Defense Contracting Environment by 0WZ73X

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									Defense Contracting
   Environment
                      Government
                       Acquisition



To acquire quality products that
 improve mission capability and
  operational support in a timely
 manner, at an affordable price.
                                   Key Focus
                                       Areas

• Delivering capability improvements faster
  through
  – evolutionary acquisition
  – time-phased requirements
  – integrated test & evaluation
                                 Acquisition
                                   Process
•   Requirements Determination
•   Acquisition Planning
•   Market Research
•   Requirements Documents
•   Solicitation
•   Evaluation
•   Choice
                     Post-Award
•   Execution
•   Administration
•   Modification
•   Close-out
                                                                             DoD Acquisition
                                                                             Process

                A                     B                                               C        IOC       FOC
Materiel            Technology            Integrated
                                                                System                Production &   Operations &
Solution            Development           System
                                                                Capability &          Deployment     Support
Analysis                                  Design
                                                                Manufacturing
                                                                Process
                                                                Demonstration


                                PDR   PDR

  Pre-Systems Acquisition Activity                     Systems Acquisition Activity                   Sustainment




                                                                                              FPR Decision
                                             Post-PDR                                         Review
                                             Assessment
    Materiel Development
    Decision
                                                                       Post-CDR
                                                                       Assessment
                             Elements of
                              a Contract
• Offer and acceptance
    – Terms and conditions
•   Consideration
•   Competent Parties
•   Lawful Purpose
•   Certainty of Terms
•   Form Required by Law
                           Rules
• Legislative Branch
  – Makes the rules
• Executive Branch
  – Enforces the rules
• Judicial Branch
  – Interprets the rules
                       Rules
•   Laws
•   Regulations
•   Policies
•   Instructions
•   Un-written rules
                                               Rules


Laws
                                Courts and Appeals
       Regulations



                     Policies


                                Instructions
                                Agents and
                                  Authority
•   An agent is the representative of another
•   Contracting Officer
•   Program Manager
•   Contracting Officer Representative
    – COTR
• Actual Authority
• Apparent Authority
                        Government as a
                              Customer
•   Monopsony
•   Public Money
•   Cyclic Funding
•   Create Technology
•   Sovereignty
•   Personnel
•   No Profit Motive
                        Government as a
                              Customer


•   Social Programs
•   Many Players
•   Short Term relationships
•   Audits
                     Defense Industry
•   Ologopoly
•   Cyclic
•   Lack of Planning
•   No industrial Planning
•   High Concentration
•   Dependence on Foreign Sales
•   Entry & Exit Barriers
                          Entry Barriers
•   Unique Environment
•   High Capital Investment
•   Engineering/Scientific Requirements
•   Large Cash Reserves
•   Specialized Reporting
•   Detailed Federal Regulations
•   Security Clearances
•   Political Considerations
                              Exit Barriers
•   Government R&D
•   Large Overhead
•   Specialized Equipment
•   Low-Bid Awards
•   Specialized Labor
•   Specialized Marketing
•   Military Specifications
                         Economic Market
                                  Theory
•   Homogeneous Product
•   Many Buyers and Sellers
•   Freedom of Entry/Exit
•   Perfect Information
•   Individuals Have Insignificant Influence
•   No Collusion
•   Maximization of Utility/Profit
                                       Systems
                                        Theory
• Buyer-Seller Coupling
  – Loose (Market Bargaining)
  – Tight (Cooperative Relationship)
  – Full (Vertical Integration)
• Components
  – Suppliers in Supply Pool
  – Credible Commitment
  – Dispute Resolution
  – Communication Flow
                         Transaction Cost
                              Economics

• Objective
  – Economize on
    • Transaction Cost
    • Production Cost
                       Socioeconomics
• Small Business Preferences
  – Goals
  – Set-asides
• Small Business Administration
  – Certificates of Competency
  – 8a programs
• Equal Access to Justice
  – Prevailing party
                                   Other
                                Programs

•   Labor Surplus
•   Nondiscrimination Requirements
•   Walsh-Healey Act (wages)
•   Buy American Act
•   Environmental Protection
•   Drug-free workplace
                                 Summary
•   The public sector is different
•   Congress gives us lots of “help”
•   Profit motive absent
•   Conflicting goals
    – Acquisition
    – Societal

								
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