CHAPTER 2.Introduction to the Federal Acquisition Process

To provide a backdrop for further discussion on the integrated acquisition team, its role, responsibilities, structure, and relationships among team members, this chapter provides an overview of the federal acquisition process. It concludes with a presentation on the management of risk and opportunities (MR＆O) technique, which focuses on the acquisition’s objectives and is a way by which possible variances can be managed proactively to ensure that the risk of not achieving the objectives is mitigated and the window of opportunity to exceed expectations is not missed.

Peter Drucker suggests that we are now in transition from the traditional command-and-control organizational relationship to one based on the flow of information among bodies of knowledge. Drucker describes the information-based organization as a group of specialists linked to each other in a network but functioning as independent agents for their specialty. These specialists actively interact with customers and suppliers using the Internet and extranet in a computer-to-computer exchange of data. Organizationally, this interaction occurs horizontally rather than vertically and crosses functional and institutional boundaries. Distance, which once inhibited real-time communications, is almost no longer a concern. Organizations are becoming flatter, with fewer layers of management. Drucker also predicts that operations of large businesses will more likely resemble those of hospitals or orchestras than of typical manufacturing companies.

Traditionally, contracting has been viewed as an exclusive relationship between a buyer and a seller, each concentrating on getting what they want from the other. This perception goes back to the era when the seller had the expertise and was able to perform a majority of the work using its own organic capabilities. However, as the technological content and complexity of products increased, dependence on outside specialists and subcontractors also grew because their special knowledge and capabilities were crucial to satisfying contractual requirements. Today, at least 60% of a product or service’s cost is in the form of purchased supplies, equipment, material, and services. On average, 50% of a firm’s quality problems can be traced to purchased materials.

The postulate of acquisition doctrine is that control over cost and quality of goods and services purchased can be achieved more effectively when functional specialists in the buyer and seller’s organizations operate as part of an interdependent and integrated system. The contracting officer (CO) as a business manager plays a leading role in this relationship. No longer can the COs act as if their primary role is to enforce the acquisition rules and regulations and when others get involved, view them with apprehension. It has been said, “Years of dictated regulated solutions have bred a contracting culture that avoids risk, that tends not to think creatively when devising solutions, and that has gained a reputation in many quarters for being toads in the road.” One of the goals of this book is to help eradicate this reputation. The prescription is to follow the acquisition principles, eliminating the adversary relationships through team building, managing risk and opportunities, and taking advantage of the communication capabilities afforded by technological advances in telecommunications.