Thursday, March 8, 2018

DoD's Procurement Management Reviews Offer Good Advice for Contractors

The Defense Contract Management Agency (DCMA) conducts independent reviews of the procurement function of other Defense agencies and field activities that perform contracting operations. These reviews are designed to assess the effectiveness of the contracting function, analyze and assist in resolving identified problem areas (yes, we're from the Government and we're here to help), and identify noteworthy practices that may be beneficial to all organizations. These reviews are called "Procurement Management Reviews" or PMRs.

So what do these reviews have to do with contractors? Well, aside from the fact that Government contractors should appreciate well-run, efficient, and effective procurement departments that get the job done and don't dwell on minutia that bogs down procurement and cost contractors time and money, these reviews can help contractors improve their own procurement practices.

A recent summary of PMR reviews performed in fiscal years 2016 and 2017 included a listing of 22 recommendations appearing in more that 50 percent of the reviews. Many of these recommendations, resulting in identified deficiencies in the procurement process, apply equally to contractor purchasing departments. Contractors would do well to use this listing as a tool to assess the effectiveness of their own procurement functions.

Some of the recommendation that seem most applicable to contractor procurement functions include the following:

  1. Verify that contract files clearly demonstrate how source selection evaluations were conducted and decisions were made
  2. Files must document adequate market research was performed to clearly record how research informed the acquisition strategy.
  3. Documentation in contract (and subcontract) files must be sufficient to constitute a complete history of the traction.
  4. Ensure small business subcontracting goals are considered.
  5. For sole source awards, ensure there is adequate determination of fair and reasonable pricing.
  6. For commercial items, ensure there is documentation of the commercial item determination.
  7. Ensure that adequate and measurable performance standards are stated in contracts for services and that sufficient surveillance methods are identified.

As we stated, these recommendations arose in more that 50 percent of the PMR reviews. If the Government finds such deficiencies in its own house, its not difficult to conclude that similar deficiencies exist within contractor purchasing departments.

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