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SMG 2610.1

FDA STAFF MANUAL GUIDES, VOLUME III - GENERAL ADMINISTRATION

PROCUREMENT AND SUPPLY MANAGEMENT

PREPARING REQUISITIONS FOR ALL CONTRACT ACTIONS WITH AN ESTIMATED VALUE GREATER THAN THE SIMPLIFIED ACQUISITION THRESHOLD

Effective Date: 08/12/2011

[PDF Version]

 1. Purpose
 2. Definitions and Concepts
 3. Policy and Responsibilities
 4. Effective Date
 5. History

1. PURPOSE 

This guide sets forth the FDA policy and procedures for preparing requisitions for all contract actions greater than the Simplified Acquisition Threshold (SAT). It applies to all new awards (including all options) and all modifications executed by the Office of Acquisitions & Grants Services (OAGS) with an estimated value greater than the SAT.

2. DEFINITIONS AND CONCEPTS 

A. Acquisition Planning: Acquisition Planning is the strategic development of a comprehensive plan for meeting FDA’s requirements in a timely manner and at a reasonable cost. It is an integrated process requiring the coordinated efforts of all personnel involved in the acquisition. Acquisition Planning enables FDA to meet its socioeconomic goals, and support full and open competition and commercial item purchases to the greatest extent practicable.

B. Acquisition Team (Team): The Team consists of program and contracting representatives to include the Contracting Officer, Contract Specialist, Project Officer (PO)/ Contracting Officer Technical Representative (COTR), and the end user or other designated needed (i.e., Cost Price Analyst, legal counsel, etc.)

C. Advance Acquisition Plan (AAP): The AAP, an effective management tool for acquisition planning and tracking purposes, identifies all FDA anticipated acquisition actions over $150,000 for a given fiscal year. The AAP is a compilation of all individually submitted FDA Center Acquisition Plans (CAPs) and is regularly updated to capture any changes reported in the monthly CAP submittals. Its successful completion requires the collaborative effort of all key acquisition personnel in OAGS and the FDA Centers/Offices.

D. Center Acquisition Plan (CAP): Each Center must develop its own individual CAP for a given fiscal year. The CAP must provide a sufficiently clear and detailed description of each requirement (planned contract w/options, modification, delivery order, task order, purchase order, grant, interagency agreement and options to be exercised) having an estimated value anticipated to exceed $150,000. As part of the CAP submittal, Centers must create a Center Item Number for each item for management tracking purposes. Centers are required to present their initial CAPs to the OAGS Acquisition Management Team prior to the ensuing fiscal year. CAP updates are to be submitted to OAGS by the last calendar day of each month.

E. Contracting Officer (CO): The CO is a Federal employee having the sole Government Official having the authority to legally bind the Government by signing a contractual instrument (enter into a contractual agreement), administer and/or terminate contracts, and make related Determinations and Findings. A written Certificate of Appointment (Warrant) sets forth the extent and monetary limits of a Contracting Officer’s authority.

F. Contracting Officer Technical Representative (COTR): The COTR is a. Federal employee, appointed in writing, who serves at the Contracting Officer. The COTR does not have the authority to bind the Government by either signing a contract or entering into a contractual arrangement. The COTR is responsible for ensuring contractor performance complies with the terms and conditions of the contract, to include meeting all technical requirements and delivery dates in a timely manner. The COTR monitors contractor performance to ensure the work and costs are within the estimated costs and/or price of the contract. COTRs must satisfy HHS FAC-COTR training and certification requirements (HHSAR 301.604) however, certification alone does not guarantee appointment. A COTR must be appointed by a Contracting Officer who sets forth the COTR’s responsibilities and authority in the Letter of Appointment.

G. Contract Specialist (CS): The CS is a Federal employee employed by OAGS who may negotiate, administer, and close-out contracts subject to the review and approval of the Contracting Officer. The CS advises the PO/ COTR and serves as the main Point of Contact throughout the acquisition process.

H. iProcurement: As part of HHS’s Unified Financial Management System (UFMS), iProcurement is a web-based application where FDA’s requisitions are entered, approved, and tracked on a real time basis. Most requisitions are entered into iProcurement by an FDA designated Requestors/Requisitioners (budget approval official or other approval official), Requestors/Requisitioners must identify the appropriate funding information (Common Account Number ‘CAN’ and Object Class) for each line item when entering the requisition [sometimes the correct CAN is not known, i.e. – Central Funds; if the CAN is incorrect it must be corrected by one of the approval points]. When entered, the requisition is routed through predefined approval chains (if previously generated); approval chains may be modified. With the final approval of the Center or an external approval source (i.e., Chief Information Officer), the iProcurement requisition creates a commitment record in UFMS. iProcurement may also be used to receive goods and services.

I. Market Research: Market research is the process by which FDA uses to seek out potential sources. In accordance with FAR and HHSAR, Market Research must be conducted for all requirements, the extent of which will vary depending on the complexity of the requirement. Conducted by the Acquisition Team, the process can include contacting knowledgeable Government and industry sources regarding market capabilities; reviewing recent market surveys for same/similar requirements; publishing formal requests for information; reviewing manufacturer catalogs, product literature and business websites; information meetings or pre-solicitation conferences to engage potential offerors early on into the acquisition process. The findings are heavily relied upon when drafting the Request for Contract, the Statement of Work, the Independent Government Cost Estimate, and justifications. Market Research is the means by which FDA meets its socioeconomic goals and support full and open competition and the purchase of commercial items to the greatest extent practicable.

J. Performance Incentive: A performance incentive is a contractual provision used to motivate contractor performance. It provides the contractor an opportunity to earn a higher profit or fee based on his performance which is tied to cost, delivery or technical quality. Incentives are typically incorporated into the Quality Assurance Surveillance Plan (QAP) and specified as performance targets. When the contractor exceeds these targets there in the opportunity for an increase; however, it the contract fails to meet the targets the profit or fee may be reduced.

K. Performance Work Statement (PWS): A PWS is a Statement of Work specifically developed for performance-based acquisitions. It is a written document, clearly describing the work requirement objectives in terms of measurable outcomes or results. When preparing a PWS, COTRs must, to the maximum extent practicable, (1) describe the work in terms of the purpose of the work vs. “how” the work is to be performed or the hours to accomplish it; and (2) ensure the work is assessed against measurable performance standards (see QAP).

L. Project Advisory Group (PAG): The PAG consists of three or more persons designated by the sponsoring Center/Office to serve as an advisory and review body on technical matters during the acquisition process. The COTR is responsible for planning, organizing, and convening meetings of the PAG. The PAG may be responsible for one or more of the following activities for a given requirement: (l) reviewing the proposed Statement of Work, (2) establishing proposal evaluation criteria, (3) evaluating technical and cost proposals, (4) analyzing contractor progress during the performance period, and (5) executing a final technical evaluation of the contractor's accomplishments. A minimum of 50% of the technical proposal evaluators, regardless of their technical experience, must complete the Federal Acquisition Institute on-line course "CLC 222 – Contracting Officer’s Representative (COR)” (available at www.fai.gov) or an equivalent. They are not required to be FAC-COTR certified.

M. Project Officer (PO): The PO is a Federal employee who provides the technical expertise to the Acquisition Team, and confers with the Contract Specialist/Contracting Officer prior to contract award or the award of task/delivery order. The PO may be named COTR after contract award, but must meet HHS’s COTR training and certification requirements (HHSAR 301.605) prior to appointment. In this SMG, Project Officer is considered to be synonymous with Contracting Officer Technical Representative (COTR), and the latter term will be used hereafter.

N. Quality Assurance Surveillance Plan (QASP): The QASP, a critical quality control tool, is uniquely tailored to correspond to the PWS objectives. It specifies the area of work which requires surveillance, the method of surveillance, the surveillance site and time, and the significance and effect of the results. The QASP should clearly describe how FDA will survey, observe, test, sample, evaluate and document contractor performance. Each QASP should be written to ensure the Government’s end objectives are met. . It is most commonly: (1) produced by the Government and disseminated with the PWS in the solicitation, (2) produced by the contractor when a solicitation, containing a Statement of Objectives, requires a QASP be submitted with the PWS in the contractor’s proposal, or (3) developed concurrently by the Government and the contractor during the negotiation of the contract award.

O. Simplified Acquisition Threshold (SAT): The SAT, established by the Federal Acquisition Streamlining Act of 1994, provides the monetary threshold for all acquisitions. The exception to this guidance if for supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack in accordance with FAR 2.101. The SAT is increased to $150,000 (to include all options) by FAC 2005-45, issued August 30, 2010.

P. Sponsor: The Sponsor is the Center/Office having the specific acquisition requirement and responsible for the commitment of funds for the proposed contract.

Q. Statement of Objectives (SOO): A SOO is a Government-prepared document incorporated into a solicitation that provides maximum flexibility for offerors to propose innovative or cost-saving concepts, designs, or approaches for performance-based acquisitions. It identifies the overall, basic, top-level objectives of the acquisition and is the focal tool for both Government and offerors. Solicitations containing a SOO may require the contractor draft and submit a PWS and QASP with his proposal.

R. Statement of Work (SOW): The SOW is defines the government’s need. It describes the actual work to be performed by the contractor, which an offeror must address in his proposal. The SOW includes (1) specifications or other minimum requirements; (2) quantities; (3) performance dates, including deliverables schedules and option periods; (4) time and place of performance; and (5) quality of performance. It establishes the baseline for which contractor performance will be measured by.

S. Unified Financial Management System (UFMS): UFMS is an integrated system allowing purchasing functions to flow directly to Accounts Payable and the General Ledger modules.

3. POLICY AND RESPONSIBILITIES 

PREPARATION OF THE REQUEST FOR CONTRACT (RFC)

The RFC serves as the official request for initiating a contract action in accordance with this SMG. The RFC should contain all necessary approvals and authorizations for the proposed contract action, and identify all administration details and funding commitment information. Unless a Center/Office (Center) is working with OAGS for advance planning purposes regarding a given requirement, Centers must submit a requisition for each RFC through iProcurement before OAGS will process it. When entering a requisition over $1500, 000. Centers must enter the Center Item Number reflected in their CAPs in the iProcurement Requisition 'Description' field. In addition, the RFC must include either a completed HHS Acquisition Plan (AP) or, for smaller and less complex actions, a Memorandum of Need (MON); requirements for each document are identified in Sections 3.A. and 3.B. of this SMG below:

A. REQUIREMENTS FOR THE ACQUISITION PLAN (AP).

The Contracting Officer Technical Representative (COTR) should seek the assistance of the Contracting Officer (CO)/Contract Specialist (CS) as early as possible when developing an AP (HHSAR 307.104(c) and (e)). Unless revised by mutual agreement, the PO is ultimately responsible for completing and submitting an accurate and approved AP to OAGS no later than the date agreed upon by the CO and PO in the acquisition milestone schedule (see Part V of the AP).

An approved AP is required for all proposed acquisitions expected to exceed $500,000 (inclusive of options), in accordance with HHSAR 307.7101 with the following exceptions:

1. Letter contracts

2. Unsolicited proposals

3. Regulated utility services available from only one source

4. Proposals under the Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs

5. Acquisition of commercial items/services – see FAR 2.101, including orders placed under FSS contracts meeting the definition of a commercial item/service, and not exceeding $6.5 million [$12 million for acquisitions as described in FAR 13.500(e)]

6. Task orders or delivery orders of any dollar amount placed under (i) an IDIQ contract, other than a GWAC; or (ii) a BPA, provided there is an approved acquisition planning document for the original action, and there is no significant deviation from that plan.

7. Orders of any dollar amount placed under HHS-wide (HWAC) strategic sourcing vehicles

8. Contract/order modifications that (i) exercise options; (ii) only provide additional funding; or (iii) make changes authorized by the Changes clause.

9. Assisted acquisitions (HHSAR 317.7002) processed pursuant to an interagency agreement. OPDIV must comply with requirements specified in 317.5 Interagency Agreements under the Economy Act and 317.70, Multi-agency and Intra-agency Contracts

10. In urgent or other justifiable cases, such as an emergency acquisition (FAR Part 18) the Director of OAGS may waive in writing the requirement for completion of an AP. The request for waiver will not be approved if the waiver request is based on the lack of advance planning. At a minimum, a waiver request must include all of the following:

a. description of the requirement, including estimated cost/price and period of performance (inclusive of options)

b. The rationale for the request to waive the AP.

c. Signatures of the PO and CO.

A copy of the HCA approved waiver must be provided to HHS within 5 business days of approval.

An electronic copy of the AP and waiver request may be downloaded at http://www.hhs.gov/policies/hhsar/subpart307-71.html#307.7103Format.

B. REQUIREMENTS FOR THE MEMORANDUM OF NEED (MON).

An approved MON is required for acquisitions not requiring an AP, other than those assisted acquisitions processed pursuant to an interagency agreement. Each MON ordinarily consist of (6) parts, as provided in Sections 3.B.1. through 3.B.6. below:

The COTR should seek the assistance of the Contracting Officer (CO)/Contract Specialist (CS) as early as possible when developing the MON. The COTR is ultimately responsible for completing and submitting an accurate and approved MON to OAGS in a timely manner, one that is sufficient to accommodate the respective Service Level Agreements (SLAs) posted on the FDA intranet. The coordinating CO will make all final decisions regarding the most appropriate SLA for each specific requisition.

COTRs should also use the content requirements of the AP as a reference in determining what other information and documentation is necessary to support the intended acquisition. Alternatively, Centers may prescribe use of an AP for acquisitions excepted under HHSAR 307.7101(a) (i) through (a) (viii).

4. EFFECTIVE DATE 

The effective date of this guide is August 12, 2011.

5. Document History  -- SMG 2610.1, Preparing Requisitions for all Contract Actions with an Estimated Value Greater than the Simplified Acquisition Threshold

STATUS (I, R, C)DATE APPROVEDLOCATION OF CHANGE HISTORYCONTACTAPPROVING OFFICIAL
Initial06/01/2009N/aOC/OO/OM/OSS/OAGSGlenda Barfell, Director - OAGS
Change06/04/2009Sect. 3B; Document HistoryOC/OO/OM/OSS/OAGSGlenda Barfell, Director - OAGS
Revision8/12/2011N/aOC/OO/OM/OSS/OAGSGlenda Barfell, Director - OAGS