Acquisition Management
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THE INTEGRATED ACQUISITION TEAM

Today the probability of a successful acquisition is increased through the use of an integrated acquisition team. Members of the acquisition team are multi-organizational as well as cross-functional. This means that the ultimate user, contractors, suppliers, and the acquisition professional are organized into an acquisition team. The original skunk works, established by Kelly Johnson at Lockheed, was so organized.

The integrated acquisition team is an information-based organization that is composed of more specialists than in the traditional command-and-control organization. It is held together by the flow of information among the specialists in government and industry, regardless of organizational boundaries. Electronic data interchange (EDI) is greatly facilitating the exchange of project-related technical information among all members of the integrated acquisition team, regardless of their location.

Acquisition doctrine advocates including the customer as an active member of the integrated acquisition team. In addition, the prime contractor and major critical subcontractors contribute to the efforts of the team. This organizational relationship ensures that both the user and the supplier participate in tradeoffs among cost, schedule, performance, and supportability decisions as they are made. The characteristics of the product and method of procurement determine the tasks and activities performed by the integrated acquisition team because different products and contracting methods require diverse bodies of knowledge to procure the goods or services effectively. Therefore, tasks performed by the team vary from acquisition to acquisition.

Figure 2-1, The Acquisition Process Model, shows the events in the process occurring sequentially. A common electronic database often makes it possible to overlap events. Sharing a common database permits members of the team to work concurrently from the beginning to the end of the project, regardless of their physical location. The net result is real-time communication among team members, a reduction of rework, and a decrease in the amount of administrative lead time.

This integrated approach to acquisition management is not entirely new, having evolved from the program managementThe two terms, i.e., project and program, signify differences in the estimated value of the acquisition. A program has more scope, is more complex, and has a higher fund value than a project. In this book we use the term project manager for simplicity. However, the material pertains to both to a varying degree. concept used by DoD in the 1950s. Program management developed because traditional organizational relationships were ponderous, geared to performing repetitive routine tasks, and slow to take action because of their functional focus. The goal of the project management concept was to achieve defined objectives by concentrating resources, e.g., specialists, funds, and equipment, in a group established to perform non-routine tasks.

By definition, a program or project has the following attributes:

• A boundary separating work on the product from routine work

• Non-routine multifunctional tasks

• A fixed beginning and scheduled completion dates

• An organizational structure tailored to the characteristics of the product

• Representation from all appropriate disciplines

• A high degree of interdependency between tasks and functions

• A need to coordinate and communicate directly and frequently with other members of the project

• A membership with the authority, responsibility, and accountability for decisions

• A commitment to mutual goals and a process for resolving differences

• A management information system containing cost, schedule, and performance data

• A control process that compares current status with the planned position.

Some integrated acquisition teams have failed to realize their potential because they: (1) lack senior management support, (2) have poorly defined goals, or (3) let personnel conflicts develop among functional specialists. Specialists often try to maximize one functional approach over another while trying to minimize their responsibility and accountability for attaining the overall objectives of the acquisition. This practice easily produces instability within the integrated acquisition team.Hicks, Herbert G. 1972. The Management of Organizations: A Systems and Human Resources Approach, 2d ed. New York: McGraw-Hill, 270. One of the most important tasks of the leaders in the integrated acquisition team is to set goals and establish accountability so that the members of the team can maintain an acceptable balance between areas where they have the authority to make decisions and their responsibility to achieve the objectives of the project.

The Program Manager/Project Manager

Although there are differences in the skills and training of a program manager and those of a project manager, in practice the two terms are often used interchangeably. The Government Contracts Reference Book describes the program manager (PM) as an individual who manages a system acquisition (typically a major system acquisition) program and whose tasks include developing acquisition strategies, promoting full and open competition, and sustaining effective competition between alternative major weapon system concepts and sources, as long as it is economically beneficial and practical to do so. In the DoD the program manager reports directly to the program executive officer on all program matters.Nash, Schooner, and O’Brien, 416.The Government Contracts Reference Book also defines the position of project manager as the official responsible for planning and controlling assigned projects to achieve program goals. Typical duties of the program manager that are related to the government acquisition process include establishing program objectives; developing requirements, including purchase requests containing specifications and statements of work; obtaining required approvals; scheduling, estimating, budgeting, and controlling projects; coordinating project planning with the contracting officer; and functioning as the contracting officer’s representative or technical representative.Nash, Schooner, and O’Brien, 418. In this book, the term PM also refers to a project manager.

The PM’s role is not to perform the work individually but to accomplish project objectives through specialists working in a group or, better yet, a team situation. “As part of this process PMs must become intimate with all project stakeholders (internal and external) in an effort to understand the drivers behind the customer needs and the organizational challenges that the project will help to resolve.”The Contracting Professional as a Business Manager: 2000 National Education Seminar. 2000. National Contract Management Association, Vienna, VA, 3–2. The PM needs a broad perspective on how to lead in an event-oriented environment, i.e., balancing functional objectives with overall project needs and milestones. To accomplish this, the PM must develop a team structure for the project as well as a sense of project identification. A typical duty of the PM is to translate the project’s strategic objectives into achievable goals for the project.Nash, Schooner, and O’Brien, 418. The PM is essentially a manager of information and risk.

The PM is in charge of the program. However, the PM often has been described as having responsibility for the program but limited authority over the multifunctional and multi-organizational resources assigned to his or her integrated acquisition team. The imbalance between responsibility and authority means that the PM must accomplish things through negotiating with upper-level management and those functional managers who supervise technical specialists. Integrated acquisition teams can take on the characteristics of transient organizations because specialists become involved in the acquisition for relatively short periods at various times during the acquisition process. This means that the PM does not have direct authority over the personnel resources assigned to the project. It also means that the PM and other members of the integrated acquisition team, who have a collective responsibility to get the job done, are also vulnerable to decisions made by managers located outside the team. In their book, The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain, David A. Lax and James K. Sebenius refer to this situation as “indirect management” and state that it is faced by most PMs.Lax, David A., and James K. Sebenius. 1996. The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain. New York: The Free Press, 12. In this situation the project manager requires cooperation from members of the team, who, even when working directly for the project leader, are dependent on the function for resources, backing, and even a “good job” when the project is completed. The authors conclude that this circumstance calls for a management approach very different from the traditional “I say, you do” method. Consequently, a significant part of the PM’s job is to create and maintain a series of agreements concerning the objectives and utilization of resources on the project. With “shared authority and resources but concentrated responsibility...effective negotiation with the other shareholders is often the key to success.”Lax and Sebenius, 14.Figure 2-2, The PM As an Indirect Manager, illustrates the environment in which the PM functions.

The success of every project requires collaboration of separate bodies of knowledge, each having its own perceptions and objectives. Each profession (technical specialists) tends to regard itself as elite, with special values that may get in the way of cross-disciplinary sharing.Quinn, James Bryan, Philip Anderson, and Sydney Finkelstein. 1998. Managing Professional Intellect. Harvard Business Review of Knowledge Management. Cambridge, MA: Harvard Business School Press, 193. This can easily lead to conflict, thereby breaking down the process. The PM’s task is to discipline the acquisition process and establish a climate and a communication protocol that will ensure that the entire integrated acquisition team works together.

Primary skills to consider when looking for a PM include good communication, negotiating, and interpersonal skills. General technical and contractual knowledge are additional requirements of the job. As noted above, the role of the PM is to build a positive collaborative relationship among technical specialists on the integrated acquisition team. With today’s highly specialized work forces and the inclusion of the user and contractor on the integrated acquisition team, people involved in the project are often separated by distance and travel time.

Communication is the process by which information of the project is exchanged and can be formal or informal, in written or oral form. Timely communication is vital to the success of the project. The exchange of information among members of the integrated acquisition team using EDI is not only an effective way to communicate, but it also allows all addressees to share their knowledge with other specialists quickly and concurrently. When projects are complex or are not well defined, no one person, function, or organization may know what the full depth or range is or where the key issues reside. To take advantage of the broad technical knowledge that resides with all members of the team, an EDI protocol bringing members quickly together to focus and solve a single problem is a powerful management tool. Figure 2-3 shows how planning information, project status, and problem solving can be facilitated through what has been described as a “spider web” communications network.Quinn, Anderson, and Finkelstein, 201.

Figure 2-2 The PM As an Indirect Manager

To gain a sense of ownership, members of the team must also develop project objectives. This is most often accomplished by developing “microgoals,” which are evaluated and integrated into the overall project goal. Team participation gives members a sense of ownership and commitment to the common purpose as well as the plan on how the teams will get there. The members should also be evaluated on how well they participate in the team process by cooperating and sharing their knowledge.

The Contracting Officer

The Government Contracts Reference Book describes a contracting officer (CO) as an employee of the government with the authority to bind the government legally by signing a contract.Nash, Schooner, and O’Brien, 127. The CO is the person with the authority to enter into, administer, and terminate contracts, and to make determinations and findings.FAR 2.101. The CO’s role is to secure supplies and services from sources outside the organization. COs are also responsible for ensuring performance of all necessary actions, employing effective contracting practices, complying with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships.FAR 1.602–2. In accomplishing this mission, the CO must understand the customer and its needs and maintain a good relationship with the cross-functional integrated acquisition team and the commercial contractors. There are four categories of CO, each having different tasks and responsibilities. The purchasing or procuring contracting officer (PCO) has authority to enter into a contract; the administrative contracting officer (ACO) strictly administers the performance of a contract; the termination contracting officer (TCO) is responsible for contract termination; and the corporate administrative contracting officer (CACO) performs selected contract administration functions on a corporate-wide basis.Nash, Schooner, and O’Brien, 127. The relationships between the PCO and ACO, as defined in Part 42 of the FAR, will be discussed in Chapter 7.

Figure 2-3 Communications Protocol for the Integrated Acquisition Team

One of the most significant differences between the buyer-seller relationship in a government contracting environment and the buyer-seller of commercial goods is the fact that the government is not bound by unauthorized acts of its employees. Therefore, unless the act is authorized, the government is not obligated to comply. Consequently, it is difficult for those outside the government to determine the exact status of government employees they are dealing with. In this situation case law is clear: “...anyone entering into an arrangement with the Government takes the risk of having to accurately ascertain that he who purports to act for the Government stays within the bounds of his authority.”Cibinic, John, Jr., and Ralph C. Nash, Jr. 1985. Administration of Government Contracts Washington D.C.: The George Washington University, Government Contracts Program, 23–24.

The CO and CM can no longer consider themselves as independent agents viewing the integrated acquisition team from the outside. Rather, they are integral members of the integrated acquisition team. Dr. Ralph C. Nash, Jr., founder of the government contracts program at The George Washington University, feels that the Guiding Acquisition Principles made an important contribution by recognizing the CO as a member of the integrated acquisition team. The principles “speak primarily in terms of the integrated acquisition team,” thus assuming that “the CO will function in the future as a member of a team and not as the person responsible for the back end of the procurement process.”Nash, Ralph C., Jr. 1997. Training the Contracting Officer of the Future. Contract Management (March): 16. The contracting profession will require that future contracting professionals be prudent business managers because of how the profession and the overall work force will change.The Contracting Professional as a Manager: 2000 National Education Seminar. 2000. Vienna, VA: National Contract Management Association, 1–2. Today the CO must “understand, accept, and project corporate values, goals, and objectives instead of a more limited contracting view of the world.”Doyle, 42.

The PCO operates as an agent of the federal government whose authority and responsibilities are established by law and agency policies. Most have the power to execute two-party agreements, within defined limitations. The FAR’s acquisition principles stipulate that the contracting member of the integrated acquisition team “must have the authority to the maximum extent practicable and consistent with law to determine the applicable rules, regulations, and policies on a specific contract.”FAR 1.102-4 (a).

Acquisition doctrine encourages individual initiative and use of sound business judgment. Some of the rules that previously constrained CO performance have been removed. Policy now permits government members of the team to implement a specific strategy, practice, policy, or procedure that is in the best interest of the government when it is not specifically prohibited by the FAR, executive orders, and appropriate directives.FAR 1.102-4 (e). This policy statement initiative enables government personnel to be more proactive. The CO can add significant value to the overall product by bringing timely expertise to critical issues.

Professor Ralph Nash considers critical skills for COs in the 21st century to be: “knowledge or strategy and tactics; market knowledge and research expertise; and total familiarity with all of the various procurement tools available to purchase goods and services coupled with the ability to use them to the customer’s advantage.”The Contracting Professional as a Manager: 2000 National Education Seminar. 2000. Vienna, VA: National Contract Management Association, 1–10.

The PCO is performing in the strategic role during the requirements determination and acquisition planning phases. The PCO makes a critical contribution during the determination of need phase of the acquisition process. At this time the PCO provides data on products available in the commercial market, characteristics of the market, and industry practices. Some of these data are valuable in developing the acquisition plan and negotiation plan and strategy. Although the users have final say in the selection process, it is the PCO who is responsible for providing qualified candidates. During acquisition planning the PCO is deeply involved in procurement planning, i.e., evaluating the extent of competition that is achievable, selecting the contracting method, determining the most appropriate contract type, and defining how risk and opportunities will be addressed in the solicitation. The PCO’s tactical knowledge is used during the negotiation and contract award phases. At this time the PCO assumes a dominant role in source selection, negotiation, contract award, and the subsequent development of the conforming contract.

With the increase in communication between functions brought on by the use of electronic data interchange (EDI), the role of the procurement office is changing from being oriented mainly toward transactions to managing the procurement system. This is a significant change, as the buying offices had previously limited their role through procurement rules and regulations.Drake, Daniel J. 1996. Procurement Manager’s Guide to EC/EDI. Vienna, VA: Holbrook & Kellog Inc., 5–17. The CO must have a systems view. As the federal government re-engineers itself, procurement can now be easily linked with functions such as finance, inventory management, receiving, property management, and payment. It is quickly becoming an integrated system that cannot be separated. COs must understand these interfaces and functional relationships so that any changes to procurement procedures are compatible with the overall integrated system.Drake, 5–17.

The contract document should be thought of as “common language across the government/contractor team....” Placing the contract on the project’s home page, where it is easily accessible to the integrated acquisition team, helps ensure that the document can easily be read and understood. Therefore, it is imperative that the entire contract document not only record the negotiated agreement so that the intent of the parties is clear, but it must also facilitate the administration of work, provide an incentive for the contractor to perform, allocate risk, and describe terms of payment. The conforming contract has taken on even greater importance than before because with today’s capabilities of EDI and the ability to have a home page dedicated to a single project, it is now easily accessible to all. The modern contract, with an Integrated Master Schedule (IMS) and Integrated Master Plan (IMP), provides a plan that can be referenced by the entire integrated acquisition team. Therefore, its function as a document that will stand up in a court of law, although still very important, is not the only reason for its existence.

In addition to defining requirements, the conforming contract is a primary source of information that can be used to determine if there are any variances from contract baseline.In the case of system acquisitions, the program baseline, which is expressed in terms of cost, schedule, performance, and supportability, and the contract baseline should be the same. The PCO is responsible for managing contract changes and, therefore, must maintain continuous communication with his or her counterpart in industry as well as other members of the integrated acquisition team. Contract closeout or termination requires the contracting officer to orchestrate the final disposition of property, deliverables, data, and final payments.

An integral part of the integrated acquisition team organization during all phases is the local area contract administration activity of in-plant government representatives. They can assume part of the administrative workload and are a valuable conduit for information on contractor performance for the entire integrated acquisition team. To ensure their participation, the PCO must define specifically the supporting administrative functions to be performed by the ACO. The tasks to be performed at the contractor’s plant by the ACO should be specifically delineated in a delegation agreement between the ACO and PCO. This agreement also should be coordinated with the PM to ensure that it is consistent with the allocation of tasks and activities of the team.

In the private sector, quality and reduced time to market have replaced price as the key to increased market share and profit margins.Burt and Pinkerton, 4. In addition, in the private sector approximately 70 percent of major U.S. manufacturing firms have adopted a materials management concept that coordinates all planning, organizing, and controlling activities related to material and inventory. This action was taken because of the interdependency of such functions as purchasing, inventory management, production planning, scheduling, transportation, receiving, materials handling, and warehousing. These functions, which had traditionally been located in different departments, are in reality subsets of what is now called a materials management system. Therefore, functional policies and activities must be coordinated on a macro basis. This is done in one of two ways: (1) establishing a set of reporting, communicating, and control procedures designed to foster coordinated decision making; or (2) by arranging the organization to consolidate some of these individual functions in a single organization under one manager. In many materials management organizations the purchasing process has been complemented by what has been called a procurement function. In industry the procurement function now has a strategic focus that includes developing material and service requirements, performing market studies, performing make-or-buy analysis, formulating suppliers’ product and quality standards, and contracting for transportation services.Dobler, Donald W., and David N. Burt. 1996. Purchasing and Supply Management. 6th ed. New York: McGraw-Hill, 38.

What is the future role of the CO? In November 1999 the Contract Management Institute (CMI), the National Contract Management Association (NCMA), a not-for-profit foundation, published the results of a research report by PricewaterhouseCoopers LLP titled “Survey of Contracting Professionals—Emerging Demands of a Changing Profession.” Respondents to the survey were from the public and private sectors as well as professional associations. The survey found that while many of the best practices best-value contracting and managing supplier relationships had not yet been well established, “...the role of the contracting and purchasing professional is far less clerical than it was only a short time ago, more strategic and team-oriented in its contribution to successful outcomes, more specialized in its requirements for effective competencies and skills, more responsible for results, and more conscious of the needs to use time as a critical component.” Although “contracting was considered a secondary business-management function that was too process- and rules-oriented...” the respondents also “predicted that the success of contracting and purchasing officials would be measured by business-management performance metrics rather than volume of transactions.”Macfarlan, Gregor. 2000. The Buyer as a Business Manager? Contract Management (August): 29.

Other Government Team Members

Acquisition doctrine calls for forming multi-disciplinary teams working to facilitate the delivery of a specific product or service to the ultimate user. The integrated acquisition team’s goal is to optimize the product by involving all functional bodies of knowledge through integrated decision making. Implementing a risk management and opportunities program also rests with the integrated acquisition team.

One of the project manager’s first duties is to assemble the integrated acquisition team. While organizing the team, the PM must determine what bodies of knowledge (specialists) will be required during the life cycle of the project. Any body of knowledge that will have an effect on the performance and ownership cost of the product must be represented on the team. Factors such as product characteristics, the probable contracting method, and the type of contract also must be considered when determining the knowledge and skills needed. Knowledge and skills required by the team also change as a project progresses through its life cycle. The size of the team is also a function of what phase of the life cycle the product is in. Figure 2-4, Bodies of Knowledge Involved in a Project, is a menu of the bodies of knowledge the PM should consider when building the integrated acquisition team.

The bodies of knowledge often found on an integrated acquisition team are contracting, logistics, planning and control, engineering, quality assurance, configuration control, information systems, reliability and maintainability, testing and evaluation, manufacturing and production, property management, subcontract management, cost estimating, financial, and legal.O’Brien, Dan. 1998. Briefing during 11th Annual Academic Conference for Contract Management Educators, National Contract Management Association. 29 October 1998, Monterey, CA. The organization’s functional staff is responsible for supporting the integrated acquisition team, which includes human resources management aspects, such as technical competency and development. To be effective each team member must have the resources and be empowered to achieve the project’s objective.

The availability of EDI and the Internet has enabled representatives from other geographic locations to participate in the collective decision-making process. An example of communications within the team was illustrated in Figure 2-3.

Figure 2-5 illustrates three types of integrated acquisition teams and their interrelationships. (It is based on the DoD model described in Part 7 of DoD 5000.2R, dated January 4, 2001.) The integrated acquisition team is a multifunctional organization assembled around the product or service being procured. Members advise the PM. The concept is to manage the acquisition by integrating all acquisition activities, from determining the requirement through its deployment to simultaneously optimizing the product and its manufacturing and sustaining processes to meet cost, schedule, performance, and cost-of-ownership objectives. Note that Figure 2-5 lists an Overarching Integrated Acquisition Team. This team provides assistance, oversight, and review through the acquisition process. The Overarching Integrated Acquisition team is led by an individual at least one supervisory level above the PM. It is also responsible for chartering the Intermediate Integrated Acquisition Team and the Working-Level Integrated Acquisition team. At the lowest level there is a Working-Level Integrated Acquisition Team, whose role is to help the PM plan program structure, document and resolve issues, and develop and administer the MR&O Handling Plan. The role of the Intermediate Integrated Acquisition Team, which is formed at the working level, is to coordinate the efforts of the Working-Level Integrated Acquisition Team and handle issues assigned to another team. The Intermediate Integrated Acquisition Team and the Working-Level Integrated Acquisition Team are normally led by the PM or representative of the PM. (Because of the size of the acquisition, only the Working-Level Integrated Acquisition Team will be required to satisfy the work load.) The customer may also participate in meetings of the Overarching Integrated Acquisition Team. Industry representatives, including support contractors, provide information, advice, and recommendations to the team, although they are not formal members of a team. Because of the sensitive nature of discussions, industry representatives do not participate in deliberations by any integrated acquisition team.

Figure 2-4 Bodies of Knowledge Involved in a Project

Figure 2-5 The Three Types of Integrated Acquisition Teams

Although the structure of an organization does not guarantee success, effective communication and coordination are essential among the various bodies of technical knowledge not only within the government’s buying office but between the contractor and critical subcontractors as well. The integrated team concept represents a departure from the traditional functional orientation, which is characterized by vertical communication via the chain of command, often described as resembling a stovepipe. An integrated product team is built around the product, with both vertical and horizontal communication.

The ability to coordinate and communicate horizontally is evident in this organizational chart. The overarching level of the integrated acquisition team includes the PM and the leadership of the government agency as well as senior representatives from the customer (ultimate user) and participation by the prime contractor. Their role is to provide direction, including funding, and to review the project’s status.

At the working level are the technical specialists associated with the bodies of knowledge in the government’s buying office. This is the original integrated acquisition team cadre of technical specialists who have been instrumental in performing market research, working with the customer in developing the requirements, developing the acquisition plan, finalizing and issuing the solicitation, evaluating proposals, and making the contract award. After contract award this group is retained to manage the project and the risks and opportunities associated with meeting the acquisition objectives.

Participants in the contractor segment of the working level are the same as the government’s. Critical subcontractors are also included so that information on their product, production, and product support requirements can be shared with the integrated acquisition team on a real-time basis. The contractor and critical subcontractors are also responsible for participating in managing the risks and opportunities associated with the acquisition.

A study by RAND of risk management in the Air Force’s F-22 Engineering and Manufacturing Development Program noted that the acquisition team cited the lack of understanding of the requirement as one of the three basic causes of risk.Johnson, Robert V., and John Birkler. 1996. Three Programs and Ten Criteria: Evaluating and Improving Acquisition Program Management and Oversight Processes Within the Department of Defense. RAND, National Defense Research Institute. Prepared for the Office of the Secretary of Defense, Santa Monica, CA, 41. The other two causes were the lack of mature technology to satisfy the requirement and lack of a planning and tracking system to measure progress. Participation by the customer as a member of the integrated acquisition team is one way of managing the risk of not understanding the customer’s desires. Including the customer on the integrated acquisition team from the beginning greatly facilitates communication and coordination. An example of this can be found in the Ford Motor Company, which in 1979 consulted with customers, including a car-rental company, a women’s committee, and other consumers, when designing the Taurus automobile. This was done rather than relying on the engineers and manufacturers to anticipate the customers’ needs as they had done in the past.Taub, Eric. Taurus: The Making of the Car That Saved Ford. New York: Penguin, 131. The net result was a design that focused on the customer and a car that turned around the fortunes of the Ford Motor Car Company.

The Contractor As Member of the Integrated Acquisition Team

Historically the relationship between the buyer and seller in this country has been more adversarial than fraternal. Suppliers were played off against each other and squeezed for lower prices.Bowersox, Donald J., Patricia J. Daugherty, Cornelia L. Droge, Richard N. Germain, and Dale S. Rogers. 1992. Logistics Excellence: It Is Not Business as Usual. Burlington, MA: Digital Press, 34. There has since been a growing realization that the needs of the customer must be integrated into the manufacturer’s design and production process as early in the acquisition as possible. Therefore, including the contractor as a participant in meetings of the integrated acquisition team is an attempt to realize the advantages of a positive buyer-seller relationship. Dr. Deming said: “Purchasing should be a team effort, and one of the most important people on the team should be the chosen supplier.”Walton, Mary. 1986. The Deming Management Method. New York: Perigee, 64.

Industry also has recognized that to meet the competitive demands of today, the procurement effort must be proactive rather than reactive. Commercial firms are focusing attention on increasing productivity, shortening delivery times, and integrating materials management into the total operations of the organization. The heart of this concept is the cross-functional procurement team as part of the Integrated Procurement System (IPS). This team includes representatives of design engineering, manufacturing engineering, purchasing, manufacturing, and quality control, as well as key suppliers.Burt and Pinkerton, ix. Suppliers work as members of the team under a strategic alliance, long-term contract, or blanket purchase order.

In large or complex programs, contractor participation as members of the acquisition team should also involve the key suppliers. Earlier in this chapter it was noted that, on average, contractors contract over 60 percent of the goods and service content of a product. This percentage can go even higher as the technical content of products increases and outsourcing is seen as a way to cut costs and accelerate development time. Long-term strategic alliances are being formed, and firms are becoming more interdependent. This means they are learning to share information to make product and product decisions jointly. Ravi Vankatesan is quoted as saying, “Today manufacturing focus means learning not to make things—how not to make the parts that divert a company from cultivating its skills—parts its suppliers could make more efficiently.”Venkatesan, Ravi. 1992. Strategic Sourcing—To Make or Not to Make. Harvard Business Review (November-December): 98.

DoD Implementation of the Integrated Acquisition Team Concept

“I am directing a fundamental change” were the words used by then-Secretary of Defense William Perry on May 10, 1995, when he endorsed the implementation of integrated product and process development (IPPD) through the use of integrated product teams (IPTs).Hocevar, Susan P., and Walter E. Owen. 1998. Team-Based Redesign a Large-Scale Change: Applying Theory to the Implementation of Integrated Product Teams. Acquisition Review Quarterly5(2): 147.

IPPD is described as “a management process that integrates all activities from product conception through production and support, using a multifunctional team, to simultaneously optimize the product and its manufacturing and sustaining process to meet cost, schedule, and performance objectives.DoD Regulation 5000.1. The Defense Acquisition System, Enclosure E, paragraph E2.1.6, 23 October 2000.

Figure 2-6, The Generic IPPD Iterative Process, shows the IPPD as an open process, i.e., it is influenced by factors outside its environment. These factors include annual funding, changes in political priorities, oversight, policy of regulatory agencies, suppliers, changes to the threat, and competitive products. The IPPD process recognizes the comprehensive requirement to modify and align team structures, analytical and decision tools, and process to achieve optimal performance as defined by the customers’ criteria.

Figure 2-6 The Generic IPPD Iterative ProcessHocevar and Owen, 150.

The IPPD model represents a disciplined approach used to organize activities, scope out issues, identify and manage risk, and pursue opportunities. Requirements are initiated based on input from the ultimate customer and are refined through market research. The iterative process enables the integrated team to focus on several product issues simultaneously. Tools available to the team include documentation, data systems, and methodologies that enable cross-functional experts to share and integrate information and make decisions at the lowest level commensurate with the magnitude of the issue involved. As noted earlier, teams are made up of the stakeholders, who are empowered to make decisions in their areas of expertise. Output is the product that measures the success of the integrated team.

This IPPD concept means that the IPT can optimize the cost, schedule, performance, and supportability objective of the acquisition. The IPPD requires bodies of knowledge represented by members of the multifunctional team, who can interact simultaneously. The integrated team can also receive input from the outside environment. The IPPD/IPT management framework remains functional for the entire life cycle of the product or service.DoD Regulation 5000.2-R, paragraph E2.1.6.

DoD guidance states that the chain of command includes the program manager, program executive officer, Component Acquisition Executive (CAE) reporting through the Head of the Component, and Under Secretary of Defense for Acquisition, Technology, and Logistics (USD AT&L) or Assistant Secretary of Defense for Command, Control, Communications, and Intelligence (ASD C&I). However, to streamline the process, no more than two levels of review are to exist between the program manager and the Milestone Decision Authority.DoD Regulation 5000.1, The Defense Acquisition System, paragraph 4.5.6, 23 October 2000.

The Milestone Decision Authority shown in Figure 2-7 is an individual designated in accordance with the criteria established by the USD AT&L of ASD C&I to approve entry of an acquisition program into the next phase of the acquisition process.DoD Regulation 5000.1, Enclosure E, paragraph E2.1.5.

DoD 5000.2-R establishes the following basic tenets for the working-level IPT (WIPT):

• The PM is in charge of the program

• IPTs are advisory bodies to the PM

• Direct communication between the program office and all levels in the acquisition oversight and review process is expected as a means of exchanging information and building trust.

Figure 2-7 The DoD Integrated Product Team Structure for Oversight and Review

All WIPTs have the following roles and responsibilities:

• Assisting the PM in developing strategies and planning programs as requested by the OM

• Establishing an IPT plan of action and milestones

• Proposing tailored documentation and milestone requirements

• Reviewing and providing early input documents

• Coordinating WIPT activities with the OIPT members

• Resolving or elevating issues in a timely manner

• Assuming responsibility for obtaining concurrence on issues, documents, or portions of documents.DoD Regulation 5000.2-R. Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs. Part 7, paragraph 7.6.3.

Communications Protocol

One FAR performance standard for the integrated acquisition team is to conduct business with integrity, fairness, and openness. This requires open communication among team members, internal and external customers, and the public.FAR 1-102 (c). In 1996 the RAND Corporation published a review of the management of three DoD acquisition programs as a source for recommending improvements in acquisition management procedures, using lessons learned from other DoD major programs to serve as a basis of their assessment. Communication was one of the 10 critical success factors selected by RAND. The criteria for evaluation of the effectiveness of communication include the following factors:

• Was communication completely open?

• Were unique, innovative communication techniques being followed?

• Was communication, both verbal and written, continuous?Johnson and Birkler, 9.

RAND’s study also cited the use of the contract as the “common language across the government/contractor team” by the F-22 System Program Office (SPO) as the way to ensure that the team was responding to a common set of plans, processes, and controls. This “common language” was found in the “specifications and a requirements-traceability matrix, the Statement of Work, Work Breakdown Structure, integrated master plan, integrated master schedule, Cost/Schedule Control System, system responsibility matrix, technical performance measures, and award fee plan (if applicable).Johnson and Birkler, 41. Most of these documents are, or can be, included as part of the contract. Not only do they establish the common language, but they also define the contract baseline. All members of the team must know what the contract says; therefore, it is a primary responsibility of both government and contractor personnel assigned to the integrated acquisition team to see that the contract is free of ambiguous legalese and that it reflects current requirements. It also must be accessible to all members of the team. With the Internet capabilities available today, the contract can easily be included on the project’s home page.