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All,

I would like to request your view/comments on why acquisition professionals seem to ignore (completely or partially) the guidance located at FAR 7.4.

The following link was a report on a few agencies concerning the purchase of heavy equipment as oppose to leasing it:

https://www.gao.gov/products/GAO-18-295

What I would like to see is why you think this simple business/acquisition analysis is being overlooked by many of fellow professionals. Not just heavy equipment, but everything from real property to medical equipment?

 

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Several reasons.  1) aren’t aware of the issue, 2) agency policy and oversight/review don’t care, 3) availability of lease vs purchase money, and 4) lead time to get in budget and fund.

Years ago this was part of the governments IT equipment solicitation.  Proposals ere evaluated on basis of purchase, lease, lease with option to purchase, and lease to ownership.  The solicitations showed the systems life for evaluation, the present value of money for each month, the percent residual value at the end of the contract, and assumptions on where the purchase option might be excised.  Evaluations were a nightmare and ripe for protests on the evaluation being done wrong.  This alone probably discouraged that kind of evaluation for other things.

 

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46 minutes ago, formerfed said:

Several reasons.  1) aren’t aware of the issue, 2) agency policy and oversight/review don’t care, 3) availability of lease vs purchase money, and 4) lead time to get in budget and fund.

 

Thank you formerfed.

what do u think is a good way to address? I would think a agency wide policy to be followed by required training. From the macro level of course?

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1 hour ago, Constricting Officer said:

Thank you formerfed.

what do u think is a good way to address? I would think a agency wide policy to be followed by required training. From the macro level of course?

Right.  First issuance of a good, clear policy.  Then training on how it’s gets implemented.  Finally it needs to become part of a review/oversight check for every acquisition.

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Maybe it is okay to suppose, as a general matter, that the program manager/requirements official has done the analysis, however informally, before he or she prepares a purchase request for a purchase?  After all, FAR subpart 7.4 doesn't require that the analysis be documented in writing.  

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Oh yeah, the policy and training has to be agencywide and include PMs, requirements officials, budget/comptroller, acquisition and contracting personnel, and management.  Everyone needs to become aware so there’s no surprises complying.  It gets awkward, for example, when the analysis shows purchase as the clear method but no purchase money is programmed.   Then the findings need documented in a central location for all to see.

This issue is really governmentwide and generally isn’t addressed mostly from ignorance.  

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3 hours ago, ji20874 said:

Maybe it is okay to suppose, as a general matter, that the program manager/requirements official has done the analysis, however informally, before he or she prepares a purchase request for a purchase?  After all, FAR subpart 7.4 doesn't require that the analysis be documented in writing.  

Exactly. We need to figure this out. I appreciate all of your feedback. All facets must be addressed.

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My two cents

Short Version: a lot of analysis is lost in the overwhelming amount of contracting paperwork, documentation and procedures.  There is so much that you must do, you skip the stuff you should be doing.   

 

Long Version: In my Department (HHS) a written AP is required for anything over the SAP (HHSAR 307.something), and the AP must follow FAR 7.105.  The HHS Acquisition Plan template has about 70 data fields to fill-in, for thousands of contract actions per year.   So a purchase of $400,000 of live mice has an AP that, in theory, considers Section 508.  A $400,000 purchase of commercial software has an AP that, in theory, considers subcontracting competition. 

In practice, this stringent Acquisition Plan documentation requirement effectively negates Acquisition Planning. 

If you are writing, or reading, or approving dozens (or hundreds) of Acquisition Plans per year, you are not giving them much attention or thought.   People tend to thoughtlessly skim past the actual strategic planning & analysis parts of Acquisition Planning - such as lease vs. buy for heavy machinery - along with junk parts of the Acquisition Plan.  

In an organization with this type of process, you can figure out how many simple business/acquisition analysis are overlooked.

 

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