Proper Use of Non-DoD Contracts

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2. 2 Proper Use of Non-DoD Contracts Overview The Case for Change What Does This Policy Really Mean? DoD-unique Terms and Conditions Air Force Procedures on Proper Use of Non-DoD Contracts Direct and Assisted Acquisition of Supplies Direct and Assisted Acquisition of Services Economy Act Considerations Training Resources

3. 3 Proper Use of Non-DoD Contracts The Case for Change GSA internal audits found numerous problems with GSA�s assisted acquisitions (where GSA obligated DoD $) Lack of Competition Out of Scope Task Orders Inadequate Contract Documentation Other Non-DoD agencies had similar problems Interrogation Services at Abu Ghraib prison � out of scope task order issued by Dept of Interior�s GovWorks against an info technology contract GSA Audit finding: IT appropriations used for non-IT work (statutory violation), poor contract documentation, poorly defined requirements, uncompetitive acquisitions (contacts tailored to assisted-agency wants) Wash Post test: Army MIPRd $ to DOI for interrogation services at Abu Ghraib and DOI issued an out of scope task order against a contract for IT services. Army just tried to get the job done but indirectly and unintentionally gave DoD a black eye.GSA Audit finding: IT appropriations used for non-IT work (statutory violation), poor contract documentation, poorly defined requirements, uncompetitive acquisitions (contacts tailored to assisted-agency wants) Wash Post test: Army MIPRd $ to DOI for interrogation services at Abu Ghraib and DOI issued an out of scope task order against a contract for IT services. Army just tried to get the job done but indirectly and unintentionally gave DoD a black eye.

4. 4 Proper Use of Non-DoD Contracts The Case for Change (con�t) Problems raised Congressional concerns which were addressed in the FY 05 National Defense Authorization Act Sec 802 � GSA and DoD IG�s to conduct joint review of policies, procedures and internal controls at GSA�s Federal Technology Service Client Support Centers Sec 854 � Requires DoD Agencies to establish procedures for the review and approval of non-DoD contracts greater than the SAT OSD AT&L Memo issued on 29 October 04 Requires Military Departments to establish procedures for reviewing and approving use of non-DoD contract vehicles after 1 January 05 for amounts greater than the SAT Program managers and requirements personnel have primary responsibility to ensure compliance with this policy with support from contracts and financial management personnel Congressional concern: Congress reduced GSA�s fee to max of 1% (in draft language) and threatened to cut DoD off from GSA until DoDIG gave GSA�s internal processes and controls a thumbs up. DoDIG Audit: Will be conducted at several AF installations. Undoubtedly will tell us what we already know�changes and improvements need to be made within DoD and GSACongressional concern: Congress reduced GSA�s fee to max of 1% (in draft language) and threatened to cut DoD off from GSA until DoDIG gave GSA�s internal processes and controls a thumbs up. DoDIG Audit: Will be conducted at several AF installations. Undoubtedly will tell us what we already know�changes and improvements need to be made within DoD and GSA

5. 5 Proper Use of Non-DoD Contracts The Case for Change (con�t) OSD AT&L memo requires procedures for the following: Evaluation of whether use of a non-DoD contract is in best interest of DoD Determination that tasks/supplies to be acquired are within scope of the contract to be used Funding review to ensure funds are available, used properly for the acquisition and within appropriation limitations Incorporation of DoD terms and conditions (particularly statutory requirements, e.g. clothing procured with DoD funds is of domestic origin) Collection of data to analyze use of non-DoD contracts Certification that the established procedures were followed

6. 6 Proper Use of Non-DoD Contracts What Does This Policy Really Mean? Requirements, contracting and financial personnel must work closely together! Engage early in an acquisition when requirements are being defined Thorough market research is critical to determine if DoD contracts exist or if new contracts should be awarded to meet our needs Use non-DoD contracts when it makes good business sense (in our best interest) but document your rationale Communication with the assisting non-DoD contracting officer will be essential, especially on the scope determination and with DoD-unique terms Non-DoD contracts are not a substitute for poor advanced planning Non-DoD contracts are not a place to �park� funds DoD IG will conduct follow-up audits to ensure compliance with policy Must use non-DoD contracts if they are required sources DoD contracts are preferred (unwritten rule) Must use non-DoD contracts if they are required sources DoD contracts are preferred (unwritten rule)

7. 7 Proper Use of Non-DoD Contracts DoD-unique Terms and Conditions DoD-unique terms and conditions are dependent on the particular acquisition No comprehensive list of these terms and conditions currently exists You need to fully understand the requirement Intended to cover those unique terms that are required by statute, directive, etc when obligating DoD dollars � regardless of who obligates the funds Pay particular attention to statutory requirements A good example of a non-statutory requirement that should be included is Unique Identification (UID) for DoD equipment (Just because a non-DoD agency makes the contract award doesn�t negate the requirement to properly mark DoD equipment for identification and tracking purposes) This requirement is not intended to cover �run of the mill� DoD clauses Discuss with the non-DoD assisting agency contracting officer Must use non-DoD contracts if they are required sources DoD contracts are preferred (unwritten rule) Must use non-DoD contracts if they are required sources DoD contracts are preferred (unwritten rule)

8. 8 Proper Use of Non-DoD Contracts AF Procedures for the Proper Use of Non-DoD Contracts Memo signed by SAF/AQ and SAF/FM on 6 December 04 Procedures are effective as of 1 January 05 Addresses direct (AF CO issues order) and assisted acquisitions (AF MIPRs funds to non-DoD agency for contracting action and obligation) Maximizes use of existing AF procedures, e.g. requirement for Services Designated Official (SDO) to approve any purchase request for services to be awarded by another agency Provides framework for key aspects but allows flexibility for MAJCOMS and contracting offices to establish detailed procedures that work best for them Requires a team approach! Drafted to comply with DPAP�s draft policy memo (coordinated with the field). Will be implemented when DPAP�s memo is issued (effective o/a 1 JAN 05). Drafted to comply with DPAP�s draft policy memo (coordinated with the field). Will be implemented when DPAP�s memo is issued (effective o/a 1 JAN 05).

9. 9 Proper Use of Non-DoD Contracts AF Procedures for Proper Use of Non-DoD Contracts Direct Acquisition of Supplies (>SAT) Includes orders against non-DoD contracts (yes � that means GSA FSS orders) and BPA�s issued against GSA Federal Supply Schedules Requiring organization (Program or Project Mgr, or requirement initiator) or Contracting Officer must document the contract file to reflect: Order is in the best interest of the AF Supplies are within scope (covered by the contract) Funding appropriation is proper (validated by FM) DoD terms and conditions are incorporated (as required) Must also certify that these procedures were followed Remember � the overall responsibility to ensure these procedures are followed rests with the program manager/requirements initiator, but the C.O. is ideally suited to make the scope determination and to ensure necessary DoD terms and conditions are incorporated, especially since the C.O. will issue the order

10. 10 Proper Use of Non-DoD Contracts AF Procedures for Proper Use of Non-DoD Contracts Assisted Acquisition of Supplies (>SAT) Requirement initiator coordinates with CONS and FM early in the requirements development phase CONS and FM advise the requirement initiator on contractual options, contract scope issues, funding constraints and DoD terms and conditions Requiring organization must document the following: Use of a non-DoD contract is in the best interest of the AF Supplies are within scope (covered by the contract) Funding appropriation is proper (validated by FM) DoD terms and conditions are incorporated (as required) Must also certify that these procedures were followed Again � the overall responsibility to ensure these procedures are followed rests with the program manager/requirements initiator FM will conduct a review of the appropriation FM will not transmit the MIPR outside the AF unless it�s approved by CONS!FM will conduct a review of the appropriation FM will not transmit the MIPR outside the AF unless it�s approved by CONS!

11. 11 Proper Use of Non-DoD Contracts AF Procedures for Proper Use of Non-DoD Contracts Direct Acquisition of Services (>SAT) C.O. must ensure compliance with existing AFFARS 5337.170-3, Approval Requirements Requiring organization (Program or Project Mgr, or requirement initiator) or Contracting Officer must document the contract file to reflect: Order is in the best interest of the AF Services are within scope (covered by the contract) Funding appropriation is proper (validated by FM) DoD terms and conditions are incorporated (as required) Must also certify that these procedures were followed Again � the overall responsibility to ensure these procedures are followed rests with the program manager/requirements initiator, but the C.O. is ideally suited to make the scope determination and to ensure necessary DoD terms and conditions are incorporated, especially since the C.O. will issue the order

12. 12 Proper Use of Non-DoD Contracts AF Procedures for Proper Use of Non-DoD Contracts Assisted Acquisition of Services (>SAT) Requirement initiator coordinates with CONS and FM early in the requirements development phase CONS and FM advise the requirement initiator on contractual options, contract scope issues, funding constraints and DoD terms and conditions AFFARS 5337.170-3(b) requires the SDO to approve any services acquisition purchased using a contract or task order being awarded by a non-DoD Agency Requiring organization must document the following: Use of a non-DoD contract is in the best interest of the AF Services are within scope (covered by the contract) Funding appropriation is proper (validated by FM) DoD terms and conditions are incorporated (as required) Must also certify that these procedures were followed Use of a non-DoD contract must be approved by the SDO Again � the overall responsibility to ensure these procedures are followed rests with the program manager/requirements initiator FM will conduct an appropriation review. FM will not transmit the MIPR outside the AF unless approved by the SDOFM will conduct an appropriation review. FM will not transmit the MIPR outside the AF unless approved by the SDO

13. 13 Proper Use of Non-DoD Contracts AF Procedures for Proper Use of Non-DoD Contracts Economy Act Considerations Economy Act (31 U.S.C. 1535) permits ordering of supplies and services from another Federal Agency when there is no other specific authority to do so For interagency acquisitions subject to the Economy Act, comply with the D&F requirements at FAR 17.503. See AFFARS IG5317.5 for a sample D&F template Assisted Acquisitions by GSA are generally covered by other statutory authorizations, e.g. Federal Property and Administrative Services Act, Clinger-Cohen Act, etc and are not subject to the Economy Act � no Economy Act D&F is needed Economy Act D&F will suffice for documentation purposes for Economy Act acquisitions � no additional documentation is needed to comply with these procedures on the Proper Use of Non-DoD Contracts Sample D&F at IG5317.503 will be modified so it meets the requirements of the new AF proceduresSample D&F at IG5317.503 will be modified so it meets the requirements of the new AF procedures

14. 14 Proper Use of Non-DoD Contracts Training Resources DPAP website on Proper Use of Non-DoD Contracts http://www.acq.osd.mil/dpap/specificpolicy/index.htm Market Research See AFFARS Library Part 5310 New SAF/AQC Homepage Special Interest Area http://www.safaq.hq.af.mil/contracting/restricted/special/index.cfm GSA Training Site (need to register) http://fsstraining.gsa.gov (has courses on using GSA schedules and Government-wide Area Contracts)