# DLAD PART 37 – SERVICE CONTRACTING

- SUBPART 37.1 – SERVICE CONTRACTS – GENERAL

- 37.102 Policy.

- 37.103-90 Contracting Officer Responsibility.
- 37.105-90 Competition in service contracting.
- 37.110-90 Solicitation provisions and contract clauses.

- SUBPART 37.2 – [RESERVED]
- SUBPART 37.3 – [RESERVED]
- SUBPART 37.4 – [RESERVED]
- SUBPART 37.5 – MANAGEMENT OVERSIGHT OF SERVICE CONTRACTS

- 37.590 Management oversight structure within DLA.

- 37.590-1 Background.
- 37.590-2 Purpose.
- 37.590-3 Policy.
- 37.590-4 Decision authority.
- 37.590-5 Milestone reviews.
- 37.590-6 Review and approval for service contracts.

- SUBPART 37. 6 – PERFORMANCE-BASED CONTRACTING

- 37.601-90 General.

- SUBPART 37.90 – SERVICES OF GRIEVANCE EXAMINERS/EQUAL EMPLOYMENT OPPORTUNITY (EEO) INVESTIGATORS

- 37.9001 General.

PART 37 – SERVICE CONTRACTING

TABLE OF CONTENTS

(Revised February 14, 2013 through PROCLTR 2013-32)

SUBPART 37. 1 – SERVICE CONTRACTS – GENERAL

37.102 Policy.

37.103-90 Contracting Officer Responsibility.

37.105 Competition in service contracting.

37.110 Solicitation provisions and contract clauses.

SUBPART 37.2 – [RESERVED]

SUBPART 37.5 – MANAGEMENT OVERSIGHT OF SERVICE CONTRACTS

37.590 Management Oversight structure within DLA.

37.590-1 Background.

37.590-2 Purpose.

37.590-3 Policy.

37.590-4 Decision authority.

37.590-5 Milestone reviews.

37.590-6 Review and approval for service contracts.

SUBPART 37.3 – [RESERVED]

SUBPART 37.4 – [RESERVED]

SUBPART 37.5 – SUBPART 37.5 – MANAGEMENT OVERSIGHT OF SERVICE CONTRACTS

SUBPART 37.6 – PERFORMANCE-BASED CONTRACTING

37.601 General.

SUBPART 37.90 – SERVICES OF GRIEVANCE EXAMINERS/EQUAL EMPLOYMENT OPPORTUNITY (EEO) INVESTIGATORS

37.9001 General.

SUBPART 37.1 – SERVICE CONTRACTS – GENERAL

(Revised July 1, 2013 through PROCLTR 2013-54)

37.102 Policy.

(a) – (d) [Reserved.]

(e) Refer to 1.170 for Defense Procurement and Acquisition policy (DPAP) peer review requirements for service contracts valued at $1 billion and greater (inclusive of options and surge).

(S-90) For Defense Logistics Agency (DLA) peer review program procedures, see PGI 1.170-5-90.

(S-91)(a) Acquisition of services.

(1) The Director, DLA Acquisition, appointed the Deputy Director, DLA Acquisition (J7) as the senior manager for acquisition of services on August 23, 2011. This title is abbreviated to Senior Services Manager of DLA. The office of the senior services manager is responsible for governance in planning, execution, strategic sourcing, and management of acquisitions of services.

(2) The senior services manager (SSM) office is a results-based organization that is focused on understanding the services acquisition investment, establishing oversight and accountability, and developing tools based on demonstrated best practices in order to move toward a more efficient, effective, and cost-conscious way of acquiring services.

(3) The office of the SSM develops and manages an oversight structure and processes for improved services acquisition. It is responsible for optimizing services acquisition through portfolio management, execution governance, and project management activities in the following areas:

(i) Defining requirements;

(ii) Enhancing market research;

(iii) Increasing competition;

(iv) Optimizing contract types;

(v) Promoting best practices, lessons learned, and templates; and

(vi) Capturing cost efficiencies.

(b) Joint requirements for the acquisition of services.

(1) Each activity shall document how it obtains and combines (if appropriate) joint requirements for the acquisition of services. This information shall be reported to the senior services manager via the services program manager by September 1st of each year. After the initial report, if there are no changes to the methodology, a negative report shall be provided, confirming no change in policy.

(2) The senior services manager has appointed three portfolio group managers that are responsible for managing acquisitions of services in the following portfolios:

(i) Electronics/communications services (ECS);

(ii) Facilities related services (FRS), and

(iii) Knowledge based services (KBS).

(3) These services comprise the vast majority of all DLA acquisitions of services. The office of the senior services manager shall serve as the portfolio manager for any acquisition of services that does not fall under any of the above portfolios.

(i) The taxonomy of services that classifies each service code into a broad portfolio group can be found in DFARS PGI 237.102-74 Taxonomy for the acquisition of services.

(ii) The portfolio manager for facilities-related services resides in the DLA Headquarters (HQ) Office of Installation Management, the portfolio manager for electronics/communications services resides in DLA HQ J6, and the portfolio manager for knowledge based services resides in DLA HQ J3.

(iii) Appointments of portfolio managers are indefinite and shall last until a portfolio manager leaves the office in which the position resides, or until a new portfolio manager is nominated by the office in which the position resides, and the SSM accepts the nomination.

(iv) The SSM may, however, at any time revoke a portfolio manager’s designation for any portfolio group, and designate a new portfolio manager for that group, based on DLA’s needs, related to workload, or other factors.

37.103-90 Contracting Officer Responsibility.

(a) – (d) [Reserved.]

(e) To comply with Undersecretary of Defense, Acquisition, Technology, and Logistics memorandum dated November 28, 2012, Subject: Enterprise-wide Contractor Manpower Reporting Application, contracting officers shall include the following language in all contracts that require the performance of services, including contracts for goods with defined requirements for services. This standard language shall be included in new statements of work, performance work statements, and statements of objective, and in modifications to existing contracts. Exceptions are detailed in paragraph (3) of this section.

(1) Contractor manpower reporting language for contract statements of work, performance work statements, and statements of objectives:

The contractor shall report all contractor labor hours (including subcontractor labor hours) required for performance of services provided under this contract for the Defense Logistics Agency via a secure data collection site. The contractor is required to completely fill in all required data fields using the following web address: http://www.ecrnra.mil/.

Reporting inputs will be for the labor executed during the period of performance during each Government fiscal year (FY), which runs October 1 through September 30. While inputs may be reported any time during the FY, all data shall be reported no later than October 31 of each calendar year, beginning with 2013. Contractors may direct questions to the help desk at help desk at: http://www.ecmra.mil.

(2) The reporting requirement applies to all contracted services, provided the organization receiving or benefiting from the contracted services is a Department of Defense (DoD) organization. This includes reimbursable appropriated funding sources from non-DoD executive agencies where the Defense component requiring activity is executive agent for the function performed.

(3) The reporting requirement does not apply to the following types of procurements by product service code:

(i) S111 Utilities: Gas services;

(ii) S112 Utilities: Electricity services;

(iii) S113 Utilities: Telephone and/or communications services;

(iv) S114 Utilities: Water services;

(v) S119 Other utilities; and,

(vi) Construction of structures and facilities.

(4) Use and safeguarding of information from the secure web site. Data provided by contractors is considered to be proprietary in nature when the Contract number and Contractor identity are associated with the direct labor hours and direct labor dollars. At no time will any data be released to the public with the Contractor’s name and contract number associated with the data.

37.105-90 Competition in service contracting.

(a) See DFARS 216.505-70, Orders for services under multiple award contracts, for competition and “fair opportunity” requirements for all services exceeding the simplified acquisition threshold acquired under these vehicles, and 8.404-70(c)(1) and DFARS 208.404-70, Additional ordering procedures for services, regarding use of orders against GSA Federal supply schedules for services valued at greater than the simplified acquisition threshold. See subpart 7.90 for additional requirements for services acquired via non-DoD contract vehicles. See 16.601-90 for additional requirements concerning use of time and material/labor hour contract line item numbers (CLINS), contracts, or task orders for services.

37.110-90 Solicitation provisions and contract clauses.

(a) Use provision 52.237-9003, Site Visit Coordinator, in solicitations when a contractor will be performing services on a DLA installation and a site visit is recommended. The buyer or acquisition specialist shall fill-in required information and use the clause in conjunction with FAR 52.237-1 Site Visit.

(b) Use provision 52.237-9004, Evaluation – Contractor Installation or Verification of Installation, when contractor installation of equipment or contractor verification of installation at destination is required, and fill-in required information. Always use this provision when clause 52.246-9040 Inspection and Acceptance Supervision of Installation is included.

(c)(1) Use clause 52.237-9001, Contractor Personnel Changes and Key Personnel Requirements, in cost type contracts for both supply and service contracts, as appropriate, and fill-in required information for key personnel. If the contract does not require key personnel, fill in “no key personnel positions identified” in paragraph (b).

(c)(2) Use provision 52.237-9002, Key Personnel – Fixed Price Service Contracts, in solicitations and contracts for negotiated fixed-price services when the services to be provided will require professional employees and when evaluation of proposed key managerial personnel is necessary to assess the probability of successful performance.

SUBPART 37.2 – [RESERVED]

SUBPART 37.3 – [RESERVED]

SUBPART 37.4 – [RESERVED]

SUBPART 37.5 – MANAGEMENT OVERSIGHT OF SERVICE CONTRACTS

(Revised July 1, 2013 through PROCLTR 2013-54)

37.590 Management oversight structure within DLA.

37.590-1 Background.

(a) Enclosure 9 of DoD Instruction 5000.02, Subject: Operation of the Defense Acquisition System, addresses acquisition of services.

(1) The current requirement calls for notification to the USD(AT&L) for potential review of service acquisitions valued at $1 billion or more, or “special interest” acquisitions (e.g., A-76 cost comparisons; high Congressional interest; etc.) of any dollar value.

(2) Acquisition of information technology (IT) services valued at $500 million or greater shall similarly be referred to the Assistant Secretary of Defense for Networks and Information Integration/Chief Information Officer (ASD(NII)/CIO).

(3) Other service acquisitions below the $1 billion threshold are to be managed under component-level review structures established in accordance with Departmental guidelines; see 1.690 and 37.590-4.

(b) This section (with field-level supplementation, where indicated and appropriate) fulfills the mandate of the USD(AT&L) policy cited above by establishing a strategic and integrated approach to the acquisition of services.

37.590-2 Purpose.

The purpose of this policy is to ensure:

(a) that acquisitions of services are based on clear, performance-based requirements;

(b) that required outcomes are identified and measurable;

(c) that there is a consistent review and approval process for service acquisitions; and

(d) that acquisitions are properly planned and administered to achieve the intended results.

37.590-3 Policy.

(a)(1) Create a documented acquisition strategy in support of each proposed service acquisition valued above ths simplified acquisition threhold, to be updated when changes occur. This strategy should ensure that services are acquired by business arrangements that are in the best interests of the Department and DLA, that reflect a strategic approach, in terms of overall spending on services, and that are entered into or issued and managed in compliance with applicable statutes, regulations, directives, and other requirements. It should also guarantee enterprise-wide approaches to procurement and development of new ways of doing business. Approval of the appropriate decision authority (see 37.590-4, below) shall be obtained for each acquisition strategy prior to the contracting office’s initiating any action to commit the Government to the strategy. In addition to the following, see Subparts 7.1, 7.90, and 90.11 for guidance in preparing this documentation.

(2) The acquisition strategy shall address the following (modified, as appropriate, on the basis of complexity and dollar value of the acquisition):

(i) Requirement — Include the outcomes to be satisfied; whether these outcomes are performance-based; measures of success for the service acquisition; and, for other than newly identified requirements, how it was previously satisfied.

(ii) Risks — Include current and potential cost; schedule and performance risk; and a risk mitigation plan.

(iii) Competition - Include either an explanation of how full and open competition will be provided, or a statutory citation for the authority permitting less than full and open competition; include a similar explanation or citation for procurements subject to DFARS 208.405-70 and 216.505-70. Address plans for competition for foreseeable follow-on acquisitions.

(iv) Small business and related considerations - Include a discussion of how the acquisition will affect achievement of small business goals/targets, and how it will support any other applicable directed programs.

(v) Business arrangements — Include details on funding; type of contract; duration (including option periods); total cost estimate; and pricing arrangements.

(vi) Special considerations for multi-year contracts. If the acquisition strategy calls for a multi-year service contract under authority of 10 USC 2306c, the strategy must address DLA’s plans for budgeting for termination liability. For further guidance on multiyear contracting for services, see DFARS Section 217.171.

(3) Further guidance on acquisition strategy for information technology acquisitions may be found in FAR Part 39 and DFARS Part 239. In addition, all IT acquisitions for services will be processed in accordance with J-6’s Issuances, “Information Technology Acquisition Requirements Planning” and “IT Portfolio Management Process.”

(4) For actions described in 37.590-4(c), see also 1.690 for documents required to be submitted for integrated acquisition review board (IARB) review and approval.

(b) Establish metrics for each proposed service acquisition. These should generally pertain (as appropriate) to cost, schedule, and performance. The cognizant decision authority (see 37.590-4, below) will approve the metrics selected, and will conduct execution reviews to assess outcomes against requirements. These will occur at certain milestone points; see 37.590-5, Milestone Reviews, below.

(c) Accurately report required data regarding each service acquisition having a value greater than the micro-purchase threshold via the Federal procurement data system (FPDS) system; this requirement includes services pertaining to information technology. Applicable data to be collected via the FPDS include the following:

(1) Services purchased.

(2) Total dollar amount.

(3) Form of contracting action.

(4) Whether the purchase was performance—based and fixed price; performance—based, other than fixed price; or not performance-based.

(5) For a purchase made through an agency other than the Department of Defense, the agency through which it was made. Separately maintain (via other than FPDS reporting) a listing of any assisted acquisition and the service charge associated with each. See 7.9003(b)(7).

(6) Extent of competition provided, and whether there was more than one offer.

(7) Whether the purchase was made from a small business concern; a small disadvantaged business concern; or a woman-owned small business concern.

37.590-4 Decision authority.

The decision authority for review and approval level associated with each dollar range for service acquisitions, as depicted in Table 1 in 1.690 and described in this section, shall ensure that each such acquisition is reviewed and approved at the required level. To ensure the appropriate level of interest and strategic decision-making, local procedures should require that service acquisitions greater than the simplified acquisition threshold be reviewed and coordinated at the highest levels practicable.

(a) The decision authority for services acquisitions with a total value of $1 billion and above is retained by the Director, Defense Procurement, Acquisition Policy and Strategic Sourcing, Office of the Under Secretary of Defense, Acquisition, Technology and Logistics (DPAPSS, OUSD(AT&L)) except for Information Technology (IT) services acquisitions valued at $500 million and above, for which the ASD(NII)/CIO retains decision authority.

(1) Submit documentation for these acquisitions to DLA HQ J72 for review and coordination in accordance with the procedures specified in 1.690 concerning the acquisition strategy review panel (ASRP) and integrated acquisition review board (IARB). Review and approval levels and criteria for service acquisitions subject to an ASRP and IARB are stated in 1.690; refer also to 90.1502.

(2) Following review and approval by the IARB and SPE, the DLA HQ J71 peer review manager on behalf of the DLA HQ J7 will forward notification to DPAP and notify DLA HQ J72 of receipt and the time-frame for conducting the review. (Refer to 1.170.)

(b) The decision authorities for all other service acquisitions are specified in 1.690.

37.590-5 Milestone reviews.

(a) Milestone review and approval levels and criteria for service acquisitions subject to an ASRP and IARB are stated in 1.690; refer also to 90.1502. If an ASRP and IARB are required then, at each decision point, the ASRP or IARB shall either permit the acquisition to proceed, modify the strategy, or terminate the process.

(b)(1) For acquisitions not subject to ASRP and IARB review, milestone reviews and approvals shall be established and conducted in accordance with local procedures. These procedures should ensure that the procurement is continuously reviewed and assessed.

37.590-6 Review and approval for service contracts.

(a) Acquisition of services with an estimated value in excess of $10,000,000. See 15.406-3-90 and follow the procedures at PGI 15.406-3-90.

SUBPART 37. 6 – PERFORMANCE-BASED CONTRACTING

37.601-90 General.

(a) It is Department of Defense and Federal Government-wide policy that a minimum of 50 percent of the components’ service acquisitions, measured in dollars, will be performance-based. In order to fulfill this directive, contracting personnel shall be aware of performance-basing criteria. Consult the Performance Based Services Acquisition (PBSA) home-page http://www.dla.mil/Acquisition accessible from the DLA Regulatory home-page, for assistance and considerations. The web site may be especially helpful in establishment of performance metrics for cost, schedule, and performance.

(b) In order to receive credit toward fulfilling the goals mentioned above, the contracting officer shall ensure that performance-based service acquisitions are recorded correctly on the Contracting Action Report; see 37.590-3(c). See DFARS PGI 253.204-70(b) (1) (v) for instructions for the correct coding of a performance based service contract. Note that a contract may be considered performance-based if at least 50% of its value is for work that is performance-based.

(c) Although these will not be considered for inclusion in the reporting required above, the contracting officer make every effort to performance-base the services aspects of acquisitions that are primarily considered supply contracts, such as prime vendor arrangements.

SUBPART 37.90 – SERVICES OF GRIEVANCE EXAMINERS/EQUAL EMPLOYMENT OPPORTUNITY (EEO) INVESTIGATORS

37.9001 General.

(a) Requirements for services of grievance examiners/EEO investigators shall be satisfied by the most appropriate FAR/DFARS prescribed contracting procedure.

(b) The contracting officer shall be responsible for selection of the contracting procedure and for administration of the resulting contract(s).

(c) Small purchase contracts for these services shall be placed only with sources identified in the qualified pool of estimators/examiners list maintained by the DLA HQ Office of Equal Employment Opportunity, Defense switched network (DSN) 284-7192.

(d) Contracting officers shall contact the DLA HQ Office of Equal Employment Opportunity to obtain a current required source list for soliciting in accordance with FAR 13.106 procedures.