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Bloomberg Government reported on September 20 that average PALT has increased 72 percent in the last five years.

 

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Procurement Acquisition Lead Time Increases 72%, Slows Process

By Paul Murphy / September 20, 2021 05:46AM ET / Bloomberg Government

The time it takes between the release of a final solicitation to the award of a contract—procurement acquisition lead time, or PALT—rose 72% in five years, according to Bloomberg Government analysis. Average PALT expanded from 43 to 74 days among the 24 Chief Financial Officer agencies from fiscal year 2016 to fiscal year 2020. CFO agencies account for 99% of annual federal contract spending.

Agencies are challenged to squeeze solicitations into a narrow procurement window that opens late in the year after Congress passes a budget and can start slowing down months before the fiscal year ends the following September. Budget logjams, lagging agency hiring, procurement efficiency initiatives and other trends are driving agencies to use larger, higher-value contracts that take more time to plan, evaluate, and award.

Acquisition delays create longer financial gaps than any organization prefers to float on their balance sheets. They also impose costs on both agencies and companies that erode the ability of government to meet normal delivery expectations and respond to crises like the Covid-19 pandemic in a timely manner.

* * *

Solicitation data show that from fiscal 2016 through fiscal 2020, PALT for prime contracts worth more than $100 million—for example, large weapons projects and IT systems—averaged 308 days...

* * *

Even agencies with low PALT averages struggle with large awards. For example, data show DOJ took 598 days from initial solicitation to award of its MEGA 5 Automated Litigation Support contract, estimated to be worth as much as &1.5 billion over its expected life. The Army, with a 74-day PALT average, awarded its Worldwide Logistics Services contract, currently estimated at $1.3 billion, in 614 days.

Bid protests also drive PALT growth. The must-win nature of large, longterm contracts can drive companies to protest unfavorable award decisions, or to file pre-decisional protests in an attempt to produce a favorable outcome. The Defense Information Systems Agency took more than 1,000 days to award its $17.5 billion ENCORE III vehicle following protests by both large and small businesses.

Contracts valued between $50 million and $100 million average 220 days and $25–$50 million-range awards take 216 days. PALT for small, less-than-$1 million contracts is 54 days. After eliminating data outliers, these contracts numbered more than 314,000 and accounted for 90% of all awards from fiscal 2016 through fiscal 2020.

...

What that doesn't say is that five years ago it was already taking too long.

Mission failure.

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I’ve always thought PALT a is mostly meaningless the way it’s historically measured - receipt of a “ready” requisition to contract award.  So a program office can struggle for months trying to put together a requisition package with no help from the contracting office, have the package bounced back several times because it’s not “ready”, and ultimately gets an award way too late.

Then OFPP lately changed PALT release of a solicitation to award!  What is meaningful about that to a program office?

Probably a better measure from an overall government perspective is identification of need to delivery of product or start of service. 

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1 hour ago, here_2_help said:

Increasing PALT is a symptom, not the disease

The disease is increased workload, insufficient capable staff, and/or inadequate processes.

Some offices are doing very well. Others are suffering.  The main differences is being able to see what was going to happen and adapting.

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On 9/21/2021 at 10:44 AM, formerfed said:

Then OFPP lately changed PALT release of a solicitation to award!  What is meaningful about that to a program office?

Solicitation to award is a very industry-focused definition of PALT, because it represents the time when offerors have their resources tied up in a proposal. It's probably not particularly meaningful to a program office or contracting office at all. Incentivizes contracting offices to minimize proposal preparation time and to award without discussions.

The time from receipt of a "procurement-ready package" to award is a contracting office focused-definition of PALT. Also probably not very meaningful to a program office who can't get a procurement-ready package in the door. Incentivizes contracting offices to not "accept" less than perfect packages, which may well actually increase overall requirement satisfaction lead time for the program office.

The time from identification of a need through delivery is a program office-focused definition of PALT and probably what really should be incentivized. But it's too broad to really assign responsibility for to a single entity (assuming the program office and contracting office are separate) so it's probably hard to do.

 

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1 hour ago, Witty_Username said:

The time from identification of a need through delivery is a program office-focused definition of PALT and probably what really should be incentivized.

Delivery of what?  To satisfy a need may require quite a bit of R&D, design, prototyping, OT/DT and full scale production if it ever gets that far.  Think of the DIVADS or A-12.  A need was identified for each but never satisfied with an end product although billions of dollars were spent trying to satisfy those needs.

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1 hour ago, Retreadfed said:

A need was identified for each but never satisfied

I agree. And maybe the PALT on some of the DIVADS or A-12 contracts was 72% faster than current PALT, and yet the need was never satisfied. So I wouldn't declare overall success based on how fast a contract was awarded that never actually fulfilled the need.

But, easy for me to say, hard to actually do (except to be aware that we shouldn't overly-incentivize a narrow definition of PALT that doesn't include delivery/success)...

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3 hours ago, Witty_Username said:

So I wouldn't declare overall success based on how fast a contract was awarded that never actually fulfilled the need.

I heard a senior executive commenting on the Coast Guard Deepwater cutter failure.  He said their streamlined award process showed them months earlier that the ship wouldn’t work as designed.  So he credited the contracting process a success

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17 hours ago, formerfed said:

streamlined award process showed them months earlier that the ship wouldn’t work as designed

Interesting. In that case you might more broadly define the need as finding out whether some particular design will work. "Failing fast" could be seen as fulfilling the need to find out what works, make changes, and try again. Of course you can keep opening the aperture and question whether any particular platform satisfies the need for a specific capability, and whether any specific capability satisfies the need for national defense, etc.

I certainly think there is likely to be value in speeding up PALT, however it is defined, as long as it isn't done at the expense of some other part of the overall process. Understanding where contracting (or any particular role) fits in to the overall process is a challenge, particularly in a contracting office that supports many different external "customers", but I think by trying to understand the goals of the level above you (e.g. contracting understands program goals, etc.) you're more likely to be able to optimize your own part of the process in a way that doesn't negatively affect the overall process. Alternately if you don't understand the higher level goals you may well optimize your own part of the process in a way that hurts the overall process.

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22 hours ago, Retreadfed said:

Delivery of what?  To satisfy a need may require quite a bit of R&D, design, prototyping, OT/DT and full scale production if it ever gets that far.  Think of the DIVADS or A-12.  A need was identified for each but never satisfied with an end product although billions of dollars were spent trying to satisfy those needs.

PALT is Procurement Administrative Lead Time. It does not include production lead time. When measuring PALT, lead time ends with contract award. If you measure to delivery of the product you're measuring Procurement Lead Time, which includes administrative and production lead time—Procurement Administrative Lead Time.

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On 9/23/2021 at 10:27 AM, Witty_Username said:

The time from identification of a need through delivery is a program office-focused definition of PALT

Witty made this statement with which you agreed.  My simple question is in this definition what is it that is to be delivered?

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On 9/23/2021 at 10:27 AM, Witty_Username said:

Solicitation to award is a very industry-focused definition of PALT, because it represents the time when offerors have their resources tied up in a proposal. It's probably not particularly meaningful to a program office or contracting office at all. Incentivizes contracting offices to minimize proposal preparation time and to award without discussions.

The time from receipt of a "procurement-ready package" to award is a contracting office focused-definition of PALT. Also probably not very meaningful to a program office who can't get a procurement-ready package in the door. Incentivizes contracting offices to not "accept" less than perfect packages, which may well actually increase overall requirement satisfaction lead time for the program office.

The time from identification of a need through delivery is a program office-focused definition of PALT and probably what really should be incentivized. But it's too broad to really assign responsibility for to a single entity (assuming the program office and contracting office are separate) so it's probably hard to do.

This is what I was going to write, except its already been written.  Amen.

I have an action right now that I am about to award, this is its actual timeline:

  • Identification of need  -> 'acquisition package' to contracting office:  Maybe 2 months
  • Receipt of Acquisition Package -> Solicitation: 3 months
  • Solicitation - Award: 2 weeks

What is the PALT here?  

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Depends.  Traditional measurement - 5 months.  New OFPP measurement - 2 months.  Program measurement - 7 months.

Regardless of the way some people view it, the most significant measure is 7 months.  That’s because procurement is a support function.  We are here to assist our agencies in carrying out their mission.  Assessing how well that occurs is what’s important.

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7 hours ago, Retreadfed said:

Witty made this statement with which you agreed.

@RetreadfedYou're quite right, and upon reflection my expression of agreement was enthusiastic, but not thoughtful.

5 hours ago, General.Zhukov said:

What is the PALT here?  

Good question.

OK, everyone: what do we want to know and manage? I think we want to know and manage how long it takes for the acquisition system to satisfy requirements. That being said, I think acquisition, as defined in FAR 2.101, takes place in the following three acquisition administrative phases and lead times, each with the following outcomes:

  1. From submission of a need by a user to a program office until completion of a procurement package (including a specification or statement of work and other necessary documentation) by the program office. Let's call it procurement package lead time.
  2. From submission of the procurement package by the program office to a contracting office until issuance of a solicitation by the contracting office. Let's call it proposal solicitation lead time.
  3. From issuance of the solicitation by the contracting office to award of a contract by the contracting office and the program office. Let's call it contract formation lead time.

After contract award, the time required to deliver supplies, complete the performance of a task, or commence performance of an on-going service, would be considered production or performance lead time.

What do you think?

 

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On 9/23/2021 at 7:27 AM, Witty_Username said:

Solicitation to award is a very industry-focused definition of PALT, because it represents the time when offerors have their resources tied up in a proposal. It's probably not particularly meaningful to a program office or contracting office at all. Incentivizes contracting offices to minimize proposal preparation time and to award without discussions.

The time from receipt of a "procurement-ready package" to award is a contracting office focused-definition of PALT. Also probably not very meaningful to a program office who can't get a procurement-ready package in the door. Incentivizes contracting offices to not "accept" less than perfect packages, which may well actually increase overall requirement satisfaction lead time for the program office.

The time from identification of a need through delivery is a program office-focused definition of PALT and probably what really should be incentivized. But it's too broad to really assign responsibility for to a single entity (assuming the program office and contracting office are separate) so it's probably hard to do.

 

I agree w/ Vern that this is a very insightful post.  I'm not sure if you're saying they changed the definition of PALT to satisfy industry, or if it's just a coincidence.

I think the reason for the new definition of PALT is more out of convenience than anything.  I think the new definition is what it is is because PALT can now easily be calculated via FPDS-NG.  Solicitation closing date & award date are both known, and it's now required to include the solicitation number in the award CAR.  This is the only way to actually track this kind of data on such a large scale.

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The stated reasons for using the definition is here:

https://www.federalregister.gov/documents/2020/01/21/2020-00783/procurement-administrative-lead-time-palt
 

I’m not sure how much capturing data with this definitions helps.  More complex procurements need longer time time for offeror proposal preparation.  Regardless of how much pre-solicitation communication occurs, questions from industry and noted unclear language and errors results in due date extensions.  More detailed proposals and large numbers of responses add evaluation times.  I know all this stuff gets captured in FPDS but what good does just looking at the data produce? 

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8 hours ago, Krimz said:

Solicitation to award is a very industry-focused definition of PALT, because it represents the time when offerors have their resources tied up in a proposal. It's probably not particularly meaningful to a program office or contracting office at all.

@Krimz, in my industry experience, solicitation to award and supplier lead times are meaningful to a program office. 

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On 9/26/2021 at 7:50 AM, Neil Roberts said:

@Krimz, in my industry experience, solicitation to award and supplier lead times are meaningful to a program office. 

Yeah, not saying they were not (I was quoting that), but when I think about the old definition of PALT, or other meaningful definitions of PALT, it seems like it would be would be very hard to accurately track any other meaningful metric.

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On 9/24/2021 at 5:25 PM, Vern Edwards said:

@RetreadfedYou're quite right, and upon reflection my expression of agreement was enthusiastic, but not thoughtful.

Good question.

OK, everyone: what do we want to know and manage? I think we want to know and manage how long it takes for the acquisition system to satisfy requirements. That being said, I think acquisition, as defined in FAR 2.101, takes place in the following three acquisition administrative phases and lead times, each with the following outcomes:

  1. From submission of a need by a user to a program office until completion of a procurement package (including a specification or statement of work and other necessary documentation) by the program office. Let's call it procurement package lead time.
  2. From submission of the procurement package by the program office to a contracting office until issuance of a solicitation by the contracting office. Let's call it proposal solicitation lead time.
  3. From issuance of the solicitation by the contracting office to award of a contract by the contracting office and the program office. Let's call it contract formation lead time.

After contract award, the time required to deliver supplies, complete the performance of a task, or commence performance of an on-going service, would be considered production or performance lead time.

What do you think?

 

Why distinguish #2 and #3 if they are both primarily the responsibility of the contracting office?

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@Don MansfieldWhile most people think that the contracting office is responsible from receipt of proposals through contract award, I think that the analysis and evaluation of proposals is what takes the most time during that phase, and that is the joint responsibility of both the program office and the contracting office, and so should be distinguished from Step 2, which is primarily the responsibility of the contracting office.

Make sense?

Edited by Vern Edwards
Correct typo.
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1 hour ago, Vern Edwards said:

@Don MansfieldWhile most people think that the contracting office is responsible from receipt of proposals through contract award, I think that the analysis and evaluation of proposals is what takes the most time during that phase, and that is joint the responsibility of both the program office and the contracting office, and so should be distinguished from Step 2, which is primarily the responsibility of the contracting office.

Make sense?

Yes. Good point.

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I’m skeptical of anything good coming out of measuring time from solicitation issuance to contract award (#3).  Let’s say OFPP pushes agencies to emphasize use.  So any smart CO being scrutinized on timeliness will do maybe several things - closely nitpick any requisition package first, and issue the draft package to industry as a RFC or draft RFP to identify potential problems first.  Another is having a proposal due date in much less time of what’s reasonable.  

The important thing is how long does it take for a program office and a contracting office to collaborate and get an award in place from identification of a need to award of a contract?

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