APM 2008-03: Annual Competition Advocate Report and Documenting Noncompetitive Acquisitions
ACQUISITION POLICY MEMORANDUM NO. 2008 – 03
To: Heads of Contracting Activity
From: Martin J. Brown /s/
Senior Procurement Executive
Subject: Annual Competition Advocate Report and Documenting Noncompetitive Acquisitions
Effective Date: October 1, 2008
1. Purpose: This memorandum (a) revises the HHS Annual Competition Advocate Report (CAR) template and its completion instructions (Attachment A) and (b) promulgates interim acquisition guidance [pending incorporation in the HHS Acquisition Regulation (HHSAR)] for documenting noncompetitive acquisitions exceeding the micro-purchase threshold (Attachment B). The interim acquisition guidance includes a standard template for use when preparing a Justification for Other than Full and Open Competition (JOFOC) (Attachment C) and a Limited Source Justification (LSJ) (Attachment D), as applicable, for noncompetitive acquisitions exceeding the simplified acquisition threshold.
2. Background: To strengthen efforts to maximize competition, HHS developed a standard reporting template for the Annual CAR in 2007. Based on experience with the template, and to ensure consistency with the July 18, 2008 memorandum from the Administrator, Office of Federal Procurement Policy (OFPP), on Effective Practices for Enhancing Competition, HHS is providing an updated CAR template. In addition, HHS is amplifying documentation requirements for noncompetitive acquisitions and establishing standard templates for preparing JOFOCs and LSJs.
3. Applicability: The revised CAR requirements apply to the Departmental Competition Advocate and the Operating Division (OPDIV) Competition Advocates, and should be used for the fiscal year 2008 reporting cycle (and beyond). The noncompetitive acquisition documentation requirements, including use of the standard templates, apply to all HHS requiring offices and contracting activities.
4. Preparation of the Annual Competition Advocate Report: The HHS CAR template and its completion instructions have been revised from those used in 2007 to: (a) add a requirement for an executive summary to the OPDIV and HHS Annual Competition Advocate reports (see Section A, Executive Summary and Competition Summary Data, paragraph A-1, of the template); and (b) make changes consistent with the OFPP competition guidance. These latter changes include the following requirements:
i. Providing a trend analysis, which was previously optional (see Section E, Additional Information/Data, of the template).
ii. Identifying specific actions taken in conjunction with the Operating Division (OPDIV) Small Business Specialist to ensure that maximum prime and subcontract opportunities are provided to small and disadvantaged businesses (see Section B, Actions Taken During the Reporting Period, paragraph B-5; and Section C, New Initiatives for Future Reporting Periods, paragraph C-6 of the template); and
iii. Using incentive or awards programs to motivate acquisition and program staff and others to foster competition, or nominating exceptional employees or teams for awards associated with OFPP’s Shine Initiative (see Section D, Recommendations, paragraph D-2, of the template).
5. Documenting Noncompetitive Acquisitions: The Federal Acquisition Regulation (FAR) requires that proposed noncompetitive acquisitions exceeding the current micro-purchase threshold of $3,000 be justified. The type and level of detail of the justification should be commensurate with the estimated dollar value of the intended award. Regardless of the dollar value of an acquisition and the acquisition method to be used, sole-source acquisitions, or those which limit the number of sources considered, cannot be justified on the basis of lack of advance planning by the sponsoring organization or concerns related to the availability of funds (e.g., fiscal year funds will expire).
6. Documentation Requirements for Noncompetitive Acquisitions Exceeding $100,000 (the current simplified acquisition threshold): The FAR requires that a JOFOC or an LSJ be prepared and approved when an acquisition expected to exceed the simplified acquisition threshold, inclusive of options, is intended to be awarded on a sole-source or limited-competition basis.
The use of a JOFOC or LSJ depends on the acquisition method to be used. Accordingly, the Project Officer (PO) should consult with the cognizant Contracting Officer (CO) as early as possible to determine the appropriate acquisition method for a specific requirement and, therefore, whether a JOFOC or LSJ is the appropriate support document. The PO shall provide the JOFOC or LSJ as an attachment to the Acquisition Plan (AP) [see HHSAR 307.7101(a)] or other acquisition request document [see HHSAR 307.7101(c)].
i. A JOFOC shall be used when the intended acquisition is sole source or a limited number of sources will be solicited; AND the award will not be placed with an organization under a General Services Administration (GSA) Federal Supply Schedule (FSS) contract (see FAR 6.303-1 and HHS Acquisition Regulation (HHSAR) 306.303). FAR 6.303-2 specifies the minimum JOFOC content requirements, which are reflected in the JOFOC template (see paragraph 7 below), including those for sole-source acquisitions conducted under the authority of the test program for commercial items (section 4202 of the Clinger-Cohen Act of 1996) or the authority of the Services Acquisition Reform Act of 2003 (41 U.S.C. 428a) [see FAR 13.501(a)(1)(ii)].
ii. An LSJ shall be used when fewer than three FSS contractors will be solicited – e.g., when only one source is capable of performing the requirement or the item to be acquired is peculiar to one manufacturer; AND the award will be placed with an organization under a GSA FSS contract (see FAR 8.405-1, 8.405-2, 8.405-6(a) and (b) and HHSAR 308.405-6). FAR 8.405-6(g)(2) specifies the minimum LSJ content requirements, which are reflected in the LSJ template (see paragraph 7 below).
7. Use of the JOFOC and LSJ Templates: OPDIVs shall prepare JOFOCs and LSJs using the standard HHS template and each template’s completion instructions. The JOFOC and LSJ templates are provided in Attachments C and D of this interim acquisition guidance and can be accessed at http://www.hhs.gov/asfr/ogapa/acquisition/policies/worktool.html#AquisitionTemplates.
8. Documentation Requirements for Noncompetitive Acquisitions Exceeding $3,000 (the current micro-purchase threshold) But Not Exceeding $100,000: If a sole-source or noncompetitive acquisition is expected to exceed the micro-purchase threshold, but be equal to or less than the simplified acquisition threshold, less formal means of documentation may be used in lieu of a JOFOC or LSJ (e.g., a memorandum, other form of transmittal, or supporting narrative on a requisition) in accordance with OPDIV procedures, to document the absence or limiting of competition.
The level of detail should be commensurate with the dollar amount and complexity of the acquisition; however, the document must specify the circumstances (such as technical continuity, urgency, exclusive licensing agreements, etc.) and provide the rationale as to why only one, or a limited number of sources, is available to satisfy the requirement. OPDIVs should use the content requirements of the JOFOC and LSJ templates as a reference in determining what other information and documentation is necessary to support an intended acquisition. Alternatively, OPDIVs may prescribe use of a JOFOC or LSJ for certain acquisitions equal to or less than the simplified acquisition threshold.
9. Changes to the HHSAR: The interim acquisition guidance in Attachment B makes no change to HHSAR 306.502, Duties and Responsibilities, with respect to preparation of the CAR. However, the HHSAR is modified, as follows, as the result of establishing documentation standards and requirements for noncompetitive acquisitions:
i. HHSAR 306.303, Justifications: This section clarifies the content requirements for a JOFOC and specifies the use of a standard JOFOC format (template). It also summarizes the interaction that should occur between the CO and PO following receipt of a JOFOC, including resolving outstanding issues and identifying other sources and market research strategies.
ii. HHSAR 306.304, Approval of the Justification: This section adds a new subparagraph, (a)(1), on JOFOC approval requirements and indicates that the CO shall exercise approval authority for JOFOCs over $100,000 but not exceeding $550,000 unless a higher approval level is required by OPDIV policies.
iii. HHSAR Part 308, Required Sources of Supplies and Services: This change adds Part 308 – Required Sources of Supplies and Services, to add a section, 308.405-6, Limited sources justification and approval, dealing with the preparation and approval of LSJs for acquisitions awarded under the GSA multiple award schedule program and the use of a standard format (template). It also adds a subparagraph, (h), on approval requirements and indicates that the CO shall exercise approval authority for LSJs over $100,000 but not exceeding $550,000 unless a higher approval level is required by OPDIV policies.
iv. HHSAR Part 313 – Simplified Acquisition Procedures: This part includes a new section, 313.501, Special documentation requirements, dealing with the preparation and approval of JOFOCs for acquisitions awarded under the test program for certain commercial requirements. It also adds a subparagraph (2) on approval requirements and indicates that the CO shall exercise approval authority for JOFOCs over $100,000 but not exceeding $550,000 unless a higher approval level is required by OPDIV policies.
cc: OPDIV Competition Advocates