2.1 Acquisition Planning & Strategy Development (FAR Part 7)

2.1 Acquisition Planning & Strategy Development (FAR Part 7)

Acquisition planning is the statutory and regulatory foundation of the federal procurement process. Governed by FAR Part 7 (Acquisition Planning) and supported by statutory mandates in 10 U.S.C. 3201 and 41 U.S.C. 3301, federal agencies must conduct comprehensive acquisition planning and market research for all acquisitions. The primary goal is to ensure that the Government meets its operational requirements in the most effective, economical, and timely manner possible while maximizing full and open competition, prioritizing commercial items, and minimizing total life-cycle costs.

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Statutory Framework & Core Objectives (FAR 7.102)

Under FAR 7.102, agency heads must prescribe procedures for acquisition planning and market research to coordinate and integrate the efforts of all personnel responsible for significant aspects of the acquisition. Planning must begin as soon as an agency need is identified.

Primary Statutory Objectives of Acquisition Planning

1. Promote Full and Open Competition: Structure acquisition strategies to maximize competition pursuant to FAR Part 6, avoiding restrictive specifications that favor specific commercial vendors.
2. Prioritize Commercial Products & Services: Acquire commercial products, commercial services, or non-developmental items to the maximum extent practicable under FAR Part 12.
3. Select Appropriate Contract Types: Match contract structures (e.g., Firm-Fixed-Price vs. Cost-Reimbursement) to project risk, technical complexity, and market conditions under FAR Part 16.
4. Optimize Total Life-Cycle Cost: Evaluate total cost of ownership—including acquisition, operation, maintenance, training, logistics support, and disposal—rather than focusing solely on initial acquisition cost.
5. Fulfill Socioeconomic & Environmental Mandates: Integrate small business set-asides under FAR Part 19 and mandatory sustainable, energy-efficient, and biobased product preferences.

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The Integrated Product Team (IPT) Structure

Acquisition planning is a collaborative, multi-functional effort executed by an Integrated Product Team (IPT) under FAR 7.104. The IPT aligns technical, financial, legal, and contracting expertise throughout the acquisition lifecycle.

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Written Acquisition Plans (FAR 7.105)

For procurements exceeding agency-established dollar thresholds (e.g., $10 million for DoD, or lower thresholds established by civilian agency supplements), a formal written Acquisition Plan must be prepared, coordinated across the IPT, and approved prior to solicitation issuance. Under FAR 7.105, written acquisition plans must address two major sections: Acquisition Background and Objectives and Plan of Action.

Required Contents of a Written Acquisition Plan

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Consolidation vs. Bundling (FAR 7.107)

To protect small business opportunities, statutory rules strictly regulate the combining of procurement requirements under FAR 7.107.

1. Consolidation (FAR 7.107-2)

Consolidation occurs when an agency combines two or more procurement requirements for supplies or services, previously provided under separate smaller contracts, into a single solicitation. Consolidation is prohibited unless the Senior Procurement Executive (SPE) or designated HCA executes a written determination showing that consolidation is necessary and justified by substantial benefits (such as cost savings, quality improvements, or reduced acquisition cycle times).

2. Bundling (FAR 7.107-3)

Bundling is a specific form of consolidation where requirements are combined into a single solicitation that is likely to be unsuitable for award to a small business concern due to the diversity, size, or specialized nature of the performance, or the prospective magnitude of the dollar value. Bundling requires:

• A detailed benefit analysis demonstrating substantial measurable financial benefits (e.g., 10% cost savings for acquisitions <= $94M, or 5% / $9.4M for acquisitions > $94M).
• Written notification to affected small business incumbents at least 30 days before solicitation issuance.
• Formal consultation with the Small Business Administration (SBA) Procurement Center Representative (PCR).

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Inherently Governmental Functions (FAR Subpart 7.5)

A fundamental statutory boundary during requirements definition is ensuring that contracted tasks do not include Inherently Governmental Functions. Governed by FAR Subpart 7.5 and OMB Circular A-76, an inherently governmental function is defined as a function that is so intimately related to the public interest as to mandate performance strictly by federal government employees.

Categorization of Agency Functions

+-----------------------------------------------------------------------------------+
|                           INHERENTLY GOVERNMENTAL                                 |
| Must be performed EXCLUSIVELY by Federal Employees (FAR 7.503(c))                 |
| Examples: Contracting Officer duties, military command, budget approval, policy    |
+-----------------------------------------------------------------------------------+
                                        |
                                        v
+-----------------------------------------------------------------------------------+
|                         CLOSELY ASSOCIATED FUNCTIONS                              |
| Permitted for Contracting ONLY with Heightened Oversight (FAR 7.503(d))           |
| Examples: Source selection evaluation support, budget drafting, policy studies    |
+-----------------------------------------------------------------------------------+
                                        |
                                        v
+-----------------------------------------------------------------------------------+
|                             COMMERCIAL FUNCTIONS                                  |
| Fully Authorized for Private Industry Contracting                                 |
| Examples: IT helpdesk, groundskeeping, janitorial services, routine logistics     |
+-----------------------------------------------------------------------------------+

Statutorily Prohibited Actions (FAR 7.503(c))

Contractors are strictly prohibited from performing actions that involve the exercise of sovereign government discretion:

• Directing or controlling federal employees.
• Binding the Government to financial or legal agreements (e.g., signing contracts or issuing modifications).
• Determining agency policy, regulatory content, or program priorities.
• Participating as voting members on Source Selection Evaluation Boards (SSEBs).
• Approving agency budget requests or press releases.

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Exam Focus: Worked Scenario & Decision Analysis

Scenario: The Department of Transportation plans to modernize its national traffic monitoring infrastructure by combining three existing regional IT support contracts (valued at $4M each) and two ongoing hardware maintenance contracts (valued at $3M each) into a single $18M solicitation. The Program Manager wants to issue a single contract directly to a large system integrator.

Analysis:

1. Bundling & Consolidation Triggered: Combining five distinct requirements previously performed under smaller separate contracts into one $18M solicitation constitutes Consolidation under FAR 7.107-2 and potentially Bundling under FAR 7.107-3 if small businesses are excluded.
2. Mandatory CO Actions: The CO must notify affected small business incumbents 30 days prior to solicitation, perform a formal benefit analysis, submit the package to the SBA PCR for review, and obtain HCA written approval certifying substantial economic benefits.
3. Inherently Governmental Check: The contractor may provide software installation and hardware maintenance, but government personnel must retain sole authority over final system acceptance, contract modifications, and traffic policy regulations.