CHAPTER 1.Reform of the Federal Acquisition System

This book is written for members of the acquisition team, especially contract managers, to show how they can meet the challenges of change brought about by: (1) the crusade to make the federal government more efficient and user friendly, (2) the end of the Cold War, and (3) improved communications technology. A book on this subject is important because the “Reinvention of Government” initiative of 1994 has kicked off the most extensive revolution in acquisition and logistic processes since the end of World War II. In addition, everyone involved in the buying or selling of goods and services in the federal market must understand the doctrine upon which these changes to the acquisition process are founded and how they will affect how the federal government does business.

The Department of Defense (DoD) adopted the term acquisition in 1970 as an alternative to the term procurement. Acquisition became part of the government-wide regulatory system in 1984 with the issuance of the Federal Acquisition Regulation (FAR). In The Government Contracts Reference Book, the authors point out that the terms acquisition and procurement are synonymous. Procurement is used in the United States Code, while acquisition is usually used in the FAR. Acquisition is defined in the FAR as:

. . .the acquiring by contract with appropriated funds of supplies and services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

A successful acquisition is built on relationships. Not only is a constructive association between the buyer and seller necessary, but real-time linking between their functional staffs and collaborative relationships within the integrated acquisition team are vital as well. In part this is due to the exponential growth of the Internet and its by-product the Website. These tools are erasing the time, place, and organizational barriers that once made acquisition a line-flow process. The hypothesis of this book is that a proactive approach to acquisition management is a prerequisite to providing the user with a best-value product when and where it is needed. Keys to achieving this objective are to reduce procurement cost through: (1) understanding that the key element in the development of a product or service is a strategic relationship between the contractor and its suppliers, (2) enhancing market research techniques, (3) implementing a cross-functional integrated acquisition team approach, (4) focusing on managing the risks and opportunities associated with the acquisition, (5) using the contract agreement as the common language by all members of an integrated acquisition team, and (6) maximizing the use of electronic data transfer.

The objective of this first chapter is to illustrate how the federal government is responding to pressure from its constituents by being more responsive and cost-conscious. An outgrowth of this initiative has been an effort to change how government will purchase goods and services in the post–Cold War era. Reinvention of the acquisition system started over six years ago when the federal government revised its primary acquisition directive, the Federal Acquisition Regulation (FAR). Among the many changes made to this document was, for the first time, the development and inclusion of a statement of guiding principles and standards. These guiding principles define the core vision of the federal acquisition system. This chapter also addresses the performance standards that were included with the guiding principles because the standards define the critical factors of an effective and efficient acquisition system.

This chapter will also explain why the government’s acquisition system needed to be reinvented by reviewing some of the most significant characteristics of the government market, and then briefly summarizing the history of government acquisition over the past 60 years or so.