AD-A156 565 IMPACT OF PUBLIC LAll 98-369 ON AIR FORCE LOGISTICSCOMMAND (AFLC) CONTRACT ADMINISTRATIVE LEADTIME(U) AIRCOMMAND AND STAFF COLL MAXWELL AF8 AL

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AIRLOIS COMMAND

CONTRACT ADMIlNI STRATIVE IEADTTWI

LNAJOR 1),"MD K. HEDGES 85-1115 JULl 11 985"insights into tomorrow"

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for pubU'; aa Bala.~jp~

8506 ~ 19

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DISCLAIMER

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-0

REPORT NUMBER 85-1115

4TITLE irf,'PACT OF PUBLIC LAW 98-369 ON AIR FORCE LOGISTICS

C Of,11iA NF ( AFLC) CONTRACT ADMI1NI STRATI VE LEADTI lyE

AUTHOR(S) ilAJ UR DIN D i K . 11. mU:;A F'AJ OR AJFRI,'i.) VAC. JRv USAF"

FACULTY ADVISOR *"L-JOR ~Ai ,. W-ARDNi"R :.

SPONSOR NL Y; f ALCP-1

* Submitted to the faculty in partial fulfillment ofrequirements for graduation.

* AIR COMMAND AND STAFF COLLEGE

AIR UNIVERSITY

MAXWELL AFB, AL 36112

JIMR~ stJ -T- CASSIFICATION OF THIS PAGE

REPORT DOCUMENTATION PAGE1. qEPORT SECURtTy CLASSIFICAI ION lb. RESTRICTIVE MARKINGS

20. SECURITY CLASSIFICATION AUTHORITY 3. DISTRIBUTION/AVAILABILITY OF REPORT

2b OECLASSIFICATION/DOWNGRADING SCHEDULE

4 PE RFORMING ORGANIZATION REPORT NUMBER(S) 5. MONITORING ORGANIZATION REPORT NUMBER(S)

6& NAME OF PERFORMING ORGANIZATION 6sb. OFFICE SYMBOL 7a. NAME OF MONITORING ORGANIZATION(if applicable)

6c. ADDRESS (City. State and ZIP Code) 7b. ADDRESS (City. State and ZIP Code)

36 1 12A'

8. NAME OF FUNDING/SPONSORING 8Sb. OFFICE SYMBOL 9. PROCUREMENT INSTRUMENT IDENTIFICATION NUMBERORGANIZATION nlr applicabie)

*Sc ADDRESS (City, State and 7IP Code) 10. SOURCE OF FUNDING NOS.

PROGRAM PROJECT TASK WORK UNITELEMENT NO. NO. NO. NO.

I1I TI TLE (Iclude Security Classification)

( (" i:'iiL ( I, VJ 'X'-369 oi A it ___________

12. PERSONAL AUTHOR(S)

Da~,±rivid K., jo U3AlF; *-ason, Alfred .. ~oU~A~13. TYPE OF REPORT 13b. TIME COVERED 14. DATE OF REPORT (Yr.. Mo., Day) 15. PAGE COUNT

FROM __ __TO _____ 1 i8 Aril*16. SUPPLEMENTAR" NOTATION

17 COSATI CODES 183. SUBJECT TERMS (Continue on reverse if necessary and identify by block number)

-FIELD GROUP SUB. GR.

19. ABSTRACT (Contsnue on reverse if necessary arnd identify by block number)

ir.)viii~~~z c)r fi0 v2 the in-ac t 0X fK q- -YQ on Ar.oc j

JR nf Lht. r, Linnsldh htobLween ch~ c in car. tr,~tn~

20 1O,!irHIHUTtON/AVA1LABILIy O~ (F ABSTRACT 21 ABSTRACT SECURITY CLASSIFICATION

UNC( AI.SIF I E O'UNL IMITE 0 2' SAME AS RPT [2 TIC USERS C3; £.. ; i

22a. N.'1Mt RtSPIONSIiil-t INIJIVIOUAL 22b TELEPHONE NUMBER 22c OFFICE SYMBOL

DD FORM 1473,83 APR EDITION OF 1 JAN 73 IS OBSOLETE VjSECURITY CLASSIFICATION OF THIS PAGE

PREFACE _ _ _ _ _ _ _ _ _

-. nor essi onal1 mandates have affected the E,0D accuisi tior,or cc e;; in many ways. Frequently, l aws are enac ted winI cu tcors-iderino these impacts. The purpose of this project is todet-ermine the impact of Public Law 98-369, the Competition inContracting Act of 1984. on Air Force Logistics Command '(AFLC)

Contr a ct -dministrative Leadtim"i$. This has been accomplished,to u ah analysis of existing legisl ation . historical AFLC--

ead ti1me data. and the applicable regulatory requ~rements. Whilethe data used pertain to AFLC. the conclusions can be generalizedt,- all wholesale logistics activities which deal in weapon systemr ecien ishmen t spare par ts The authors wish to acknowiledge the4 nvaiuable assl=-tance of Col Forrest N. Dye, Ha. AFLCxPM-i.L *

-,on sor a nd content monitor, and Mai Mark Warner.ACiSC..-EDOWC. * acu I ' advi sor . Their support and en cou r apcemen t

addcompletion of this project.

I_ L

_ABOUT THE AUTHOR

Major Hedges began his Air Force career as. a mi ss I e

unc.: cf i cer .t Mal mstrom AFB. Montana. He spent a most .i-

.. rea= in V<issle Operations and w,,,as then selected to participate

in trie Education lith Industry program at Hercules Inc., Magna.- Rth . From there he w#as assigned to the Cocen Air Logist'cs Center

a-s an acquisition contracting officer buving F-1b replenishmentw'oare parts. Subsequently, he was assigned as the Chief of the F-4

spares section. One year later he was assigned to the AFLC Career

Broadenina Program at Oaden completina the two year program in

19,S4. tl_ .,or Hedges graduated from Brigham Young University in 1972

i.:BSth a 83 in Zoology and from the University of Montana in 1?7&

wI th a Masters in Business Administration. He Is preser'v

iiatteniding Air Comrmandl and Staf 4 Coll1ege in residence.

Major Mason is a navigator with 6 years operationa,

e,perience. both overseas and CONUS. in the F-4D. He has rbeen an

acqu : ---I tion co, tra,: t i ng officer since 1978 and serve, as a

contract negotiator and a contracting officer in AFLC. In-dd. ti on. he Was a contracting division chief at both the AirLc'o i Logistics Center and Ha AFLC levels. Major Mason is a 1'70

gradua te of Youngstown State University with a 8.S. in Busines-

.dmr, snistration and a 1982 graduate of Utah State University, with

Masters in Business Administration. He is presently attendw:-g Air

Command and Staff College in residence.

. u .- , °J

TABLE OF CONTENTS _______

Pr et -k a e .. . . . . . . . . . .. . . . . . . . . . . i I

C~--iFE~OH.E - lNTRO[i.LC.-TlOt-4

;ima tions Ob.jec 41..- es.. .. .. .. .. .. ... .. ... .. ... .. ... .. ... .. ... ..... 4

CH"'PTER TWO- CONTR: -4T AVMINIE;TRATI)JE LEADTIME ............

tCHHF'TIEFP THREE - AFLC CONTRACT ADMINISTRATIVE L&4DTIME-F F T :14................................................... il

.- 'A*PTER ::OUR - IPACT OF PUBLIC LAW 98 - 369 Or. ICALT

I m p. i~tif....................................................................9

,-1i"Tc-R Flk '.E - ir.JCLUS I OCNS AND RECOMMlENDATIONS

F-crncfusio ':n.......................................... . 2;-7-,: orrirre nd at o on=. .. . . . . . . . . . . . . . . . .. 2

E: BL GRf H . ... .... ... ... .... ... ... .... ... ...

_LIST OF ILLUSTRATIONS

TABLES

TABLE 2 - I Hcquisition Cycle Time Standards ............... :3TABLE 2 - 2 AFLC Contracting Actions by Cvcle ..............TABLE 2 - 3 Col Tar Stratification of AFLC Acquisitions .....TABLE 2 - 4 Breakdown of C:ycle Times ........................... 1iTi _E 3 - I Cycle 4 Averg.e Processing Days ................ 11'. TABLE 3 - .2 Ccle 5 Average Processi rcg Da'.................. 12TABLE 3 - 3 Cycle 6 Average Procesing Dac .................... 12THBLE 3 - 4 Cycle 8 A ,erage Processing Davs ................. 1TABLE 3 - 5 L Iheighted Average Processing Time F*V 82 .......... 5TABLE .3 - 6 Neighted Average Processino Time F, 83 ........... 1!TABLE 3 - 7 Neighted Average Processing Time FY 84 ......... 1.tTHELE 4 - I Peagregation of AFLC Contract Awards ...........

FIGURES

FIGURE :3 - i AFLC Weiahted AveraQe P'rocessino Time ........... 16FIGURE 4 - 1 Trend Line Prediction of FY 85 Contract Awards . 22

. ",

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EXECUTIVE SUMMARY

Part of our College mission is distribution of the Astudents' problem solving products to DoD)

Ssponsors and other interested agencies toenhance insight into contemporary, defenserelated issues. W~hile the College has accepted thisproduct as meeting academic requirements forgraduation, the views and opinions expressed or

N implied are solely those of the authot and shouldnot be construed as carrying official sanction.

"insights into tomorrow"

REPORT NUMBER1

AUTHOR(S) '11)r K R HEDESE. UJSAF; NIAJOP LP E.

TITLE T HE IMPA~CT OF PUBLIC LAW 98:-369 ON~ AIR FOACE LOG I ST: A.C ~f1AND CON TRAC.T A.5 !1t-,,I 5TRA-JI YE LEADT IME.

Puos To- determine i~the c har es I n conrt rr I n~ced'..re' speci~e In O Pujblic: Law~ 98-36P will adverse; impac:t

InA- tQIM I S ctra t 1 Ve Le'odt ime <:CALT).

P r ob 1 em: Pec en t 1 v, the Cocriess h az passed ml C., a-. 1 nC - t 0 I egi1; te comp.etit io ir n the alcqui1sitCio pil rocess.. .-

k7~ni.these laws cr.are contracting pro'cedures arO: resul t- - 't c al "icralod for con tract ing~o offcers. * ese

I .rit.a As Uit 1 require more time to ac Zomp i h 5-:A

c onratn PF~ e roceres~r on t:A1T b-, arial .z 1 ri. the o'r r eI o~.1C-M ec hange anid ni1star ic ':11eadt uic dat Lega- imet- - -: *i~ sca1 ear E ( FY) 9: - 8-4 .-er e an a vec c 5e t'e'-1-r, --

-uv, F Of*!Qtuaiocns in rCALT expcerienced cy 1 nlo t n I-- rr : t h anal 4 B is it w s. oic u, that E -r e, irnt~

Ee I r figiirn 1eadt ime increase, the majocr i t o~ ih 1 C: .:ecOF1 nareir E Cn ompet i t ion in the R.'ui s1 i "on cro esE .

wm or i no th-e vrccedu-ai chang~es ox PL 9 C ~e tc0 ~a S -. * , -s: -d Cr-iLT imoa: t was determi ned to b'e arn incr ease ot~

Sa t e s I dcls

4.~+ •J

_________ CONTINUED_ ____

I II 1 U I C . .. iL 7 ' r , co ir t .: -.C, r -. r ,, m i. In I -i cb- . ,,,! or } i n 9C r o:,a s.e d" .,-e t z-'' dcv- P c Z

fC,:,k C: t z s- i n i can t -. the irn ac . or, C: -U i -I . S_ e *! e sr, Qe ' f ;ec r t + n .

. E a e soer:t r. this c.atecor; vet th is acc ou. ".

e; -,'ro '. h- ".he c cn tracts; s.ue-, These a- t e ;-. i -~-'=d t: t ,~ e kC.! 1 at. ,h -h u, t in m & a : w i e .ra t e

zr ;t i: : e 2rie 7,U s- t aC t r, e, :rir.ate cc r .-

. . - r u z.J, o 1 -. .s.e t of t'1 i .s

- - rr__, _ '

__ The -. r Lco .t it = er, ter- eec, : Cer .-0 1 - r e-M_ - + f e c ted b,,- PL 9;' - 1 rrri e d- t e I.,r

.- , -,. th_ terded If I e E. ut rnt erte, ,

- erer, --erer a t i r . . e r t: ---ri .s.nd .0-- " : , cm en e+,-,r +r~e -r - ed ri_-AL- ,' "

p

o.

I r-A-JTRC. Ev L ' DW I cs r-A

-onc e Log~ i z s _.-Drmmar' d (AFLC) E- i e n i 3sh m en t S j-an rest no was the cenl te-fin -ne medi a scrutiany beoinnr~-:

* ~.cr * 133.Atthat time, Air, Force -con tr-a':t i n :r ac t ate th e :Sulb..1 er: of :-; Eperia 1 ABC Newjs 20./-20 report . The re po rt

i c-1'ir ted Manyri a 1 eied inst siices of ov,.encini -ce.. soar e pat. rCC b - v the r' Force from Pratt a2kno c'I, i t ne v A irc raft

on r, aa r . 4est ?:'a n-m Beach p] ar t: . This wias= the first -4f rumer ous_mcde:Ji i 1. ec ti on s cf spa re pants orpicn ur ing ~G

77, M Z .md I zl b i t: high 1 i 'g> ted to the Concnesa-- t to t i eD *r pub 11c ?.n-a, !pernhapa. for- the fi rs t time in many yera o- .:-nn1ion Depqar tm-en t of Defense arid Air Force 1 eaders i p . the

-, 'r n q prob I emrs a --sc'c i a t enc wi th the a. c q u sit ion of spakr-e'S - 'A.) This 1 e:- Secre t ary of the Air Force 4.erne Ornr to

f er, A ir Forc e >1 a n acem en t Ana A-IvS i 'E G ro.up (AFMA.'G). toe r 4 t e t he not; emr. He c hose an e>-per ien':i I oc~ist ici an a:-nd

dma den [i,~ c- eneral Dew,,e/ K. K. Lowie to. 1 ad a threer udv. o)fT tte. reci era shnrt paepar t-= z~onces. Our in'; the

VS n u <a: e, ueo u s ae:of +or-erpr iceom 7scare parts 'crdi 3: <er e. T :' diete-:,: ne the u'I t iite c a use ot+ ot. erpr i C no.i t h

* c ar ae s 3 t~au 1 -Ei t I in r-cr ce s s 'ias t hc' C,'~ r -:, am: red.r s' ut tn- &"Flf4G made 159 separ ate e coDrr e no a n t-

.br I0 einE C - sc-e r i?, alunio riv ne. -k. (:-4'I I a~C r ef--rjeoiiana t icts _7 io a c t 1nc, cc'r rac-txrc c- actices :I. '

4r l3 r ec'"r in .rdat i c-n. s .ier e in s ati t:< a -ia : :e2 ,ne c Cc sts' ie d Ll r tco ritc e - Cc.mip e t o

-2 - .- h -L; and a n ewi nea dqu ar te F FLC Of c:et~~tc or 8'. :a etd ':62- 4 T c ;r. ow:

t coi,' re c es *kr t ins uire 1 nne:'endlert a: on *the _1 r -ct rc r .oe;'t 1 t 1 or s-v' 'r -tser e e z ta a shec;drc I rn :c er t-

'M <inn! anir, A~tFL,- the HPC corminr icr . --40 *3 r.r ur", rt +t 7ese rewt na nec tonates I,?zc ana-4. '.'c tre =nre r e

rbrl-~ ;Rt en ;r h i- L, ith c?r ti1c ulIar t t e n t c..'er. rt.rr ! rsc'4 t he p o cet t I ; e st at us cof I terr=i t- -'e -akui reci a -

. r..... . .t u. r. r .- - . r L- i 5 .-*, .

rter. revt t e ._.1 eer. T-e -. 'e ; t Ni i - .(- t rf-7,

-- .3 t h- eJ rr -rl t b--

.. . ,' I -- d .

c ;w n-- : t e d _ m E-.. .: - c, r.-e C:. . -

z'~' a.:e t . a ,,- t ic re Sgi . T e . ., -. _ -r, o-- j :: 4 :

* - r t re,.t e.,. contra t.- a s c r.. c .. t r, i . -e r et -e r C. - ie i - t re t -e,-e aCe n':,- e rS, O t7e t Co-

-_--,,, t a c r , e-' o elm rc.-se-.s T Ch e as - a l r ;f i r ". --

:,errri t = th q , eaeot ,, dai er eq i--. t2 or1-:. ,,. 1 .z o tar~ .

- r~~ed i -e-1 -. tht ro t e,.'e o , s .i . nc : n....e- :,---v .r :p c i sa '. -

m-- " v e. . c-je- , r. ,r t -an c- e c - ie e _ e. q o n ;

Cfl ~~~ ~T1 cF- _:t rev el nrc~ zl ronr-=-= ni

TI t-a PC t rr cacas I t I' drr e~tnio--...- p'' I '-r - xcrea CS ari r

e (r.,e eo p. e. 'n E S-E,T 4Le~cr 1 znr IF i C!'.' r t O a; t '' , -'- d t,-e- r. dr~ a C, -tfe-c' m

Trier etc:a. e ii ri s t r ati -.-'e Ic-:It mie c a.na re ,- f

n , tr, r, I IFLC. Fr,'tr:c. that a: er.eiv irecs-t .- - t ,-

,,, -' r,.' e -.i -et t r, benef i t r, the :_=' c-f -I rp.:h-.se- .

.e+ ± ¢ci ai'- :-.

T e ._-. de-firi tic. - i 1 -,e u.ce hr j-hc'ut -,i.r ar- e z, r'- - d -i- cn: o-,' enent r ,ee ce 4 en -

AFMAG the Air. 2 ore .r"-n-qe.i =t _r YAs 13rou:',

A LC R .-. .r, € i ,-, i ,_-._= S enter. C!, : h - - :.

L - 2- ;h:_h na . I-i , Ta r AF, -

- -HL.. ± - -'--er -L.C- r- i 5FE - IT ,

m--Z:I 1: - -, r arnerc H,: , c~ e'- le 2 *,n, -irE.

* V.--[ L_ 'Iarr:-&r--2c.-tcir, ,AL,> K : ._,.-Z0 _ r.

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L2 2 -.; _ _',L _''.2 " " ;" -" " /' I l l l lmI I I " :

, .,'", _'2.', .. • _ "-. ",i".. >'" .- -, -"

. . . . . . .

AFLCR 70 -11 1 .hi t mc ,= Iu I z*,,,, F . ,.";F

-*. = t -, l tt,. ie rb I ,,:, r ,.,i r- rq, -, r a. ti -e Le- . irre.

,, Es t -I - - ,. , nefir tl,-,r of zq,. ,- r, -

0- . £-, ir.!- a I ] a. :,r--du c t used in .is u .udv.

Bid Board s a ..:ar d i t ed the C v'li t,:,- r r, : .,-: i t -a , i on are o D s t e d or t h e b o r C ,

; -r s pec t 1..e corftrzctors a, bout Cur-r er. aC Q I.L t Ior,

CALT s L o r c .,1 -dri -tr at ive Leadt ime

CR f- trr L.: r. ectcrR te C-i Competitior, Ad'..'ocacv.

D & F s, 1t r mi r a t 1 ,r ad n aidi nr.n . me . s pe IC .o , r i t e r, a-',r,..1 , an au thor- Zed c + : - c i a t hat

*-e.utr:ed . tatu te r- egu I at i or as a prerequ i sit te to tak 1 nccorn tract :nc, actions.. The "determination is. a r o n c 'I u s 1 or,

- :e, s. i r supr-,or ted bv the 'indings." The fi, dinqs ar e-t erer t.- +t tact Or rat - or a1 e essen t C;a! t I-., ppor. t the7-term~ne. t7 -r 1 - .r ard must :over each requiremermt cf the -tatute or

FAR s t h Feder I Acui si tion R ecul _,.t or and l I-per mer, ts t. heret ,h i ch cod i + i es. al regu 1 atc rv rest, c t ions

- e c o -,trs.ctir , proce .=.,

The JO-4 1 Acquisition and Due-In System (ADIS) i eS,crrii ter s- s.terr, froM c ,,, hicr the contra:t nq data. +--or this stuad• _;r c 7..n Th: . .vit-m provides a comp ete audi t tr. l r - ._r

.,,u: it I r fr.,,m F'R ince-ti on through final del i,.er:.., of n-eh i, r J!..1. - e .

MIPR - . i l i ta. I rn terflepar trrer t.-. I F r cra :eTt ,1 _a . :~- ee. t- one br..rch o th .r,. to ,urchase

S tme s -; ar. a :ed v .,n ,rc t ,icr br ar c

Pacer Price i. , 1r,:Q: 0ro up es.t -bl 2 s hed at .- _-,: > I. e- ticate --c, re .rt_ pricirn techniques. 't Ias. for ma

e-- -- ,_r t t- c' i 1 1 _L:_ b. the AFMAG r-ecom mer datiocr--

Pipel ine Cost - h- cost to, ha've a i -errs in t.e:,: thu a:,u~s i tior, pipel r e r. da..

H -,: bues ,,t C, 4 1 1 r-e=trer t ' r. e o erabl e I te-rs ar, Ed ,co0-crr, ,:- i. ur i . E .n-- t '.=tock'l fuid tems., i :! c -

PM -- :E- . re t r at e- .. c, t ia'_j

II

: ...... --. - ---. ..--.--. . -.-.. -. - • - -4. - .- . .. ., ., .? .- - -. . - - -.. .. .- " ." " " -..... -* ' : : : m ,. mma im W~ l~lm mml . . . "- . . .. ... .. . . ..1

Publ ic Law 98-369 i h c- - rrn~c, r-. 1.,itr A3 :

Sol e source acqu isi t ion .. * r-c -lpu r:ri ese ci-f proper ty, suppl i ie; or- serv 1,, C es lth ic h is en ter t-: r tc

r- op o se' to be erntered inrto b-, E, ejer- rez-r tme n t :ts:ir i t 1 rig and regot i .at 1 rig '. th or 1 ore c-our-e. 6 $4'.

'hr B cr tuay, 're au thorE ^re :r-ur asuT

r -ub'j c Lakw v236 i 1 '1ha,'e an imp;_-: t c-- CALTOr-,O I ~r i 1 34.* the DLfernse Acc!,.: i ior, R;,e,.-i at ior,

r. ep a-c ed b,, t he FA~R. Th e i mtpact o h or, CA L7 1 Et: ~ i ce b1 Ibe.

t.4 pr or edur R c h3ancQe : t'.A be ma de r1chc:u Id 7.. r; i r, -C_ :t t i me rrtQ A-c t cf t he d '~.'.T i dc,~ ro t ik r t~.

th -ir ' -rc I i not ch.ance pr.rred-e= to decrease t he 'rj~Qf~ ~h u' a rit i fi ca:o r cf + -o se + ut u 7 c h i.es toj i d rt

cc it b I th i _time. Therefore, they o.,) 1 nol b e r ,r i *1ce

i-or tti =pae.Th e .ippro.a 1o+ aI I so e sou r e I~J i. ion s be t...iein I

mi icr, -id J$lCi million kjill be .;ccornp1 7.hed att H F

MI ta t i ons

Th-is s tud y is intended to estimate the impact of PL 7 6CAT at the ALC's only. % t is badksE,: on an ana',Ys~s o + fhe

.oact o +D -ceV 10u S competition irni4t iat ies i FLC: .

1 -ed t o the ac c u r,,c y o-f t he a,..a i IA-ble d -t a maint.-ined iriu toria ted svs. terfl £

T ~ udI is design~ed to de t e -r i re te Ocn t FIc r1eBd t ime PL~T mpc . L Y~.

* h i t *h. e -c o I itii n g c.bje t v..."CS ee f-1- n e Ccnt -c t ,AdminijstrE ti....e L ontirrne CAi T .q

Je I be' ts frmpor t an :e . Thiis tI 1 be Czc omrri ie j Ie1 el" I 4 AFLC. Recgul o I a t or, zre f 'E- i e i 7;

F FL - .11jI S i t~ F proces. a I n -sdcli t.r *

PegtIf ,.r7 T-1 1 1 be u d d def nre t he A rc,,: I e. ue o t h.z te kCQ

p

. etermin e tre actua FLC '- LT d, ir, the per icd {rcmF) - F t 4 e-y exam iriLno the ,_0-41 histor ica. morthiCHLT da t. The c t. for acquisition .- cle - 4. ..-., and

I 1 b array'ed to determ2 re the C"LT t,-.r Ft :2 - F.- 04.

-. Determin e -f there were any' major flu: rtuat on s i,.kLT du ri nc4 this period by ana.l yz i ng the CALT d-ta

presented in ooijective 2.4. Determine :f changes in contracting procedures causecthe fluctuations :n CALT. This will be accomplished by,.::arr. i n ir,g the contr.ctirg environment from P: 2 - F, 4

to d i scover any' , contracting procedural hangAes mr, .dedur in ri the period and to relate those chan,,s to chanoe=1 n CALT5. Determine if PL 98-369 ,,1,ill change any contr. ac:tir,o 1procedures and to specify those changes. "his will beaccompl ished by analyzing the current publ ic laws Andregulatory dat.. to determine current contractingor oc eaures and then studying PL 98-369 to di sco., erprrocedural changes.C,. Determine if the procedural changes specified in -fifth objective will impact CALT and the nature of that timpact. The data presented earlier in this report o,.il1be ana'e'zed, arrayed, and manipulated to project theprobable CALT impact of PL 98-369.

The si z obj ect ives above provide the structure f-rdetermi n i ng the CALT i rpac t of PL 98-36P. The process is

r'tr._ightforward: define the problem, define the factors '..hichr- e .7 or the probl erm, anal .ze those factors to un ders stand how

."e impac t the pr oblem. an: final iv qeneral ize that impact toCD; edi-t the imp.ct of changes on the problem. The r esul ts ofth;_ -tudy can be used b% HO AFLC: to undersatand the Contract

* dr L n i -. t rd.a, t ive Lead t ime impact of PL ''8-3569 a.nd tale thene,-ces sr. action to. minimize th-.t impact.

44

- '- 5 5 54 .- 5 .

Chaoter Ti., .o

Sr. t r A r f -, 1 r 1 s. tr .t i v e L e adt i rne 15-= def 1 nec: a. t he e i e~*>e frm - r- r ec e ipt of the Durcriase re -. ue st PF: in th e

, :ec o r ate cj C.o t r .:r..c t i , an: ?'an'.<u ctr 1 n q uM UrI~ treC r.,t i s -a To ejriv th. Tc:~t o c is -.3.5?~

cl s c ss br i ef> r)e r ep 1en shmerir spzexre p Rr t E ac qu Is 1 i ontr.C': eFS

TF e rcess beq± rns ki t h t he u ser -hc, h as a9 -1eed +or a zAr t 1 .11~ - A. I.Ile ak;n S V em. Th e u ser r- ecu is i t or, s t h.at r-t + rom t re

o sC e U Iv *or i zskt i on. As r equ i s~i t icrns ae ti eed,ri e rt c-. s t c i-. ;-,eI i s derpi e ted. Nhen t he b,:.=e 41nven torv tcc

1.* dr ors to0 a s::oecified au e4 The base r equ1 s t ic;-;.acement iterns *rom trie depot 1"in iAFLC. tris i s Lr LC,.

~t t -1e _ L; n,.'en t o,- rn a n ge r s S.) r ecee trt.r equ i Ei t i ors + r-:'rr t he basea T Th e, ei ther mu S 4 f 1 -IIt-r e,,u i t 1 on s + r Cirr the PLC i rven tor:. or cee-.;ate a PP tc, ctu t the;

t e'r,. Ir n~rv cases. the IM k'gi 1 1be Dle to -fi' ' the r equi . tcofrr the irn er t or- ,, bu t t h is w ill ca--u se t he depo--t i rren lo;- t:

+~ 1, 1 be ci' a pr e. e term i n ed s +e s toc ', I Ive . Th erefor e . te T

1.i so Qerer a.te_ a PR to repl eni~sh the fLLC i nven tor.r- Th-is n r:a n gen er at e P PR +or one of wc reon E- tok 4

r equ I. -S I -n or to repl eni sh the i riven torv stock* ' evel . A+ ter-t~T r c orP Ie t e S the PP. i t is sen t t o PM + or the r e au ir ed

CU Oi1 SIt OI *.?-t ion s . This i s the point at which CALTbegins.*

+t e recei ot cf thp PR, t he c~ntr ac t in of i i er Tvus t..orrno 1.s~h Fr:an,, di fferernt tasl . to P1) ace that i ren D:n c on tr kct

~r ~ou o~bi c 'a~sarid executive -resrquire the :onr~~tc ta orromI1 1 sh ecx t ra t as V.s w.h er, t he uro i t icr 9.:ceez.:

Cc2 'e' r_- a 1e; theref :--e. the : urner n ta ss re,74u: re In

cn~t Ia rtr:,c t is dire-.ti ,, r el at ed to the r;-o; ct the arctirn. r:, ex'amole, :ir *E. o' ch n

LrC I.' . ~Cl l 0 -orntra~ctinrc, c-:i cer ca i, t e1 o n te r cre C'.u di h;- c on t r i * th r n a f "7

0r ~cir ~.? f.iI . hc.'.'ie er . t he CDr't .4 tro.Q ±1+

2< +. -fC d er e n ' cC. t r .c t ir,. :e:-i r eL. -: 1 'j7tF, 1he ,:rr.3-r r-et~s cert74ir Il - erq.j i r eriremtr -or, a.rrnc

.... tT, T r.:~ cr' the comr~l'r. r:t

,!.!,.

r - te.t .. ,e- cr d-C - D 2t r .'e ar, + ir,trTi 'e .i4' ccC7 e r, - ,. - are r-, r.i.J.jsr ,the I e-.&, , re ,r e e , tn

T n h:er ,_cr mut ccrm. lsh d -r -u dco Ie ,-ttre o - car ,'9 err, e nl r t. J t . e - I

-.,r .... t e f.asp. s t ed t.-. -49; _ fif ererjt do, I lar ',r e_=s.h,:,c .£ 'I ,s -ir. ch th

.:.r .... .; -f r,3 ,-ff ,:,er rr, . c r,- c,, p 1 1 s. h d r Ij r , l e - a :-,:I u I I ."

The ,-,,n f-~r F o - o be perfok-,rmed determ ,nc-- r-, * .

e- to a rd rrac , To -=-.n, I it.' c., -ee c,; rrr-e;. r e

"-k n d t c n.i ;-, i i gh 7, r-cob em are as, #IFLCL c 'en I ecr.o ed these t-s intc catecrie based on nol , threshc-, ,'s," .e c,- .IteQD * I e an acuisi tion cycl e. has standard numt'er

CIA d.-vsc r o,,l d take to ak.ria d a eorttract in that *c'. ee -I

-Shov-s 'he cYc es and their associated time standarns.

:n -a l there are 22 acquisition cycles; however, for tr,s

Paper ,.e lil 1 only consider the following cycles: 4 (58 days .dar -d) 5 - ( 100 day standard) , 6 -1165 day standard) and s .S

*Ja standard). There are three reasons for this: these cycles.- ,mr 1 =.e the ma.iority of the awards in AFLC, they constitute the

, j of- the co ntract dol I ars a,arded, and they enco, mpass most otte :1::et'Iit ie a rena.

ab e 2-2 Qr-,vides, the AFLC breakdon of contracts aw'jarded o':.

-c 'ji --I t 1;,n cycle. This onl i,. n includes the rr;a.jor PR.'M,.IPR generated

-7- Ct r IE-st -

-s'c 2-...r. . _nes the dollar tr atification of contract-,red dur' iro the fiscal year Th ,.s stratii fcat1,r, only

0 :r, mates t,--e acqu~sitior cycles. The importance of this table" trh t air: -imatel - 50". of the dol I ars are a,ar bed on a.ct I crse~:. -eedlf,,- £5 mill icr.

Tab e 2-4 provides a sample breakdown of the acquisition

.S att re r LC. This clarifies the concept of acquisit ion- 'cs b- detaa 'nr individual tasks comnpri sinq a contract

S., ._-rn. iTt ough each ALC mey h.e a differe-,t time standard -Forr v . i:. tasks., the st.anndards tend to be closelY gro'ioed

arc?. the sairm e .a 1 ,es. The importance of the cycle elementsis that the time required to accomplish any one element may

increase as greater emphasis is placed on competition. Por=4 r ro e , i t a con trc, tr ni stor i c-al I y had submit ted hi; propos.a..ls

"- ,' i pre C'ar t ir 40 days, ar,,d ;.Re assume thatII C ,...-s. cc u oJ r -:,mpet i t i'..;e ar: u si t i, ,n ar, d I t tool 45days 9 d.._ +,-,r =.yno. s + 3,0 d.ys for bio receipt to- - bids o r. t h t z-,ar t there .au d -a ive d - n creae"". rn for trt te =

(from 4 ia.s to, days: *

. c oa 1 d ,e of s e t c . d c r e s. s e in r o t e r. e em e r, t z-s the re•_=ul t -,a.: us- ual l beern an ir!,-rease r, c.er. l 1 r... .

.,.-

. .

,-. * .nf .AZ%.L:" * . . . . . . . . . .. . -.. . . . . - . . .

* -- -- - - - - - --- - - K- M7-7

T (PETNITLE CYCLE DA'(S

Advertised 1 9 0Two-St eo 2 200Source Selection 3 208

FR./,IPR Small Purchase 4 50Negotiated(Under $108K) 5 1100

Generated Negoti ated($188K-$6MiD1 6 165Negotiated(over Sdtlil) 8 188

Actions Letter Contract Issuance F 60Class IV Safety~ Modification J 30Lirpriced BOA Order Issuance K 0F 1.tornated Del ivery Order L 10Delivery Order/Prepr iced Call M 2-PR Generated Contract Modification N 6Undefinitized Modification(Change Order)S 25

NO.4N- Basic Contr-actual Agreement A 55PR/MIPR Provisioned Items Order(Modification)' P 18Generated Non-PR/MIPR Modification a4 25Actions Non-PR/MIPR Modification(PMD) T 25

Miscellaneous J041 input Z 5

Letter Contract w 180Other Modification(Change Order) x 180(Ac t ions Unpriced BOA Order y 150

Source: AFLCR 78-11

TABLE 2-1

AFLC Acquisition Cvcle Time Standards

S,.

CYCLE Y8 Y83 FY84m

1 756 441 8892 36 48 333 3 3 44 66,803 61,684 50,7085 34,548 32,431 29,1626 6,119 6,165 7,2828 255 297 381F 63 46 47J 15 17 7

'".. -:. 133 135 139

L 1,675 2.139 1.529m 5,511 5,528 3.463

TOTAL 115,917 108,918 93,504

Source: Hq AFLC/PMXA Historical JO-41 files

TABLE 2-2

AFLC Contracting Actions by Cycle (ALCs only)

Dol l ar-Rancei FY82 FY8 F Y84

n Dollars(Millions)

under. 25K $ 254 $ 234 $ 19325K-100K 1,869 788 68818OK-580K I1464 1,474 1,678500K-IN 817 855 929IN--5i 2,138 2,561 2,5775m up 5,479 4,468 6,122

TOTAL 11.221 10,292 12,172

Source: RCS HAF-LGP(M&Q) 7281 part XIV

TABLE 2-3

Dollar Stratification of AFLC Acquisitions

.5' .]'I**. . . . . .

. .................... .. ........ l m l i.... .. . . I

CYCLES -

II DAYACTION

PR Receipt 7 7 7 7

Prepare Solicitation 8 15 15 15

Receipt of Proposals 33 30 48 48

Audit, Negotiate.Prepare Contract 6 24 73 73

Review, Approve,Distribute Contract 4 24 30 45

TOTAL 50 188 165 188

Source: Hq AFLC/PMXS historical JO-41 files

TABLE 2-4

Breakdown of Acquisition Cycle Times

10

* .". - * .- .I. -

%- ..- - . .-.. ° .. . -..- ... .- . - ~ , .- ,- .. '*.. . . .,- , . *. . .. ,*-.-. . . . . -*.. -- .

7 ater Three

o:- FL- C r -. t t *aL Ad o=1 rn i ri i - r t i-....t i rr'e Fc -

,-.- 'r_. t .)- drr, nr 1 str t i .. e I e. d t i me n._ t e + ,...e , 4L C. "s -t i r!e, b.. 4i., A FLC:.."PtX- usi ;c data *ather e D ' the JAC-4i

Q4,, 1 i- or an1 r1,,z -r-, Sy'stem. Leidtime d ta. a re rn a t.r, ir , e, c r:?_:, n -d .. e s c, aree.ted Et command levei , Th .,

1 - ::k r, t i r is u.=.ed to determi re broad trends .9 i,..'er-se: . mpact i r.the _ i,:.u i ior pr. oc e . an:- to determine .mer ir di....iu. . LC

e pe e d .- rrobie-n.

T n', e.s 3-I tn r.,ou 3-4 p- ent AFLC aggregate I eadtime darrort , for .c es 4, 5. and 3 for Fiscal Years 82- -4.

.. :. 1ec ,.ar Feb Mar. Apr.,v jur Jul uj Ser,

5 C, 4 5 4 6 44 , 5: 5 5

o' ".4; : A 5 4.P 5 1 !-5 5:1= 53 53 -S c5 1

TABLE 3-1

Small PurchasesC.c , e i- Tire St:. nar.d 5 0 -

_.- .er. _ Pro'cesi1riq a:",k.

Lii

F scal tear Oct Nov.' Dec Jan Feb Mar Apr- May Jun Jul Au Seep

84 95 97 105 118 111 112 110 108 116 113 117 122

83 77 79 79 79 82 77 77 74 76 81 91 94

93 97 98 97 95 92 90 89 8'P 88 88 84

TABLE 3-2

Negotiated under $108,888Cycle 5 - Time Standard 100 DaysAFLC Average Processing Days

Fz zcal -ear Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Se,

84 137 138 152 166 166 167 163 163 158 179 180 173

33 129 127 124 126 128 110 121 115 125 139 145 153

82 156 169 157 165 159 153 148 147 144 152 147 12,;

TABLE 3-3

Negotiated over $108,8Cycle 6 - Time Standard 165 DaysAFLC Average Processing Days

2

01

F 'f:Ye-.r O:c t No,.- Dec Jar. Feb Mar oHpr May Ju1jn .J 1 ,,: 'er

33141 219 "0o 170i 2227 l11' 151 c,7 A2. 1'212

32167 5d 14 '7 23 14c, 18c,. 197 244 2n. 1 .!E:5 AZ'10 2 5

TABLE 3-4

Negotiated Over $6 MillionCycle 8 - Time Standard 180 Davs

AFLC Averagie Processing Day -s

The foregoing, data3 shows~ the actual qedie~ cQuisi ticr-1 e for the 1 .1..t three f iscal Years. To comprehend th-e over a' I

I mpac t cf the data. it must be aggregated ir,tc, a m ore ea _i1.u rd er st ood set of ficiures and examined to determine if t .ere ier'En M majOr' -fluctuations in C""LT. Tables .3--5 throucib 37 a ic t ht

Oe der mi r - t i on bt,' presen t ing monthlIy AFLC '.ALCs -_--n '.e i h t ede r. z, er;e plr ce ssi rnQ time by + i scal Year -,or FYE 832- :4. Th e

gIl'h t ed av e r a ge Qrocess i n' time s t a.nd ard is compu ted b%:mu i t ip I irn the number of documents issued in ei.c h ac qu Is It cn

t or, one mith times the standard number C- days at ot~ted +or.that cycle. The result is then diie ytettl number of

ort r A t s i ssued i n allI cycl es duringi the montth. The actualw~e 17h ted ai,.eraqge processingi time is calculated in the same msa.rre r-- eot the actual processing time is substituted for the standaT-.t in-C. This proces. is repeated for each of the acquisition cycler-t., -etermi ne the total '2'lei ghted av ,erage processinrg times,* bothiarid -. -d arid act ualI . The total standard vie i h t ed aver age

:r o c es si n :j time i s subtrac ted from the total actual '','e i gh t edA . aQ~ p r ~e ss.i r C t ime ton determine the variance. T hu;s . thec .omplut t ion ct var iance is a three step process. Al though allI

cu ;Ii ti or, c procesinq times and ..arilance a re a c compl.,s h e dwi thiir the JOJ-4 1 c ompu ter svs tem. a i implI ji ed v.-er s ion of t h E

r rm u se ed in tkh e se c om p utat io ns, is provid ed tco i I Iu st r ate t he~r:- S a+ fo 1

me- 6- t -:tua rocessa no tame.=4-iber ct contracts issued..5 z-. ndc: ?rc dasi I owe d fcor teito

c; Th. 'tact - =.,, s 'no er rror t r,7P+so n Lt.uh.- aeo t rosesdaco tam rTte

= s 4~ '4ih ttd a'xe-raqe cro c e ss i r:i t ae c t

Step 1

PTs= C. x~ S~

Step 2

P75= S R~C~cleI1 + P'Cvc'e 'a)~ sCcl )..

S -' 0 .c Ie + P TC'L e 2'. + PT.;"F-vc.VCi-

Step 3

'.PT 1- PTE

Si n ce ,a;. i ance i s the oi -fference betw,,een the stand-:ard asrid tiVtec tue:, processi ric t imes . it is the most irnrir - tent a n~crmat :on nth is zer, 1 es ci ta-bies. For exampileq in Trabi e 3-? the st e,darcJ

p r rce in c time increased fromr 75 day-:-.s in October. to SO~ diays..:eo- Timter .Thi4.s mean that the con tracts i ssuecan Sep-1temrber 1e

* -eli h ~more complex (ic. higher- prc'portion of cycles 5. 6.c or t'" Pe e+er ace q than those issued in Oc c-jber . In -addi z o

t.h e ac t u - I prc'ceFsia no time increased -frocm -61d i r Oc tc'er- rI.

HA os ir n "epterniber .The ai ance tel Is us t he t the ac tue. j

r e ou red t o m ar d arnvra conitract i ncr eFased 2:7. mc- e '2:Stardard f :rne itcrea s ed d u r nq- Ff 34

1:4 e - ?rnmeri:r aZCe. the nr-mayion -c;eci r TthrcI:h i- rn m mo r e e as i I, 1 urd r r. z.do m arner .t

r m t h C_ h.; t thrrr , n-c'zucstc IcutKr-LT d i FrQ 7" F2 -5 4. H.:;q C ,f-, I-

n- dr ajrtc th.- r th d errc re: thefr + ~ Ebal E-~:hegter- a temtt iet erm ir n e r roe? an tr

vcedur ij e E. rC t- e a ce~e Ir C:

Time t No. Der- Jan Feb Mar Ap May jun Jul --IUQ "'Dep

ctu:k16 676 7067 66 77 6 6 66 6

..tk n dar ..1 6 6 7 78 71 71 67 6? 70 70

I

TABLE 3-5

Weighted Average Processing Time FY 82

F'rc'cessirqTime Oct Nov Dec Jan Feb Mar Apr Mav Jun Jul Aug Sep

Hc tual 7 56 57 5? 60 56 57 54 57 63 66 .75

Standard 73 71 67 67 69 6? 69 6? 69 78 71 75Yar i.nce -3 - -1 -8 -9 -13 -12 -15 -12 -7 -3 0

i

TABLE 3-6

Weighted Average Processing Time FY 83 "

A~t this p'oint it is. important to understand there u'i 11 be* I so+from the time a con tract inri procedural charnge is made urntilI

1t im okc t leadtime. This is due to the kA'a v leadtime data are1 1 erc ted. NOc i nv rmat 1 or on a given acq i itin i u is gathered

ut1 af ter a contract is awarded. therefore. changes. affectn:nttracts in process 1rt be immedi atelm apparent.

I::

At hi D ir t it is ipo ta t o rlerstnd th re ,115l

I.?gfro th tim a ontactng poceura chnge s mde nti

T C.t -7ci~: F eb ~ - . J -u3

7r Cac 1 + - i -3 1 V 7 +g 2

TABLE 3-7

Weighted Average Processing rime FY 84

DAYS

+20

R +15~

U _5

E -LR

-20 -

FY 82 FY 83 FY894SOURCE: HQ AFLC/PtlX

Figure 3-1

AFLC Weighted Average Processing TimeFY 82 -84

I rl. 1-

0 t

0 "Fi .

;c,', t -ee-s<-' to~ r..,-.,_te, i* t ere. The C','eltE of rni,.- '."L-:- are

I irl ,..,F z. rt e'aj .L t_ IjPg=.,j - lr; ic. rt . crh ice ii n .,Cntr7CtrIQ Dr H E 7 e ,-fi r-. t cn -rQe. -ere imr-, emeen ,d _ at IC-C-.AE* C :-it I the'. ..er .- th . c,,- u o c of the 20-20 reos repoor t . -he - L_-

* ---- f., - - ,. , I cit --' a .o . .. . •~ h ~. u~cc~r~-+,IPacer Price. Ti ,r .- r a - t e red the i t erns t,: be ,:,-ugh t

, et rm - -f the- cu etabir e a , a b I e E, r C ,e .3 r th-

Q " - r c to, Eur .-c . i rq, them fr-om the .'endor

a d ,dI t.r to , e Pacer Pr ice eff ort at O:-ALC. C e''er aSother " t i at i es ier.; i s t i tu te d A FL-: i.,,i de . The v..er-e Pacer. E.:F, _b i .. La., 93-72, and the el imination of certain changes *o tre

-dt:me accounting methodology kjhich had been in Place s.=:ncelate F! 32.

P ac er si .. a s HO A F.C test pr- o.J c: t 'h i c h r. edu ,: ed te et ereshc; d -For. po-tir c ol e source --ol ici tatiors on thie bic ,.,

:5 1 .C00 to S2,500 . Posting sol ici tations on the bid bo.a.r-d1r, C e-=eEC CLT b.' i rcr-easi rg the oppor tun i ty for compet it on thus- :en di nc the time *i'. ' owed for -so' icz tat ion respon.e. This.

c eF _--dur.C provi ded ran oppor turi tv or interested contractors tobin: comc:,e t'. i or these iterns., 14:-)

Fu, I ic a E7- required the procur-iri a,:ti tv to delI-s ; I.:, a Sol Ic i t ak• cr0 u n t i , 15 di-vs a-f ter a Sy r c p s s o f 'he

,:;_ - i t i r, 4. F ubl i Thec in the Commerce Busiress Dai I . B*.. C-,-F; .J.. i t :ri i t r eq u i red that negot i at i or, s for- al la Z.rd of

C tr t cu i n c. t be i i n uri t i i 30 d i- - . t er the yn ops i S h : d- l 7llc .Shed inr the CE:D. Thin procedure vork'ed muc:r, l iv.e Pacer

id ir, th-t t a1 w1 lled rter-ested contrac,.tcrs, to com,7,et i t i,-e Ites. This .dded at least 15 d a s leadtime to k.' I

E . - e edir, $14000 ,(5:403-404)

The changes i ( e.ad " ime accounting methods parti ?I I v-,:-cun ted ±cr the drop in reported 1e.dt.urie dur ng the -st

., - -:- F'Y 32 b. not c-.un r ti nt eadtime or, certai, ta-s-k-, o.er

.-.- ,' the bu.Er h .o rn; con rol . The net effect .'.wa-s ar ar tifi'i -,t h ccp i the r te:,r, ted t adt me El i i at ion of the method,

* ,h-:- rer,-.ed the ar tifiil reductior, and ther efo;.e raised trie

-r t ed ;- LT.

acdi t Ior. t th ,e covernrrer, nt caued fBavtor- z -_tated abo--,-r- , ' ,:r.tra,:t-r . . so c u-ed iricreases in C:ALT. .r, ce the' J:f

", -tr tf -c be c,-: uifa, r business prac teies, the.. rooI Fr. , u : i. - r, e r proposal . The, v ,ad t ..io c c t .'es: t o

, Jr z , I et e .- i rig , -:urc-a c,,f the ,ropos.. ard to e :amTrr ez 1 b i I t' ' p- :_,eri t t i no a -..ierdor- tC u p I the p.r

t,- the e:.-' r, - men -. To ..ch i e'..e tr, ese C:.j ,c t i-es. he.r t .r tc - e tab d r-e., i p r -ce- wh ch essen-t-a--.

I: -,-,r-a r a t I r! the . u ote thr ouQr n M.or eve . of the*i ,a--,, ;:-, 1,;:2.'

I Zj

- 17

w -- -7-;

I-

The . r tor r.er! n 1ni to_- be di sci... ssed i s the m m c .t .," ne incresse.d emh .sis on com peti tio r, h,.ic octcurre a-tr a.

. soec 1 a =. .a.n! t e resu te s r m edi a at ter, ir. nor, .ar par rzt.. - tior; - .re.,'ic, us)'.' stated. tr;i. led to the rmsti,, 0.-

-n" ,Ae FTA4 ,.hi ch made some 15,?. r-ecommendati,ons for chanes in th e- FC r-ep Ier i.-hmen t spare par ts pr-ocess. :s tr. ee S e e:a te

.- ac c 'e,-I :.t S re e 1u I t ed i h: s :-;_. ontrae' t rotdur R- -

•. , a- ,z ers FLC dir c ted i mpl emer, t..t eon 0, rie -P . '-ecmen at i o. s . t a. I I A L C s by 15 Sep :. I nstitution._ i :In

r el:omrmerdaticons in the [irectorate of Competitior d,..t,or

a and th e I nec to:r ate on trct i n arid 'Manrufac tur. i no Q r .!:4S fr,-,-t .an iu ca nt cn-r, oe an contra. tino ,rc,edur-es :r, F.

F :3

e ompe t i - on advocates ch an ed cn t r ,: t rn , prcceiur e -i r:Ur i r, a1 P T 84 acaji si tion ons w,ere scr ee, t for- comp: eti t 'e

." . T i. me an t a ] PR-s ad t.o n t- rouoh t.h e ,F?orrc.,._r; zat 1 on be -or-e acqu is . t or, .ct ior coul d begin . Iar,,. PR._:.a r -,y i; the J,'rector.-ite of CZcrtra~tiq. -nd MParuf;acturinA.er E reca1 led ,,for this CR screeni no. hi meant the ,,e,,er ccnot ra.:e .. n a,.1a r d on the PR un ti * ret urned Iror CP thusi nr,:r e... n r, H:LT., 4 : 1) In iddi t ion * some of the sole source

r u .-. t i orn.s had beer! made on sirr, i - -i e d ;_, u rth as. 1=-i o -ar r angernen t stnt- h . C- d be arddin a minimum amount of time. Af terr e ' . these ... ranerren ts cou d nrot ,e used because the i t er ..n 3 n so:e source item. Therefor.e, a contract w.,.,hich t .,-.

r - I us! been a r-ded i r a s t te as 15 da,.vs. r)C0-... r qeou r-e, :d a ' to award. 4:2'

, .jmr: ' betk...een mid -" 8:3) a.nd the end of *'l, i: _ 7r eased t, o ,a'-. Rio. 3-1, D :ur. ir,,g t n is time, there

'- j. ,r,.ne ; n con tr-ac t i nog pr-oceour.e- I bu t t.., of te.a7. -

hte cn ane i r, adtime acco.un t I no p ocedures _i.r, :: ":"0 mpierrenta. tor! on i Hp- 84 - were directlI re3ated to nr,1r -E+nC

irpeti ,ion. From this it can be easily, seen that prcedurede ared to i nc r eas..e competition a r.e di r ect l vy r.el a t e trincreased CLT. C.orres s has choser toc; attempt to incr e as ecomrr!z.et-1.on by I egi sIatino a our eaucr, ati c change in con, tr. :ct1no

-.- c edures. nam e' :'v. PL 8--36,,.

%4

1-.

U:)

Chapter Four

I r-iR C:T OF L I C LiAJ .- 3:-. -

S1 s'.. o oncs

On 18 July 84, the President signed PL 98-369 into law. TheRk. w,,.,ill become effective on 1 April 85 and will impact the

acquisition activities of all branches of government. An extractfrom the law clearly states the intent of the new legislation.

-he law "...is designed to increase the use ofcompetition in Government contracting and to imposemor- e strincent restrictions on the awardi g ofnoncompetitive -- sole-source -- contracts. Agenciesare required to use competitive procedures.. ihether by-.oliciting sealed bids or requesting competitiveproposals, unless a statutory exception is met to usenoncompetitive procedures." (9:129)

The major changes in contracting procedures brought about byPL 98-369 are:

1. Determinations and findings are no longer required.2. The number of reasons allowing the issuance ofnoncompetitive contracts was reduced from 17 to 7.3. A competition advocate function is established.

* 4. A new procedure for protesting an acquisition actionto the General Accounting Office has been established.5. Contracting activities are permitted to exclude a

i . particular supplier if it would increase competition.6. The approval process for noncompetitive contracts haschanged sirgn ifica.n tl..

*I 7. The threshold at which contractors must certify theprice accuracy of their proposal has been lowered from

*500880to$1800.000.(9.3)

19

..: . - ' . " . - . . *8 ... ............... ,.. ... .....

ror con,.-'enience in discussing the :mcca t- -1t the Ia'.. ech anoes to eu ist i nr procedures w i be orou ped i nt tcn 7 9e

c. tecgor i es : those ,av..i ng no impact on CAL " t, ose ! h ' c ... ,ccc r ease _-"u j . and those which wi I incree C.LT M-os t , + -chanes .,.JI r ot impact C-.LT. The first our ,ane n s ted -

Sior e a in h his cat eqorv. Th e spec,:c 1 r..-onae - -a-,on c u on o.-Q. -;

1. Determin. ions and Findings artch t- C teadministrative task-- and onl. r ecji r-e a tet' mi r,, t,comol Iee. 'he exception to this are thcse D 'L Fs nt,require appro,-al b', the Secretary o+ the Air Force ordesigna red repr-esentati.,e. Since "FLC does '.e .-' r e,Secretarial D & Fs their impact or, CALT X =. Ieli -ie . "Therefor e the el imination of this tas o i ot i.rr-.z.aCPLT.2. A reduction in the number of circumstances ce i, ttinnoncompetitive acquisitions was accomplished in four .a..,none of ,hi-_h will impact CALT. First, some pre%...'iou-l.authorized exceptions to competition were combined thothers and not really eliminated. Second, one circumstancepermitting noncompetitive acquisition, exception reason :e.'not practical to obtain competition) was extensivel, usedby the ALCs. The use of this exception reason had airead.been severely curtailed by the competition ad,.ocates,therefore, no additional impact should occur. Third, -._meof the el iminated exceptions did not app l to H,contractinQ operations. Finally. three of the el rr, ir;.tecexcept ions w,,er e al most never used s rce the .y equ i r ed-approv.Al by the Secretary of the Air Force.(7:15-2 thru 15-8; 7: 12-17)3. Competition advocates have been ta.ing an active role i!"AFLC acquisitions since 15 September 83. The new lai add Fno new tasking which could further inpact AFLC CALT.'.4:1-4. The new GAO protest procedure wi l not impact -,eacquisition process until after a contract is atlarded, thu_=CALT is not affected.

Therefore, these changes ., il I not imcact CALT even though they"chanoe contractino procedures and are designed to inc-e.seco peti tion

The next category to discuss is that crange in conacti,1:pr oc edures ,, i ch could decrevs..e CALT. The exc I usi cr, of aparticular source to increase competition coul,d decrease C"_Tor v If the, E-cl IJed source ha-d -,lengthy. proos~. _a. cv-,c 1 e. F-re mpI e, _ , frt I c I ar con tr .c t or ray v I - j e fhre m,:r, - h t.

-i ep-r e a pr opc,,_ 1 4 c-r a n I t T, "'i ,,hL: t he h- e not - u creent lv. E.cludryq. them rom corpetition coald decre.se -ALT it

20. .-.

a ne,, bidder was more responsive in quoting.

The last three changes will increase CALT. As before, theratiorle for this statement follows:

5. One other outcome from eliminating a source could be anincrease in -ALT. This would occur if a simplifiedcon tractual arrangement existed with that source. Fore<ample. some large contractors have negotiated pre-pricedagreements ,.,ui th the government whi ch all ow contract aw.ardsin as little as one day. Excluding this contractor fromthe acquisition process for the items covered by theagreement woul d increase CALT because competi tiveproposals normally take 30 days.(5:404).- . Final l y, the new approval process will impactsgnificantly those acquisitions over $1 million. Althoughthe approval process begins at $100,000, the approval ofthose contracts under $1 million can be accomplished atthe ALC level . Actions which exceed $1 million willrequire HQ AFLC approval . This approval process isexpected to take approximately 14 days.(13:-)Those actionsexceeding $10 million require the approval of the UnderSecretary of the Air Force for Acquisition and Logistics'SAF/AL). Since this procedure is similar to secretarialapproval of Determinations and Findings, which takesapproximately six months, AFLC anticipates a 180 dayincrease in CALT for these contracts.(15:-)S. Lowering the threshold for submitting certified costand pricing data will increase the number of contracts.Wlhich must be audited by the Defense Contract Audit Agencybefore any negotiations on the acquisition can begin. Thisis part of the field pricing support process ,hichrequires 70 days to complete and directly impacts.CALT.( 14 :-)

. na lysis

T, quantify the impacts mentioned in the previous section,E e,..er a I facts must be known. How many total contracts areexpected to be awarded in the fiscal year, how many contractswill be? issued in the categories affected by the proceduralcranges, and how many days will each individual change add toCALT 0?

There are many ways to estimate the number of contracts tobe aw.arded in FY 85. Among the possible methods are: using the"afme number of contracts as in FY 84, using the same number. ofcontracts as in F r 84 plus or minus some fixed percentage forcharge, or using a trend line analysis. Of the possibletechniques, trend line analysis will generally produce a more

reli ble projection since it considers the past historical trendwhen making the projection. Therefore, this technique was used

21

- . -... .. - ,c -m

to make the proj ec t ions for FY 85. I n this. manner the numnoe, ,:,contracts expected to be awarded in FY 85 can be estimated ?t.....70 ,Fig. 4-1 . This is based on the historical data

oresented in Table 2-2 and assumes that the established trendu,.il! continue. This trend should continue in the short run sinceit r-eflects the continued emphasis on requirements consolidation

AWARDS

(000) 115

110 "

-so

85 ..

88

FY 82 83 84 85

SOURCE JO 41

Figure 4-1

Trend Line Prediction of FY 85 Contract Awards

Cornsol 1,dation impacts the contracting4 process in two ;A-ay,..

a rt0 it reduce: the number of contracts. i ssued since se,'er.l

ters .r r p1 _c,-ed or one c_n tr..kct. Sec--,nd it ircreases led, o .r ._Iue of the contract, resul tino in the contract be h:.a-ta.r ded 1-, 3 higher cvc le. Thus. as svicwAir ir Table 2-2. therehas been a steady reduction ir the number of contracts issuedand a steadv migration of contracts from the !o",er acquisitior,--. cles (4 and 5) to the higher acquisition c'vcles (6 and 8 .

20

""FLE efforts to consol id.treouLirements w.uere aided by Congress.itE AFLC .as f unded at a higher percentage of their stated sparepar ts r eouiremernts in the last tw.,o +is cal years. Fundingimar:.-'lemert aids consolidation by permittinrg on arge annual-couis, itior, of .r itemr rather than sever.el separete sr7v lleror, t raR:ts. This resu? t, in fe.,er, contracts being ai..arded for

hi gher a.' ,er ace dol 1 ar .. al u e and in h i gher acqu 1Sit 1 ,-cr,-. Il e 1i 1 : 16: 3. Thus. the trend I ine c-ro.jec tion of con tr.,: t

- to t:,e issued in F'i 85 is. considered val id.

One final step must be taken before the computation of CA-"impact car be accompl ishe,., since the 1 awmakers establishet

z_.ctions to be taken at dollar thresholds that did not coincideit h AFLC s acquisition c:vcles. For example, sole source-ACuIs, tions over t1e mil l ion require secretar i al approval,while AFLC's i.rgest acquisition cycle begins at $8 millior,.Therefore, data aggregated by acquisition cycle are not totallyuseful to determine the impact of the law. To determine theimpact of PL .8-369 the data must be reaggregated along the•=.ttutciry dollar. thresholds. This was accomplished by a specialinterrogation of the J0-41 Acquisition and Due-In System. The

. historical data gathered by these methods and a trend linec,r ojection for F"r 85 are shon.n in Table 4-I.

EO L LA RS FY P(F83 FY '4FY 85i

CONTRACTS(SOLE-SOURCE)

100P--50K 2 .669 2, 723 3, 273 3,492

IOOK-IM 2,421 4,653 4,516 5,958

iM"I- I 0M 256 575 509 699

O'.,er 10M 79 76 47 35

* ':.curce: JO-41 Interrogation (DAR -LOG-P1-J83-6 15)

TABLE 4-1

Reaggregation of AFLC Contract Award DataBy Dollar Value

23

- ..e . ,- ..

To compute the impact of the legislativ.e change, ;t snecessary to determine the number of contracts in each categor..mul tiply them by the anticipated increase in CALT, and fir, aldivi,%e the product by the total number of contracts issued. Hsmen tioned earlIer, only three charges could impact CALT: theesc lusion of a particular source. lowering the threshol d ,orcer. ti ied cost and pricing data, and the new approval process

S.For sole source acquisitions exceeding $1 mil 1 ton. The CALTimpact of excl udirig a. particular source is assumed to be'ec- IliqiblI for two reasons. First, excluding a particular sourcecar, increase or decrease CALT, depending or the circumstances oftre acquisition. Second, there are no oFLC data available toassess the impact of the change. However, the other two chanoes

Ill impact CALT. The formula for determining the impact and trecrmputation of that impact are as follows:

CALT=(Contracts)X(Leadtime)Total Contracts

Cal cul at ions

- 188K-588K 1 Million-18 Million Over 10 Million

' - 5.54= 3 492) X( 70) .222= (699)X(14) .1432= (35)X(18044.4110 44,110 44,110

One last operation must be performed on the derived CALTincrease. Since the law will not become effective until 1 pril'95, it will only affect those contracts initiated in the lastsi:: months of the fiscal year. Headquarters AFLC/PMXA historicalJO-41 data show that approximately 52.7 of the contractsa,,arded in all acquisition cycles are awarded between I Apriland 30 September each year. Therefore! the total number ofcontracts issued during FY 85 (83,700, Table 4-1) must bemultiplied by .527 to determine the number of contracts to beissued during the last half of FY 85. Thus! lowering thethreshold for submitting cost and pricing data from $500K to$i0OK will increase AFLC CALT by 5.54 days. A similar operationperformed on those sole source acquisitions over $1 million and110 m-il 1 ion yields a CALT impact of .222 and .143 daysrespectiv-'ely The impact of PL '28-369 on CALT is. nok,. clear. Allco n t racts awarded in the last half of c Fr 85 tt il 1 taVe enadditional 5.905 days to award. This analysis assumes that the

. teadtimes for al l contracts except thoe analyzed 1,il I remainS:cn s. t an t

This anal ysi.s is designed to determine the over] I C(ALTimoa,: t of PL 98-369. However, when con ii den ed in area- te

* terms, the effect of this law on i ndi,'siduel cycles is obsured.

24

. . . . .. ..

So

i-i. pre'..iously mentioned. approximately 507 of the doll ars spentir, FL; are on contract- over $5 million (Table 2-3)'. These areC the contracts most affected by the new law. The CALT on those

. contracts will increase by as. little as two wee.s to as much asSi m.nths.t 13:-, 15:-) This impairs AFLC s abilitv to suppnr.r tth users In the field by leaving a gap ir the logistic-pipel ine.

The gap will be most apparent on those actions exceeding $10ml l i ion since appro:imatelv 180 days will be added to theprocessing time for these actions. This means that the solesource justification process must start before the beginning ofthe fiscal year to permit contract award before the end of it.For example, at the the end of FY 84. it took an average of 238days to award a contract over $6 million. if the 188 days are* sdded to this time the approval process must beg i n 410 daysprior to the end of F 85. In other- words, the appro,.'al processshould have started in mid August 1984 to assure contract awardby the end of FY 85. This is almost impossible since initiation

-. of the acquisition process usually can't begin until the ALCreceives its Program Authority (PA)(money). This usually occursnear the beginning of the fiscal year.

Once the ALC receives its PA, it must begin the requirementsgeneration process to align requirements with the dollarsa.aiable to satisfy them. Ultimately, this process may take upto four months to generate a PR to buy the necessary parts. AFLCis attempting to make the process more responsive by upgradingthe current D8 41 arid D0-62 systems with the Requirements Uata'an... This should accelerate the requirements generation

process.(12:-)

The data presented and analyzed in this chapter have pointed,ou t the CALT impact of Public Law 98-369. It is apparent thatsome si.Lnificant conclusions can be drawn from this analyticalprocess.

25-0:Z5:.

Chapter Fi.e

C-- Ct-- C L IJ ' lr- S --. D RE C or-l-1 Er-I - I or-i s

Con 1 usi ons

The ourpose of this paper was to .-i a) .ze the cont .,tadmin istrative leadtime impact of Public Law 8-269. Tis I

I al .a &FLC to determine the dollar costs associated u.,i thSip ementir, this public law and to take the necessar- actionk,:

to minimize the impact of the new law.

This stud-. has showin tha.t PL '98-369 def ii 1 fv t.ix 1 I mpa. ... FLC CALT. Although it only adds approximatelv s2icx additionaldays to the process., i t must be remembered that each da of CALTha. an as..sociated dollar value of $6. 9 million dav.: I:- If the,MLT increase is mul tipl ied by the cost per nay, the resui t .

an additional $41 mi 1 1 ion are required to cover the r-esul t IlQpipeline costs.

The CALT impact of this law would have been much greater ifnurr:erous actions to increase competition had not previously. beertR.ken. Implementation of initiatives such as Pacer Price. PacerBid. PL 9- -. ompeti tion Advocacy, and the FtAGrecommendations have already resulted in the 41 day .Figure 3-1)increase in CALT (worth $282.9 mill ion) from mid FY 83 tnroch

the end of FY 84.

Although the aggregate leadtime impact of the law is not

e.: tremel large, aggregation tends to understate its impact :rindividual acquisition cycles. Of particular concern ,s thea j.ard of sole source contracts over $10 million, which kail 1 'eimpeded dr. amatica1 1 .. , While the la.., does not become effect i,-eijr t 1 I4pr. i 35. it is neces.sary to beci n the approval pr, oce sr, th,-, =.e t i cns immediately, if con tract a,.ar is to be m.ide

befcr e the clo, s.e .,f FY 85. In addition, those soe so-ur-cecor, tr ak.cts bet,,een $100 000 and $500 000 til.i I now,, require ±1ei dpricing supLor t. This .i I I add 70 davs proce=sin. time t':! the.. 492 contracts in that category. Final 1,.I al though the iinr,d e c L.i o n on apprca. level has not been made. the co, tractsI -oe4.,een, $I mill ion and $10 mill ic n til1 have acproximatel 14

d ,s pr,--ssi - n.i t im e added to them.

O .26

0 ... ..: .. -..- .: . .,. , -.',, , , :. . } : ... . : ,. . .. , .-.: .. ... .: ,: ..,.:: -- : ..- . ,. ,

7,e teripcr :r ,:4.p in the I oo i.cs Pipe e C ued ..- zIeUr 7.m t c n cr ese r, I eadtie r tho.e con tr c or $ 0 .

r7 2 2 ; tcc.2 IF the readi ne c F o u r o, c, t t i _

linE,3 ?: r mer, t De,-me,Ir , more ovb.i ou-. trer, c, c , r, de- tr c erS1.. - 'i I I on c I Ai F AFLC a,.,,ar-ds , T . e 2-3 ,.ter , ,,1 1 te

,n , ,tract. c c er 3 1r 0 *000 .8, o the t,t i ir -al e I-.'r _4. Cf t: ," 1 bi I ion, 75.2 .ere sole cce , e i- c. e

t..he- 1 cr eed a d t i e o are c 1 r ar a:u . t ,r _

t-.n =-I a.te-s to decreesed combat cap bi 1 i tv. It i.= e.=_sen t al t, .tP LC .4tt ern pt r el iminate the potenti. ; Qp by tina r,o,.. to

. he pr o bem.i .

ri cor:men d E. t or S

The "ur ucistics Centers need to act no,, to i dent ifi, thereur emen t. that could be affected by this public la. c e'sure r equ i remen t s over $10 rri l l ion must be immeniatel Vi.ntified to ber4ir the approval process. This is essern tial forrL:I t m, rr,. r tai n user su rOort.

The r.eiu - red appro,al time for- these sole source con tr .=-er $10 mi I 1 ion shou id be entered into the acquisition sy s tem

,",--41 ar, d D0-621 now .. This t,ii I I generate requiremen ,ts ear ierto coren, ste for. the increae in CALT.

The .dditiora1 I eadt i me for sole source action, be t,.,eer.*1 .... .t 50 0S0 0 C7u'st also be entered into t he ---4 1 and D;'-*2 _..te MS. Th .s wm.il I compensate for the additional 70 o.-oe-.t me required f1or f i eld pr-icin g support.

7-

ider, tifi:ation 0+ those requirements affected by PL 98-.A.< 6r not be easy; ,owever, identification of the recuir.emets.rid~~~~~ irrr tl -snta i no hnxmplcmenitI.on of these r-ecommenda t ;ons can help AFL -

7, riMI1e the ivontr,.act Administrative Leadtime impact of Public

270]

____ ___ ___ ___BIBLIOGRAPHY _ _ _ _ _ _ _ _

r r 7. .T i r. t terberc q a'' d ard otner-F arEu _

u- r, i r! e r oa ac e o rc e s. M a x' vj e AFE: 6 O . 1ACSC I_ 17 3 4*

-. eartmnrt o' the Air Force, H7 Air, F.:.-e Logixstic- 1 cTIMrn~-, t r -.. 1 c.- and -icqu 1,s tio 1c A c u , i t icr And EDue- I r S-~'; tern , K

e a i .~f W r- oh t k . SC -- .

r4, r tcr krir e OFFICE OF THE C OtPETITIONDL E F. FLC Ie' ai orn 23- 4 ? .r Vi-19h t- a t t er-s cr n - : DH 4 5_

%,- --

D c pa. r- tm re t .--+ the i-~i r For ce :HO~ Ai c rr gi t ci ; &Tmnsltir Hi jor-F:eld. DTRECTCI4mTE OF iOMFiETI i e'k

H AFL_ F'eBIBIa

mi - i ert t i S ororess commerc e Su si -s Da. I. r...Un, J . S, te , 5 te. Code Conore~sse.oral and -, mi, -tr t_ t. --e;, s ;-,3 t C on : r e =_ i.- r- st S e s si nr I8 lo I urr e I ' t P atu 1 it

'S . 'ac erne.,t S.S. Conr .ess. Sm 1 1 Bus-in-s Act. 15 USCUri ?,: Satates oc s Aotatec.. Pamphi et Number St .tPau M,:,He- s t u lb 1 1 sh i C Co . ., No 195;:3

._;04 AFL r .J t iepar tin ent o+ I e- ens .e r ra r-. , ces I

:. U S. neep rt r,.t n Dl tep ei Ioce e .. air c c o i.i:.P rrv r,.

,ijr r.iz a io Ano . .ationeal eOFautic and Spat-H r-"ET TI 1

F,,,_7 .r Tz. sFL ieu t o n3 9 PE-u tIght-F um ater. s,_r 1 4 B 5 a s .. ,

~4.

1- fi a. I D oc ji mer, t S

: ''

, - i o83

.5 r e Lr Fo L eF _r t- r og t - -r:.r F rn-i.; -. ,1 t on re - c - s e r -i n 1-'8, k .t. V !: .I C1

i

-- =f Pu l .ning '1- . S

______ CONTINUED_ _ _ _

U . ,ear tmen t of the 4i r Force: HO Uri ted Sttes Ai- For ceR. Irormati:r, Cuide t- Competition in Contracting Act

" CIC,) .-,+ 1984. i.iikshini-on O.C., 7 J .ul 84

10. (c.o. Robert E. and others. "Frocurement orkl oad ,..,ersus

4 +-;,:,rt ,:,rce--Ai '3rc,,'i rd Ir al.ance." Logistics Mtanagernent Institute,"_ 1981 I

Un pubIisned Material-s

0 :1. El A:'e=s. Thomas. H. II., GS-13, HO AAFLC/Pr.A, Writiht-F'tter -on

-FE;, OH 45433. Telephone Inter.,,'iew., 18 Jan 1985.

Bira, -::karl C.. GM-14. HO AFLC./PMXA. . right-Fatterson AF6, O-

'4543-3. Telephone Inter...'iei.., 18 Jan 1985.

I i-:. v,'.-'e, Forrest N. . Col . USAF. HO AFLC/ PM-i, Nright-Fattersor AFE,:,j 4543. Tel ephcone Inter...iew, 30 Jan 1985.

.arr, e s L. G'-13. HO AFLC/PMPF. r i gh t -F. t t er si "FB -

- - -54-73. Telechone Irterviev.., 25 Jan 1985.

S:5. _:teelv, Phillic, N., '1-14. HO AFLC/ PMPL, Wiright-Patterson HFE,

OH 454--;. Telephone Inter'...ie.,, 18 Jan 1985.

L. , ,e tr-r , c the "i Force. HO Air Force Loiistic.

-,m. r , PW . "AFLC Unpr i ,:ed Act ions Peport, FY84." Letter to AF.,P.)C.

* n,ri rht-Patter=-son AFE:, OH 4543:3, 19 No' .1984.

29

. i: :- .:. -:..-- .: :.,: :... - :. :..::.-:- .. . "-.: **::.,::. ..- . . .:. ; L .. . . ... . . .: ":, . .,

FILMED 2

* 8-85

* DTIC