must be undertaken for all new business arrangements (e.g., prime vendor, virtual prime vendor, corporate contracts, etc.) and long-term contracts. These measures are especially crucial when the new support method will eliminate or reduce DLA inventories. Acquisition plans for these new arrangements and LTCs must address S&S requirements, capability, and testing. If surge and/or sustainment requirements are not included in the solicitation (e.g., they do not exist, they are covered under other contractual arrangements, they are covered via sufficient peacetime assets, etc.), state this in the acquisition plan and explain the basis for not including them.

(c)(90) The contracting officer is responsible for taking timely actions to assure that the procurement cycle for forecasted requirements is adequate so it is not necessary to place an award or order on an undefinitized basis.

7.104-90 Acquisition Planning Executive Council (APEC) reviews.

(a) The Executive Director, Logistics Policy and Acquisition Management is the reviewing official for all acquisitions conducted by any contracting office under the cognizance of DLA. Acquisitions requiring review fall into the categories described under 7.104-90(d), or have a significant impact on Agency workload (e.g., at depots or DLA ICPs). Reviews will be conducted as Acquisition Planning Executive Council (APEC) reviews, requiring either: review of written documents (as described by 7.104-90(c)) only; review of written documents and a briefing; or presentation of a briefing only. For all acquisitions potentially subject to review, DLA contracting offices shall submit advance notification to HQ DLA, ATTN: J-335, including:

(1) A brief narrative summary of the circumstances of the acquisition, including the reason for submission, a description of the effort being contracted for, and an identification of the customer(s), item(s)/nomenclature, delivery parameters, and unique/innovative aspects of the acquisition. The notification shall also include the PR number (if applicable), quantity, solicitation and evaluation methods, J&A authority (if applicable), and type of contract, and the estimated dollar value of the contract, for each base year and each option year, if applicable. Additionally, the summary must identify the cognizant program manager and/or contracting officer, including office symbol(s), telephone and fax number(s) and e-mail address(es).

(2) The following information may be provided if available at the time of notification. Alternatively, a statement should be included that explains that the information is or will be included in the acquisition plan, or is not yet available, or is included in another document already provided to Headquarters DLA, such as a J-3 Initiative document (Business Case), Business Plan, or POM submission.

(i) A statement that the impact on depot workload has been assessed, and that the impacted distribution region(s) have been made aware of this potential impact.

(ii) A statement describing the impact on workload at ICP(s) other than the one managing the program or executing the contract, if applicable, and verification that the affected ICP(s) have been apprised.

(iii) A statement that the impact on DCMA workload has been assessed, and that DCMA has been made aware of this potential impact.

(iv) A statement confirming that readiness, sustainability, and surge requirements (as described by 17.9300) have been included in the proposed acquisition.

(v) A statement confirming that a transition plan (dealing with such issues as depleting residual assets, maintaining quality, perpetuating engineering design changes, etc.) has been developed when migrating from one support method to another, e.g., depot support to direct vendor delivery.

(vi) A statement that the impact on the Military Service component(s) has been assessed, and that the Service has been made aware of this potential impact.

(3) Within five working days after receipt of the summary, J-33 will advise the contracting office whether the acquisition is subject to a review of written documents only, a review of written documents accompanied by a briefing, or requires only a briefing to the APEC.

(b) The Executive Director, Logistics Policy and Acquisition Management (J-33) is Chairperson of the APEC, and as such, will designate members of the APEC on a case-by-case basis for each procurement subject to APEC review. APEC membership normally consists of (but is not limited to) the following individuals: Executive Director, Business Management Office (J-38), Executive Director, Logistics Policy and Acquisition Management (J-33), Director, Business Development and Supply Chain Integration Division (J-381), General Counsel (GC), Comptroller (FO), and Director, DCMA.

(c) For Acquisition Planning Executive Council (APEC) reviews, acquisition plans, reviewed and coordinated by appropriate field functional elements, accompanied by applicable justifications, statements of work, source selection plans and evaluation criteria, and a copy of the proposed solicitation, shall be forwarded by the Chief of the Contracting Office at each DLA contracting activity to the Executive Director, Logistics Policy and Acquisition Management (Attn: J-335) for review and approval by the APEC. J-338will review acquisition plans submitted for APEC review jointly with J-335, whenever acquisition plans are required to address S&S capability in accordance with DLAD 7.104(b)(91) and 17.9303. The information described at 7.104-90(a)(2) should be provided with the acquisition plan, if not provided previously.

(d) Procurements requiring APEC review include, but are not limited to, actions:

(1) requiring approval by the Senior Procurement Executive (see FAR 6.304, DFARS 206.304(a)(4)(A), and DLAD 6.304(a)(4)(A)(1)(90);

(2) of an innovative or unusual nature, and that have a significant dollar value or a major impact on industry or government activities, e.g., the initiation of the prime vendor and virtual prime vendor quick response programs;

(3) which have Congressional, OSD, or White House interest;

(e) Contracting offices may request oral presentation of an acquisition plan to expedite processing, in which case the acquisition plan will be forwarded so as to arrive at HQ DLA (J-335) 5 (five) working days prior to the scheduled briefing. Upon completion of an oral presentation to the APEC, the briefer will be advised of unconditional approval, conditional approval, or disapproval. Unconditional and conditional approvals are authority to proceed with the acquisition. All decisions will be transmitted by letter to the respective office.

(f) Once an acquisition plan is approved by the APEC, no changes may be made in the planned approach without the prior approval of the APEC.

(g) All DSCP acquisitions subject to APEC review shall be so designated in the DLA Acquisition Planning System (DLA APS). The narrative accompanying plans subject to APEC review and approval shall include the essential information and documentation required by APEC. A summary of each acquisition included in the DLA APS shall be furnished to the Executive Director, Logistics Policy and Acquisition Management , ATTN: J-335, after approval by the appropriate officials at DSCP. Acquisitions requiring APEC review shall be clearly identified when a summary is submitted. J-335 will contact DSCP-P to schedule APEC reviews.

(i) As other ICPs and procurement offices implement the use of the DLA APS (which is an enhancement of the DSCP Acquisition Planning System, and currently is available to all contracting offices), the APEC processes described in this paragraph will also apply to their acquisitions.

(h) The Directorate of Contracting, DSS (DSS-O), is subject to the same APEC procedures as other DLA contracting offices.

7.105 Contents of written acquisition plans. See 90.1101.

7.107 Additional requirements for acquisitions involving bundling.

(a) “Necessary and justified” (with regard to bundling) is a two-part determination, made with the aid of market research. It means not only that the consolidation is considered essential from a management perspective, but also that the benefits accruing from consolidating requirements, as compared to contracting on a non-consolidated basis, would be measurably substantial (as defined in FAR 7.107(b)). Note that the definition of “measurably substantial” contains a requirement for quantification of benefits.

(c)(90) If quantification of the benefits of a bundled acquisition does not equal quantification levels set forth in FAR, you will ordinarily have to abandon the consolidation. However, in exceptional situations it may still be possible to proceed with the contracting action. You must seek the approval, via determination and findings, of the Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L)), that bundling is necessary and justified. In that case, even though the quantified benefits do not reach the specified dollar equivalents, they must be shown to be critical to the agency’s mission success. The acquisition strategy described in the request to USD(AT&L) must provide for maximum practicable participation by small business concerns. Reduction of administrative or personnel costs alone cannot be used as justification for bundling in support of the request to USD(AT&L).

(91) For an acquisition requiring USD(AT&L)’s permission to proceed with the bundled requirement, submit your request for approval of the determination and finding to J-335; it will be routed through J-33, J-3, DLA-DB, and the Director, DLA, who will sign out the request to OSD. There are no timeframes in the statute or FAR for use of this procedure, but it is essential that you submit your justification at the earliest possible date. Therefore, you should forward the request within 30 days of your determining that the proposed acquisition will not generate savings in accordance with established levels, as set forth in FAR (that is, within 30 days of your performing a bundling analysis). Under no circumstances may you issue a bundled solicitation until you have received the determination and finding, granting the permission, from USD(AT&L).

(e) In establishing the procurement strategy for any bundled requirement, whether or not of a dollar value constituting substantial bundling, the contracting officer may want to address the following considerations as part of the market research required to be conducted in accordance with FAR 10.001(a)and (c) and 10.002(e): benefits; impediments to small business prime contracting participation; actions to maximize small business subcontracting participation; and affirmative determination that the benefits justify bundling. However, in cases not involving substantial bundling, FAR does not require that the documentation of the research results be so extensive as it would be for instances of substantial bundling. See 10.001.

(90)(i) If a bundling analysis has already been performed on a contract action, it is not necessary to perform a new bundling analysis before exercising an option.

(ii) For new acquisitions, procurement history should be analyzed from the three immediately preceding years to determine whether there have previously been separate, smaller contracts for these requirements that were or could have been performed by small businesses.

(iii) For a long-term contract with an “add/delete” clause, you must perform a bundling analysis before you add individual/groups of items via clause exercise, if the change modifies the contract and constitutes a new consolidation. On the other hand, if the add/delete clause is merely a mechanism by which items, always intended to be part of the acquisition and included in the initial analysis, are “phased in” (for pricing and other purposes), then the additions do not constitute a new consolidation, and a new bundling analysis is not required.

(91) Remember that the SBA can appeal to the head of a contracting agency certain decisions made by the agency that SBA believes will adversely affect small businesses. One such appealable decision pertains to any bundling of contract requirements the SBA considers to be unnecessary or insufficiently justified. Whenever a proposed consolidation of requirements, at least some of which were formerly filled by small businesses, is likely to render the resultant contract unsuitable for award to a small business concern, the SBA may challenge that solicitation. (See the definition of bundling at FAR 2.101 for aspects of a procurement that might make small business participation unlikely.) Given the seriousness of these consequences, you must be able to show that any such proposed consolidation is “necessary and justified” (as defined in (a), above), and that benefits that are anticipated to accrue to the Government will be “measurably substantial,” as explained in FAR 7.107(b). You cannot rely solely on reduction of administrative or personnel costs as a justification for bundling, unless these savings are expected to be substantial. If you cannot determine that a consolidation of requirements is necessary and justified, and that its benefits will be measurably substantial (including situations where you cannot quantify such benefits), you must not proceed with the bundling without approval by USD(AT&L).

(92) In cases where there is disagreement between the SBA and the contracting officer over a bundled or substantially bundled requirement, the PCR or SBA Area Office may initiate an appeal to the head of the contracting activity. Levels of appeal and associated timeframes are provided in FAR 19.402(c)(2) and 19.505.

SUBPART 7.2 –PLANNING FOR THE PURCHASE OF SUPPLIES IN ECONOMIC QUANTITIES

7.202 Policy.

(b) For solicitations for IDCs and other long-term contracts covering voluminous items for which response by the offeror to the clause at FAR 52.207-4 is not practicable, see 7.203(90).

7.203 Solicitation provision.

(90) The FAR provision shall be tailored, or a locally developed clause used, to obtain volume discounts, market basket discounts and/or separate prices at the offeror’s price break quantities, across the range of potential order quantities, under IDC and other long-term contracts where response to the standard FAR provision is impracticable.

SUBPART 7.3 - CONTRACTOR VERSUS GOVERNMENT PERFORMANCE

7.304 Procedures.

(c)(1) Where the Executive Director, Logistics Policy and Acquisition Management is the HCA (see 2.101), solicitations in which a comparison will be made between contractor and Government performance in accordance with OMB Circular A-76 shall be forwarded to HQ DLA, ATTN: J-336 for review and approval prior to release (see 1.690-6(b)(3)).

(90) Procedures for SBA requested 8(a) commitments.

When, due to application of the confidentiality requirements of FAR 7.304(d), it is not possible to obtain an in-house cost estimate independent of the Government's sealed in-house offer for use in determining an estimated current fair market price (FMP), the contracting officer may determine the FMP based on cost or price analysis in accordance with the provisions in FAR 19.805 and 19.806, as appropriate. When agreement is reached with the SBA or its subcontractor on the terms and conditions of the proposed contract, the Government's sealed in-house estimate shall be opened and the cost comparison completed in accordance with FAR 7.306(b). When agreement between SBA or its subcontractor as to the terms and conditions of the proposed contract is not reached and the SBA withdraws its certification, the Government's sealed in-house estimate shall not be opened. A competitive solicitation shall subsequently be issued, either on a set-aside or non-set-aside basis in accordance with FAR 7.306. The 8(a) firm(s) for which the SBA commitment was originally required shall be provided an opportunity to offer on the competitively issued solicitation. The procedures of FAR 7.306(a) or (b), as appropriate, apply to the balance of the cost comparison process.

(91) With respect to requests for information related to commercial activities cost studies, the contracting officer (or other authorized individual) must consider the guidelines contained in DLAR 5400.14, DLA Freedom of Information Act Program, paragraph VIII.E., and promptly determine if such information should be withheld or released. Requests shall not be required to be submitted under the Freedom of Information Act (FOIA) in order to be considered. If the information is to be withheld, the requestor shall be notified immediately of the decision to withhold the information and of the right to submit a written request for the information under FOIA, if the request was not submitted under FOIA initially. Requests for information may be an indication that the solicitation contains defects or ambiguities, or that the CA solicitation process would be improved by dissemination of the information to all prospective offerors. Therefore, as a part of the disposition of each request, the contracting officer shall consider the need to issue an amendment to the solicitation.

7.306 Evaluation.

(a) Sealed bidding.

(3) The contract file must be forwarded to HQ DLA, ATTN: J-337, for review and approval, and the PLFA must be advised by J-337 that the file is approved before the PLFA commander signs the decision summary form (DLA Form 1764, Cost Comparison Analysis In-House versus Contract Performance, or DLA Form 1764a, Cost Comparison Analysis Expansions, New Requirements, and Conversion to In-House). The contracting officer shall not sign the decision summary form until J-337 approval of the contract file has been received or until J-337 comments, that are a condition of approval, have been properly addressed.

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