Plans for Reducing Acquisition Lead Time

Last October, the Secretary of Defense issued a memo identifying three lines of effort he felt necessary to maintain DoD's position as a preeminent fighting force. The third of those lines of effort focused on bringing business reforms, including streamlining of the requirements, identification, and acquisition processes to the Department.

One such practice that significantly contributes to the time-frame between price agreement and contract award relates to the contractor's submission of additional cost or pricing data (often referred to as "sweep data") concurrently with or after the submission of the Certificate of Current Cost or Pricing Data subsequent to price agreement.

Delays associated with contractor efforts to collect and submit cost or pricing data which should have been, but were not, provided to the Contracting Officer in a timely manner prior to agreement on price unnecessarily increases acquisition lead time both by delaying submission of the Certificate of Current Cost or Pricing Data, and by requiring the Contracting Officer to review the "sweep" data, assess the impact on the negotiated price, and come to an agreement with the contractor on the impact that the additional data had on the negotiated price.

There is not statutory or regulatory requirement for contractors to perform a cost and pricing data "sweep" after the date of agreement on price. The requirement is to submit the data prior to the conclusion of price negotiations. Contractors' desire to perform "sweeps" is to forestall subsequent defective pricing findings by a contract auditor. However, it could also be indicative of estimating system deficiencies where corrective action is needed.

DFARS (DoD FAR Supplement) 252.215-7002 defines an acceptable estimating system one that provides procedures to update cost estimates and notify the Contracting Officer in a timely manner throughout the negotiation process. It does not extend the requirement beyond the negotiation process.

Effective immediately, the DoD has instituted a policy that requires contractors to execute the Certificate of Current Cost or Pricing Data as soon as practicable, but no later than five business days after the date of agreement on price.

But what about sweep data submitted between price agreement and certificate date? Won't that lead to delays while contracting officers take time to consider its impact on price? Good question and here's DoD's guidance.

Contracting officers shall defer consideration of the impact of any cost or pricing data submitted by a contractor after price agreement is reached until after award of the contract action in order to avoid delays in the awarding of the contract. Any cost or pricing data submitted after price agreement shall be reviewed and dispositioned after award of the contract action to establish whether it is rendered that the certified cost or pricing data submitted up to the point of price agreement was defective, and to determine whether the Government is entitled to a price adjustment.

To avoid the consequences of finding cost or pricing data after the date of agreement on price, Contractors should focus on the adequacy of their estimating systems. 

The full policy memo can be read here.