are assigned responsibilities for procurement and distribution management of commodities within DOD and in coordination with GSA. • Military Construction Programs. The Corps of Engineers and the Naval Facilities Engineering Command procure construction services. • Military Airlift Command (MAC). This command provides military and contract air movement services, including operation of air terminals. • Military Traffic Management and Terminal Service (MTMTS). This service is the DOD single-manager for military traffic, transportation, and common-user ocean terminals. • Military Sealift Command (MSC). This command provides ocean shipping services using fleet and commercial shipping. • Defense Communications Agency (DCA). This agency procures commercial communication services for DOD activities. • Defense Contract Administration Services (DCAS). This activity provides field contract Figure 3 administration service, including production monitoring, quality assurance, pricing, and Government property management for DOD and other Federal agencies. • Weapon System Acquisition Management Assignments. An executive agent is designated to manage a joint program for acquisition of systems that have a high degree of interservice commonality and are produced concurrently in one industrial facility. • Buy United States Here (BUSH). This Air Force managed program provides Federal activities in Europe and Asia with indefinite delivery contracts covering U.S. manufactured products distributed through commercial overseas outlets. SPECIAL PROCUREMENT PROGRAMS • United States Postal Service (USPS). This service purchases mail boxes and other mailrelated supplies for Federal agencies. • Tennessee Valley Authority (TVA) and other Federal utility activities. These activities provide electric power to Federal agencies. • Veterans Administration (VA). This administration purchases drugs and special medical-care equipment for Federal agencies. • Government Printing Office (GPO). This office provides contract printing services to all agencies through field contract printing offices. • Federal Prison Industries, Inc. (FPI). This organization provides prison-made supplies and services to all agencies directly or through GSA. • National Industries for the Blind. This activity provides blind-made products to all agencies directly or through GSA. • Small Business Administration (SBA). This administration negotiates some contracts with minority businesses on behalf of other Federal agencies. • Local Call Contracts. FPR provides for interagency coordination in execution and use of indefinite delivery contracts for supplies and services required by operating activities at station level. CHAPTER 3 Requirements The economy and effectiveness of the Government's acquisition system depends not only on how well it serves the Government at large but also on how well it supports the individual user. This chapter focuses on such user concerns as defining and communicating needs, responsiveness, Government specifications, and product quality. USER'S NEEDS AND SATISFACTION Effective acquisition requires the clearest possible communication between the user and the local representative of the Government's acquisition system. From the outset, it is essential that the full context of the user's need be clearly understood. The absence of such understanding often increases the total cost of procurement and inhibits the ability of the user to perform effectively. The basic purpose of the procurement system is to provide the user with required goods, services, and facilities in the most efficient and economical way possible, yet the system sometimes makes it difficult for the user to satisfy his needs. The procurement system may impose mandatory sources of supply and specifications, directed procurement methods, and other restrictive procedures. Exceptions require extensive documentation; however, nothing in the system prevents a user from ultimately obtaining what is needed to accomplish an authorized mission. Decisions of the Comptroller General have repeatedly upheld the right of Federal agencies to: The cost of and time spent on communicating a description of needs must be considered in the evaluation of any procurement system. The failure to communicate needs effectively causes serious problems, including a significant increase in the total cost of procurement. Procurement offices not co-located with the user normally require formal procedures for the communication of requirements. In theory, these formal procedures define the need precisely and result in procurement of the required goods. However, in practice: • Costs tend to increase the farther away the procuring office is from the using activity. Any acquisition system that relies on formal specifications will trail the development of commercial products. • As paperwork proceeds up the organizational structure, many levels review and may "improve or simplify" the users' requirements. This often results in delivery of a product that differs from that required. The most common complaint in this area concerns substitution of brand-name items. 1 Decisions of the Acting Comptroller General, 17:554-560, Jan. 8, 1938. * Letter from the U.S. Comptroller General, B-157053, to James F. Gardner, Aug. 2, 1965. Letter from the U.S. Comptroller General, B-169140, to the Secretary of the Navy, July 8, 1970. Dissatisfaction with the substitute is sometimes so strong that it is returned in its original carton and never used. This usually means that the user is forced to find an alternative means for fulfilling the original need. • Formal statements of requirements tend to become cluttered with protective and explanatory clauses that do not provide an adequate basis for intelligent bidding. Many users are concerned because distant procurement staffs often fail to consider cost to the point of use (delivered or landed cost). Both costs and effectiveness can be affected by the user's location and the method of delivery, especially if the user must prepare the item for end use or actually deliver it to the point of use. For example: • One using activity indicated that the rail siding to which plywood was shipped was more than ten miles away. This resulted in additional costs because the user had to obtain a truck and crew to unload and deliver the plywood to the point of use. • Users believe the freight costs exceed the cost of the item on many items shipped from distant depots. • Many users expressed the opinion that, if the total costs of central agency or interagency support were known, local commercial outlets for certain services or products would prove to be more cost-effective. Users expressed concern that staff-level personnel often fail to consider the rising cost of labor for certain services, particularly in repair and maintenance activities. For example, labor cost is a major portion of the total cost of most paint jobs. Attempts to save on the cost of paint can result in more frequent repainting and less productivity. This relationship of labor to supplies generally applies to the entire field of maintenance. Ordering simplicity is an important factor in satisfying user needs, particularly when the product does not carry a Federal Stock Number (FSN) or does not have a purchase description developed by design engineers. Most users know what they need and can easily communicate a requirement to a colleague but experience difficulty in describing it to the procurement community. These difficulties can be time-con suming and costly, and failure to communicate fully can result in delays and inappropriate procurements. Clear and direct communication with as few steps as possible saves time and money. Such communication places the user's need in perspective and oftentimes sharply reduces the time and money spent on processing the user's requisition. When requisitioning and procurement routines are overly formal and rigid, the cost of a procurement, particularly a small purchase, can become excessive. For example: ' • Instead of purchasing a $17 identical replacement motor from a local vendor, a lower priced "equivalent" was purchased through competition. Replacement time for the "equivalent" was 21/2 hours whereas the exact replacement could have been installed in 15 minutes. When one considers today's labor costs for mechanics at $6 an hour, the extra cost becomes apparent. The supply personnel in a major using activity were frustrated in their attempts to identify nonstock-listed items or items for which stock numbers were not identified. Another example involved an automotive maintenance shop. The unbelievable sequence of steps used in purchasing repair parts was as follows: • Because he was unaware of certain part numbers and prices required to fill out requisition sheets, the automotive shop stockman called a local Ford agency to get this information. • The purchase request was prepared from the handwritten requisition and sent to the local purchasing office. • The purchase request went to a small purchase buyer who called three Ford agencies to get competitive quotes. The small purchase buyer advised the lowest offeror of the award and dictated a memorandum of the order. • The supplier delivered the items to the automotive repair shop. These formal procedures also caused excessive prices to be paid for parts. Although the Study Group 13A (Commercial Products), Final Report, Feb. 1972, vol. I, p. 179. |