Assignment 2: Week 2: Paper 2
Annakay Charles
DEFM 531: Advanced Business Solutions for Mission Support
Dr. Emmet Fritch
April 14, 2024.
Addressing Acquisition
Rules governing contracts and acquisitions have been in place since shortly after the
establishment of the United States in 1795. Before this time, individuals had to personally
finance the procurement of materials and resources for government use. Without established
quality standards or oversight, the government had no assurance of the products it was receiving
prior to delivery and payment. The Purveyor of Public Affairs Act of 1795 marked the first
legislative step taken by the fledgling American government regarding contracts and purchases,
enabling it to begin acquiring necessary equipment and supplies. This act established the
Purveyor of Public Supplies office within the U.S. Treasury, overseen by the Secretary of the
Treasury, tasked with sourcing and delivering food, clothing, services, and weapons for the
American Military.
One of the articles that addresses the issues in acquisition is “Economic Incentives and
the Defense Procurement Process” by Rogerson (1994). This article outlines how economic
theory, specifically focusing on incentives, can inform the analysis of defense procurement
policy. It discusses the inherent incentive challenges that influence defense procurement,
evaluates how existing institutions impact the behavior of involved parties, and explores
potential pathways for enhancing the procurement process by addressing these complex
incentive issues. The article considers incentive issues both in the relationship between the
government and defense firms and within the government itself. Rogerson (1994) also discusses
government procurement procedures have evolved to meet the changing needs of the government
and the world. The Federal Acquisition Streamlining Act of 1994 marked a significant milestone
in this evolution. Signed into law by President Clinton on October 13, 1994, this act streamlined
the procurement process. The subsequent implementation of the Federal Acquisitions Computer
Network (FACNET) on July 3, 1995, further enhanced the efficiency of procurement operations
(Federal Acquisition Computer Network.). FASA expanded contractors' ability to adapt practices
from other Federal Acquisition Regulation (FAR) provisions. Notably, it allowed the
government to consider best-value offers rather than automatically awarding contracts to the
lowest bidder. Additionally, contractors now face contract termination if they fail to achieve at
least 90% of their performance goals. Following FASA, the Federal Acquisition Reform Act
(FARA), also known as the Clinger-Cohen Act of 1996, introduced further revisions to
acquisition laws (2.2 Clinger Cohen Act, 1996). FARA aimed to improve the procurement
process by promoting effective competition, refining approval processes, and enhancing
competitive range determinations. Competitive acquisitions under FARA must comply with FAR
standards to ensure full and open competition. Furthermore, efficient approval processes have
raised thresholds for noncompetitive contracts requiring approval by higher headquarters.
From the article, we learn that contracting officers now have the authority to limit the
number of competitive bids through effective competitive range decisions. Consequently, the
criteria for determining the competitive range have shifted towards favoring highly rated bids
over those with only a moderate chance of success. The overarching goal of FARA reforms is to
establish full and open competition that fulfills the US government's requirements and promotes
excellence in competitive endeavors. This grants contracting officers greater discretion and
authority to navigate between competing mandates. Additionally, they have the flexibility to opt
for companies they have previously accepted bids from rather than selecting a new or potentially
more cost-efficient option.
References
2.2 Clinger Cohen Act (1996). CIO.GOV. (n.d.). Retrieved April 13, 2024, from
https://www.cio.gov/handbook/it-laws/clinger-cohen-act/
Federal Acquisition Computer Network. The IT Law Wiki. (n.d.). Retrieved April 13, 2024, from
https://itlaw.fandom.com/wiki/Federal_Acquisition_Computer_Network
Rogerson. (1994). Economic Incentives and the Defense Procurement Process. The Journal of
Economic Perspectives, 8(4), 65–90. https://doi.org/10.1257/jep.8.4.65