DATE: April 27, 2000

FROM: Barry McVay, CPCM

SUBJECT: "A Naval Strategy for Commercial Contracting"

SOURCE: Assistant Secretary of the Navy for Research, Development and Acquisition Memorandum, April 24, 2000

AGENCIES: Department of the Navy

ACTION: Notice

SYNOPSIS: Assistant Secretary of the Navy for Research, Development and Acquisition (ASN(RDA)) H. Lee Buchanan has announced the development of an "innovative strategy for identifying and acquiring commercial solutions" -- a two-phase acquisition approach consisting of a "Commercial Area Announcement" (CAA) and a "Request for Commercial Offering" (RCO).

FOR FURTHER INFORMATION CONTACT: Rear Admiral Bill Jenkins, Deputy for Acquisition and Business Management, 703-602-2338, or e-mail to jenkins.gwilyn@hq.navy.mil.

SUPPLEMENTAL INFORMATION: To acquire better products and services faster and at lower cost, the Office of the ASN(RDA) has developed a strategy that uses a blend of the Broad Agency Announcement concept (see Federal Acquisition Regulation (FAR) 35.016), industry commercial best practices, and contracting methods in FAR Part 12, Acquisition of Commercial Items. "This strategy will allow us to contract for the 'commercial idea/strategy' vice the traditional end user's 'pre-defined product or service'...This approach shifts the fulcrum of competition from that of the end item to that of an idea."

The two phases are:

An advance Navy Acquisition Procedures Supplement (NAPS) notice will be issued with detailed guidance to contracting officers.

In addition, Deputy for Acquisition and Business Management Rear Admiral Bill Jenkins will be contacting each head of a contracting activity (HCA) to "discuss initiatives in implementing this strategy."

EDITOR'S NOTE: Assistant Secretary Buchanan calls this a "revolutionary strategy [which] is a hybrid of existing public and commercial practices." But contracting officers are already authorized to issue "Requests for Information" and publish "Sources Sought" announcements, FAR Subpart 5.5 provides the authority to pay for advertising, and FAR Subpart 12.6 provides a streamlined CBD synopsis/solicitation of no more than 3 1/2 pages for commercial items up to $5 million. The tools have been in the FAR for quite some time. If it takes an assistant secretary to pull them all together and call them "innovative" and "revolutionary," so be it!

Of course, if this is approach is going to be just another way to circumvent the competition requirements in the Competition in Contracting Act, that is another matter. Saying it will be "conducted in an environment of full and open competition" doesn't make it so! Remember that task and delivery orders under multiple award contracts were widely used to select "preferred awardees" until the practice was banned, even though the purpose of multiple award contracts is to increase competition! So it will be up to the Navy to demonstrate whether this strategy will be one step forward or two steps back.

For more on additional corrective actions directed at task and delivery order contracts, see the April 25, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-17, Miscellaneous Amendments."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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