The Federal Acquisition System: An 8-Step Primer

The federal government is undeniably facing increased budget austerity. That means the government has become a pickier buyer. To grow sales now, it's more important than ever to understand the nuances of the government's buying processes.

Over the course of 15 years helping technology companies do business with government as a founder of immixGroup, I've presented, taught and lectured on the subject of how the government buys. What follows is the result of those 15 years of effort, digested into an easy-to-understand eight-step guide that helps make sense of the federal acquisition system.

[Related: Practical Tips for Working with Government Vendors ]

To set the stage, meet the key players involved on the government's side. There are three distinct chains of command involved before a federal contract action is consummated:

The program office: Programs are what the federal government does and what Congress funds. For example, the Department of Defense has weapon systems development programs. The Federal Emergency Management Agency has first-responder programs, and so on. Program managers (in the Program Office) own the mission and the budget, but they don't have the authority to bind the government contractually.

Finance and accounting: This group ensures that a proposed procurement is consistent with congressional intent for the money. To start a contracting action, a "fund certifying official" (in the comptroller's chain of command), verifies that the proposed contract fits within the appropriation -- and that there's enough money for it.

Contracting shops: This is where procurements actually get done. Program people present requirements, market research, and other supporting documents in a purchase request to the contracting shop. A contracting officer reviews the acquisition planning work of the program office and, if satisfactory, conducts the procurement according to the Federal Acquisition Regulation (FAR).

Now that we've identified the participants, let's look at the game: the steps of the acquisition and procurement process. The first four steps take place in the program office -- the people with a mission and a budget -- and result in a purchase request (or "acquisition package" if the procurement is large enough).

1. Agency vision/need: Procurements larger than $150,000 begin with an acquisition plan, and acquisition plans begin with a statement of need (FAR Part 7). This may be a short-term need -- requiring action in days -- or a desired capability for years down the road. The type of need and how it's defined sets the pace for all the next steps.

Always ask whether the need has been defined, and who is weighing options and trade-off factors such as whether to lease or buy. It's important to get to know all the stakeholders and influencers early in the process.

2. Market research: Personnel from the program office, sometimes assisted by contractors, collect information about options available from industry to meet the need (FAR Part 10). Tools used in this research include requests for information (RFI), sources sought notices (SSNs), and pre-solicitation industry days. For small procurements, the research may simply be done online with telephone requests for budget quotes.

Always ask whether market research has been done, and who conducted it. Make sure those people receive your information. Copy others in that agency who are interested in your offerings, but don't add to the clutter. Make sure you send only substantive, relevant information that addresses their requirements.

NEXT: Federal Requirements, Funding And More 3. Requirements definition: After researching the market, the acquisition team checks available options, defines the requirements the procurement must meet, and determines how quotes or offers will be evaluated (FAR Part 11).

This is where the real selling occurs. If requirements haven't been set, you have an opportunity to provide information explaining why you offer the best value along with language about the kind of requirements you can meet -- that perhaps your competitors can't.

4. Funding: In doing market research and defining requirements, the program people request quotes from the private sector to understand how much it will cost to fulfill the need (FAR Part 31). Program managers continually make funding requests and compile accounting data. Once there are sufficient funds for a particular procurement estimate, a fund certifying official signs the funding document, and the contracting office can get to work on the procurement.

At this point, the contracting shop takes over the procurement and stays in control through contract award.

5. Solicitation release: The solicitation explains the contracting method and type to be used for the planned contract action -- typically an invitation for bid (IFB), a request for proposal (RFP), or a request for quotation (RFQ). The contracting shop prepares the solicitation and the contracting officer named in the solicitation takes over the process.

The solicitation formalizes everything defined in the acquisition plan. To get ahead of any potential problems on large procurements, draft solicitations are often available for comment before the final solicitation is issued.

6. Source selection: The source selection team carefully follows the solicitation requirements and evaluation criteria to avoid the possibility of protest. This is why the requirements and evaluation criteria setting steps are so important. Communication between the government and participating companies is highly controlled -- typically reduced to writing -- to ensure a level, competitive playing field.

7. Award or order: The contract award occurs when the government declares a winner and signs the cover sheet of the original solicitation. Under the RFP and IFB process, the contractor is legally bound to deliver what was proposed or bid. In the case of an RFQ, the government extends an offer to buy when it issues an order. An order recipient does have the right to reject an order within a few days.

If you are not awarded the business, ask for a debrief in writing within three days. You also have the right to file a protest, if you believe the source selection process was flawed.

8. Post-award: In this phase, performance is tracked and reported in governmental databases. This also is the time to look for additional opportunities.

This is a cyclical process, after all. Leverage information you gain during delivery and implementation to anticipate new needs or requirements for another turn around the acquisition and procurement wheel. Building a federal client base means continuous relationship building, even after the contract is signed.

The preceding information was adapted and digested from the book “The Inside Guide to the Federal IT Market,” published by Management Concepts Press. For more information, visit www.insideguidetofederalit.com

Steve Charles is a co-founder of immixGroup, which helps technology companies do business with government. He is a frequent speaker and lecturer on technology and the federal procurement process. He can be reached at [email protected].