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Assignment 2 Simplified Acquisition Procedures




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Bus 505
Assignment 2 Simplified Acquisition Procedures
BUS 501- Government Acquisition
31 October 2012
Simplified Acquisition
The federal government has three different methods for acquiring goods
or services, which include, negotiations, sealed bids, and simplified
acquisitions. Simplified acquisition procedures are methods sited in the
Federal Acquisition Regulations (FAR) Part 13 for purchasing goods and
services under a certain dollar threshold. In October 1994, the FAR
established the Federal Acquisition Streamline Act (FASA) as a
simplified means for the government to acquire goods and services.
Simplified acquisition was created into the government procurement
process to streamline the contracting process through the elimination of
certain rules and actions, and allowing a relatively low administrative
cost associated with procurement and provides the easiest form of
federal contracts to small business and disadvantage businesses.
Agencies are instructed to use simplified acquisition procedures for all
purchases of supplies or services below the threshold of $5 million.
Whenever the government seeks to obtain goods or services between
the amount of $2,500 and $100,000 the agency can usually set aside
these acquisitions for small businesses if there are at least three
competitive offers. Simplified acquisition between $2,500 and $25,000
can obtain either an oral or written quotations from businesses in an
effort to promote competition. For contracts over $25,000, an oral
quotation may not be realistic; therefore the use of electronic commerce
would be used. Purchases under $2,500 are considered “micro-
purchases” and do not need to go through a formal solicitation process.
As long as the contracting official thinks the price is fair a government
commercial purchase card (GPC) can be used.
Purchase Orders, Blanket Purchase Agreements, and Government
Purchase Cards

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Within the area of simplified acquisition, there are different methods
used to acquire goods or services, to include: Purchase Orders, Blanket
Purchase Agreements, and Government Purchase Cards. These are
agreements, not contracts, do not bind the government and are used to
make orders for small quantities of goods or services. The first of the
methods is the Purchase Order. The Purchase Order is the primary
method of simplified acquisition procedure in which is used on a fixed
price basis is issued by the government as a means to buy supplies or
services, including construction and research and development.
Secondly, there are Blanket Purchase Agreements, which further
streamlined the simplified acquisition process by basically becoming a
“charge card” to make repetitive purchases from a seller over a set
period of time. According to Alpert (2011), the use of blanket purchase
agreements reduces administrative costs and paperwork and allow for
speedy transactions. The use of the blanket purchase agreement often
allows agencies to qualify for discounts and further as a result of the
volume that may be generated as a result of the agreement.
The last method is the Government Purchase Card that was mentioned
above. The Government Purchase Card can be used for making or
paying for purchases of supplies services or construction authorized by
law. These purchases must be considered “micro-purchases” and must
be $2,500 or less. These purchases do not require provisions or clauses,
except for central contractor registration and sometimes in reference to
the Electronic Funds Transfer (Straight, 2004).
Simplified Acquisition Test Program
In 1994, Congress approved the use of simplified acquisition procedures
for procurements that did not surpass the threshold of $100,000 in order
to streamline the procurement process. By 1996, Congress increased
the use of the simplified acquisition procedures to allow the purchase of
commercial items that did not exceed $5 million in an effort to capitalize
on efficiency and diminish administrative costs associated with procuring
goods and services. In an attempt to measure the degree to which
federal agencies used the test program, benefits added through its use
and the impact the program had on contract competition, Congressed
directed the Government Accountability Office (GAO) to analyze test
program data from the Federal Procurement Data System (FPDS) and
DoD’s Defense Contract Action Data System (DCADS). The test
program was planed to end on 01 January 2004, but it was discovered

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after a DoD evaluation in 2001, that data had not been collected to
effectively measure the results of the commercial purchases.
Discrepancies were discovered in both the FPDS and DCAD’s that
overstated or understated program information by millions of dollars.
Case in point, the Department of Treasury U.S. Mint officials told the
GAO that even though they had approximately $242 million in test
program contract actions, they did not use the program, which caused
an a overstatement in the programs report. Similarly, the Defense
Logistics Agency stated that they had about $146 million in test program
contracts when in fact the FPDS’s data showed only $4 million causing
an understatement. Also, the Department of Justice officials stated they
had approximately $118 million in test contracts but when further
examined none of the contracts listed were apart of the test program. In
the end there were so many discrepancies and inconsistencies of
purchase information, the GAO concluded that there was no reliable
information to test the benefits of the simplified acquisition system
(United States Government Accountability Office, 2003)
Based on the information the GAO collected from their audit, they
advised that the Department of Defense work with the Administrator of
the Office of Federal Procurement Policy (OFPP) to develop an
evaluation system for measuring test program advantages. Also, the
recommended that the three offices surveyed (Treasury, Defense and
Justice) should ensure the reliability of the FPDS test program data by
either capturing the correct data or in fact actually using the program.
This is a fair assessment taking into consideration the multitude of
inconsistencies involved with FPDS.
For the program to work more efficiently, there has be more accuracy in
the reports that are given by the participating agencies. Just pulling from
the above example, the Defense Logistics Agency understated the
amount of their total obligations by $142 million. Developing a process to
capture the program’s effectiveness, without disturbing the contract
competition would be a model way for the agencies involved in the test
program. What seems to have been the program’s demise is the lack of
properly defined procedures on how an organization should record and
analyze their procurement information. By have specified records, more
accurate measures of the simplified acquisition process performance
can be noted.

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Very useful material for studying!