Guiding Principles,

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Contract Management | September 2008

Guiding Principles,
FAR Part One

Acquisition professionals must be prepared to lead and FAR Part One provides the foundation from which sound business judgment and professional acumen will develop and grow. Failing to build on this foundation affects the integrity and flexibility demanded of the Federal Acquisition System.
BY JAm eS N. Phil l iP S JR. , SuSAN m . Phi l l iP S, ANd ScOttie PARAmO u Re

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GuidinG PrinciPles, far Part one

More than ever, there is a need in our profession to be grounded in the basics. Presently, our profession is experiencing a knowledge and talent recession from the retirement of our experienced and talented professionals who are leaving us with an expanding workload with greater dollar values. In response to this ongoing problem, our industry is hiring new professionals. Regrettably, while these young professionals are eager and educated, they are sometimes lacking the necessary perspective or the principles that guide our profession. To ensure the success of the Federal Acquisition System (FAS), we need a professional and educated workforce trained and developed around Federal Acquisition Regulation (FAR) Part 1, "Federal Acquisition Regulations System," which provides the guiding principles of the FAS.
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Guiding Principles
The challenges facing the FAS are well documented. From reports by the Government Accountability Office citing the “significant mismatch between the demands placed on the acquisition workforce and the personnel and skills available within the workforce to meet those demands,”1 to acknowledgement that “demands on the workforce have grown substantially while at the same time, the complexity of the Federal Acquisition System as a whole has increased,”2 the U.S. government, the world’s largest buyer of goods and services, is struggling to keep up, and stakeholders of all types are taking notice. Among the numerous challenges facing the FAS, the loss of institutional knowledge3 when experienced and talented professionals retire—commonly referred to as “brain drain”4—remains a primary concern. To mitigate the effects of brain drain on the FAS, new professionals are hired and trained. In some cases, however, these new professionals are brought in and immediately directed to assume a workload commensurate to that of someone with greater skill and experience. In order to successfully implement the vision of the FAS, new professionals must first have a clear understanding of what the FAS is meant to accomplish. They must understand its purpose and the principles upon which the system is built. They will be subjected to a variety of situations where they will be expected to make sound business decisions in the face of many competing interests. These acquisition professionals must be prepared to lead, and in order to do so they must be fully grounded in the foundations provided by FAR Part One.

The vision for the Federal Acquisition System is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives. Participants in the acquisition process should work together as a team and should be empowered to make decisions within their area of responsibility.

It is in the two sentences of the vision statement that the fullness of the FAS is expressed. The primary objective of the FAS is to deliver the “best value product or service” in a timely manner through empowered teams “while maintaining the public’s trust and fulfilling public policy objectives.” Sounds easy, right? However, the challenge facing acquisition leadership is that newer professionals are not sufficiently prepared to carry out this vision while the collective braintrust of senior acquisition professionals is lost due to retirement. As previously mentioned, all too often new professionals are hired and directed to assume a workload equal to that of seasoned senior professionals. This practice presents a significant dilemma. Often, brand-new acquisition professionals do not have inherent knowledge of the FAS’ vision nor the experience to make sound business decisions. Accordingly, they refer only to the various parts in the FAR that satisfy a functional need and do not exercise clear contextual understanding nor the level of judgment envisioned in the vision statement.

“The vision for the Federal Acquisition System is…”5
This introductory phrase to the vision of the FAS gives focus and provides a directive approach to the contextual understanding of the FAS. The key phrase here is “vision for.” The authors of FAR Part One saw the need to provide a statement of intent. This intent, or “vision,” is the spirit of the authors’ desires and expectations regarding the fulfillment of the FAS. It can be inferred that, to clearly view the remainder of the FAR and apply the

Statement of Guiding Principles for the FAS
FAR 1.102, “Statement of Guiding Principles for the Federal Acquisition System,” grounds the acquisition professional in the orthodoxy of the federal acquisition practitioner. As a beacon to illuminate the way, 1.102(a) offers a simple and clear vision statement:

GuidinG PrinciPles, far Part one

Vision Statement Lens

Contract Professional

V I S I O N

All other parts of the FAR

Figure 1.

FAS according to the intent of the authors, the acquisition professional must view their duties and responsibilities through the lens of the vision statement (as illustrated in Figure 1 above). In considering the pictorial representation of the relationship between the acquisition professional and the FAR, the authors’ intent is clear: contextual understanding and judgment are only to be understood through the lens of the vision statement. Other parts of the FAR should not be viewed independently. Rather, all other parts of the FAR should be applied only within the context provided by the statement of guiding principles in FAR Part One.

2 | Quality, and 3 | Timeliness of delivered product(s) or

service(s).7 According to FAR 1.102-2(a)(2), the FAS (and by extension the acquisition professional) “must be responsive and adaptive to customer needs, concerns, and feedback.” It then follows that the acquisition professional, in partnership with the customer, should come to an understanding of the three aforementioned elements in making a best-value decision. Consider the following customer focus story. A phlebotomy chair (specialized for taking blood) was requested and the customer requested a particular type of chair. The chair was not available on the required General Services Administration Federal Supply Schedule contract; however, another phlebotomy chair was. An order was placed for the alternate chair. Regrettably, because the contract professional did not consider the specific and unique need of the customer, the chair was unsuitable and did not meet the needed space specifications. If the customer’s need was fully understood, the contract professional would have recognized that the construction of the space only allowed for chairs with specific characteristics.8

This story illustrates the importance of full and clear understanding of a requirement. Failing to consider the specific details resulted in the purchase of an incorrect chair, created problems for the customer, and diminished the operation of the phlebotomy lab until the proper chair was ordered and received. Customer focus was subordinated to a process that dictated the use of a particular contract vehicle. The result was a product that did not reflect best value for the customer. So what is best value? FAR 2.101(b) defines best value as “the expected outcome of an acquisition that, in the government’s estimation, provides the greatest overall benefit in response to the requirement.” In the Government Contract Reference Book, best value is further defined as “a process where the government evaluates both price and non-price factors.”9 Further, “This technique is now called the trade-off process.” Whether “trade-off” or “best value,” 2.101(b) goes on to say that it “must be viewed from a broad perspective and is achieved by balancing the many competing interests in the system. The result is a system which works better.” Ultimately, it comes down to discerning the customers’ needs and delivering results that reflect the best value to the government.

“…to deliver on a timely basis the best value product or service to the customer…”6
This phrase refers to the deliverable(s) that acquisition professionals are to provide. It emphasizes the customer-centered focus of the FAS. In defining the meaning of being customer focused, the general understanding of the concept is captured in three elements:
1 | Cost,

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GuidinG PrinciPles, far Part one

“…while maintaining the public’s trust…”10
Citizens of the United States value characteristics such as trust, fairness, integrity, honesty, and openness. Our system of commerce places a great deal of emphasis on these characteristics. Consider the collapse of ENRON and the devastation it wrought on the shareholder confidence in the market. Consider also the mistrust of the government acquisition process when officials misuse or abuse their authority as in the recent cases with David Safavian, former administrator of the Office of Federal Procurement Policy, and Darleen Druyun, deputy assistant secretary of the Air Force for acquisition and management. In these examples and, unfortunately, many more, we struggle with instilling confidence in the acquisition process. Maintaining the public trust is accomplished through openness and acquisition system integrity. Examples of this include: ƒ Early communication with industry of a government need, Promotion of competition, Acquisition team involvement, and Maximizing the use of commercial products and services.

ƒ ƒ ƒ

Through the use of these examples, the system is made more open and visible to all competitors and the public. The FAS is a system that defaults to competition and to commercial products or services. Public confidence increases when processes and practices are open and understood. Conversely, when there is an appearance of impropriety and evasiveness by public officials, system confidence is eroded. The public’s trust is seen as the duty of all federal employees and officials to ensure that taxpayer dollars are spent wisely. This duty extends to openness and fairness when dealing with the selling public and conveys honesty and integrity of the acquisition professionals charged with

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GuidinG PrinciPles, far Part one

the responsibility. For many, this duty is considered sacred.

Public Policy Related to Trade
ƒ Buy American Act—Supplies, Buy American Act—Free Trade Agreements, Restrictions on certain foreign purchases, and Trade Agreements Act. ƒ

“…fulfilling public policy objectives…”11
This phrase is a partner to the aforementioned phrase “…while maintaining the public’s trust…”12 The former phrase focuses on the characteristics previously mentioned, and the latter focuses on criteria to be considered when making an acquisition decision. In the area of public policy objectives, the acquisition professional serves as an instrument of public policy and is charged with the implementation of policy. As seen in the following list, fulfilling public policy objectives is considered in all acquisition decisions.

the government, the same may be true for commercial buyers as they look to become more socially responsible. For commercial buyers, social responsibility concerns are often good business.

ƒ

“…work together as a team…”13
The vision statement intends that the FAS be team oriented. However, that is not to say that a team is required to be convened for every procurement action. More correctly, it indicates that forming a team should be considered when appropriate. A team may be most needed when full understanding of a requirement is necessary for decision-making (such as when defining requirements, conducting market research, or seeking input from industry). To ascertain a customer’s needs often requires the input of a variety of specialties or disciplines. These advisors become the acquisition team. FAR 1.102(c) states: “The acquisition team consists of all participants in government acquisitions including not only representatives of the technical, supply, and procurement communities, but also the customers they serve.” There is an interesting finale to the vision statement that directs all involved in the FAS to recognize that the government desires to seek input from industry regarding a pending need. This inclusion recognizes the inherent expertise offered by industry and expects the government and industry to act as partners, not adversaries. This notion is best summarized in FAR 1.102-1(b): “All participants in the [FAS] are responsible for making acquisition decisions that deliver the best value product or service to the customer.” Therefore, the FAS is not solely a government system, but a clearly articulated system by which both government and industry may better understand their individual roles in mutually satisfying a government customer’s needs. This is perhaps best stated in 1.102-4(d): “The system will foster cooperative relationships between the government and its contractors [i.e., industry] consistent with its overriding responsibility to the taxpayers.”

ƒ

Public Policy Related to National Emergencies
ƒ Notice of disaster or emergency area set-asides, and Restrictions on subcontracting outside disaster or emergency areas.

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Public Policy Related to Small Business
ƒ Set-asides to small businesses, including: ƒ ƒ ƒ Women-owned small businesses, Veteran-owned small businesses,

Public Policy Related to the Environment
ƒ Refrigeration equipment and air conditioners, and Waste reduction programs.

ƒ Service-disabled veteran-owned small businesses, Disadvantaged small businesses, 8(a) small businesses, and HUBZone small businesses.

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This list is by no means all inclusive or comprehensive as there are many, many more public policy objectives. It should be clear that fulfilling public policy objectives is important. As an aside, while public policy objectives are important considerations in acquisition decisions made by

Public Policy Related to Labor
ƒ ƒ ƒ ƒ ƒ ƒ Davis Bacon Act, Service Contract Act, Fair Labor Standards Act, Convict labor, Combating trafficking in persons, and Child labor.

In order to successfully implement the vision of the FAS, new professionals must first have a clear understanding of what the FAS is meant to accomplish.

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Contract Management | September 2008

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GuidinG PrinciPles, far Part one

Professional Development Continuum
LOW Contract Professional Need for Formal and Continued Education HIGH Risk Management

Compliance Decisions Regulatory Compliance
Figure 2.

Creative Decisions Professional Judgment

“…should be empowered to make decisions within their area of responsibility.”14
In achieving best value or making tradeoffs to achieve a best value solution, the contract professional is expected to use sound business and professional judgment. In perhaps the most overlooked statement in the FAR, 1.102(d) states:
In exercising initiative, government members of the acquisition team may assume if a specific strategy, practice, policy, or procedure is in the best interest of the government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order, or other regulation, and that the strategy, practice, policy, or procedure is a permissible exercise of authority.

“…empowered to make decisions…”15
To “be empowered to make decisions” requires an engaged acquisition professional. In fact, the FAR states: “The foundation of integrity within the FAS is a competent, experienced, and well-trained, professional workforce.”16 Additionally, the FAR expands on who should receive training by stating:
The government is committed to provide training, professional development, and other resources necessary for maintaining and improving knowledge, skills, and abilities for all government participants on the team, both with regard to their particular area of responsibility within the system and their respective role as a team member.17

Throughout the FAR, descriptive terms characterize qualities acquisition professionals are expected to possess. Terms such as “personal initiative,” “sound business judgment,” “discretion,” “innovate,” and “empowered” reflect the caliber of professionalism necessary to make the FAS work; the level of professionalism of experienced professionals grounded in the foundation of FAR Part One. The “professional development continuum” (see Figure 2 above) illustrates the extreme ends for the acquisition profession as it relates to acquisition professionals and developmental levels. Powerful words and phrases such as “personal initiative,” “sound business judgment,” “innovate,” “empowered,” and “discretion” reflect acquisition professionals on the high end of the continuum. Such professionals maintain greater knowledge, skills, and abilities required to manage risk. They also tend to utilize greater intellectual skills to solve acquisition challenges. These professionals always make decisions through the context provided by the guiding principles for the FAS. Conversely, on the low end of the continuum, where compliance and strict adherence to rules exist, the attitude of the professional is one of risk avoidance. In this case, the acquisition professional embraces a

What makes this statement unique is that it allows and encourages creativity and innovation in government procurement. It literally gives permission to government officials and employees to seek creative solutions to complex problems when other directions are silent. This statement is quite powerful. In an ever-changing world, the FAS must be able to respond in a timely fashion to meet customers’ needs.

This sentence clearly points out the importance of an engaged and professionallydeveloped acquisition team by emphasizing that training and professional development are not limited merely to the acquisition professional. The role of the team is to equip itself to make decisions based on sound professional judgment and appropriate skills relevant to the task at hand. Such decisions are not made by the acquisition professional alone, but by the collective understanding of a requirement by the team.

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GuidinG PrinciPles, far Part one

dogmatic and highly bureaucratic approach, and interprets each FAR part independently without considering the context provided by FAR Part One. Being successful here means applying the rules to the letter, and when a question arises, default answers often lead to saying “no.” Fully engaged acquisition professionals operate on the high end of the professional development continuum. They recognize advanced acquisition concepts such as risk management, teaming, best value, and sound business judgment—which all require more than a basic understanding of purchasing. Through education, the professional workforce develops intrinsic skills such as discretion, discernment, reflection, deductive reasoning, systems thinking, process orientation, and analytical skills—all of which will serve the young professional well when conducting market research, writing a justification and approval or determination and finding, developing best value or evaluation criteria, etc. This high level of professionalism imposes a duty upon managers and supervisors to mentor professionals as well.

the principles and the vision of FAR Part One, fully engaged and experienced professionals remain focused on the mission to ensure: ƒ ƒ Timely delivery, Best value products or services to the customer, Public trust is maintained, Public policy objectives are fulfilled, Teamwork, and That they are empowered to make informed decisions.

SUSAN M. PHILLIPS, M.ED, is the transportation assistant for the Department of Transportation, Federal Motor Carrier Safety Administration, Michigan Division, and has contributed to Contract Management in the past. SCOTTIE PARAMOURE, BA, is a contracting officer for the Veterans Health Administration's, VISN 11 Contract Service Center in Indianapolis, Indiana. He is a graduate of VA’s Technical Career Fields Program in contracting and now serves as a trainer for VISN 11 contract specialist interns.

ƒ ƒ ƒ ƒ

Send comments about this article to cm@ncmahq.org.

Summary
In life, nothing is certain or stated differently—change happens. Nowhere is this truer than with the professionals working with the FAS in both government and industry. Countless articles have been written about how the acquisition workforce has too much work with too few qualified contracting professionals to handle the increasing workload. Change—whether related to policy, regulation, resources, or within the workforce itself—is something acquisition professionals learn to live with. However, although there’s no way of knowing what changes the future will bring for the acquisition profession, there is one constant that will never waiver, and that constant is in FAR Part One, "Statement of Guiding Principles of the Federal Acquisition System." As long as the FAS exists, acquisition professionals operating at the high end of the professional development continuum will be needed. Unlike brand-new acquisition professionals who do not yet understand

These high-level, engaged professionals make creative decisions and manage risk, rather than avoid it. They continue education and training and make professional judgments within the context of FAR Part One. They are leaders who act as business advisors, balance competing interests, and find a way to say “yes” while fulfilling the objectives of FAR Part One. These are not, nor can they be, brand-new acquisition professionals—who, as educated as they are, do not yet have the foundation necessary to make the sound business decisions necessary to make the vision of FAR Part One a reality. In the end, if the FAS is to perform as envisioned, an educated professional acquisition workforce is required. Accordingly, the mission of the senior executives, managers, and supervisors is to transform the professional acquisition workforce through mentoring and leadership, and will thus ensure that these professionals can meet the challenges of the future. CM

endnotes
1. U.S. Government Accountability Office, “FEDERAL ACQUISITION: Oversight Plan Needed To Help Implement Acquisition Advisory Panel’s Recommendations,” February 2, 2008. Available at www.businessweek.com/magazine/ content/07_40/b4052070.htm. Ibid. See, generally, Elizabeth Newell, “Federal Officials Strategize on Boosting Acquisition Workforce,” Government Executive, February 14, 2008. Available at www.govexec.com/ dailyfed/0208/021408e1.htm. See, generally, Eamon Javers, “Washington’s Brain Drain,” Business Week, October 1, 2007. Available at www.businessweek.com/magazine/content/07_40/b4052070.htm. FAR 1.102(a). Ibid. FAR 1.102-2(a). Personal experience, James N. Phillips Jr. Nash, Ralph C., Steven L. Schooner, and Karen R. O’Brien, The Government Contracts Reference Book, A Comprehensive Guide to the Language of Procurement, Second Edition, 1998, George Washington University, 58. FAR 1.102(a). Ibid. Ibid. Ibid. Ibid. Ibid. FAR 1.102(c)(1). FAR 1.102-4(c).

2. 3.

4.

5. 6. 7. 8. 9.

10. 11. 12.

About the Authors
JAMES N. PHILLIPS JR., CFCM, MPA, is the past president of the Detroit Chapter of NCMA and presently works for the Department of Veterans Affairs (VA) National Center for Patient Safety in Ann Arbor, Michigan. He is also a frequent contributor to Contract Management magazine.

13. 14. 15. 16. 17.

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