[Federal Register Volume 60, Number 13 (Friday, January 20, 1995)]
[Notices]
[Pages 4205-4206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1397]



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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy


Federal Acquisition Regulation (FAR) REWRITE

AGENCY: Office of Federal Procurement Policy, Office of Management and 
Budget.

ACTION: Notice of Core Guiding Principles for the Federal Acquisition 
System.

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SUMMARY: The Board of Directors for the FAR Rewrite Project finalizes 
the core guiding principles for the federal acquisition system.

DATES: Effective January 20, 1995.

FOR FURTHER INFORMATION CONTACT: Susan E. Alesi, Special Assistant for 
Regulations, Office of Federal Procurement Policy, 202-395-6803.

SUPPLEMENTARY INFORMATION: On September 7, 1993, the Vice President 
released the report of the National Performance Review (NPR) which, 
among other things, requires the Administration to simplify the 
procurement process through reform of the federal acquisition 
regulatory system. In response to the report, Steve Kelman, the 
Administrator for Federal Procurement Policy, established a Board of 
Directors, comprised of senior level individuals from the Executive 
Branch, to develop a plan for regulatory reform.
    As a first step the Board decided to formulate a set of core 
guiding principles intended as a vision statement for the federal 
acquisition system. The Board also decided to supplement the basic 
principles with accompanying discussion and performance standards for 
the system.
    The first drafts of principles (59 FR 26772 and 59 FR 52844) drew 
on the concepts espoused by the NPR and what the Board considered to be 
good business practices such as greater reliance on the good sense and 
business judgment of the procurement workforce; satisfying the needs of 
the customer; reducing unnecessary layers of review; emphasizing the 
importance of timeliness in the procurement process; and an orientation 
to best value judgments in making contract awards.
    The final version of the principles clarifies the principles set 
forth in the first draft and includes an additional concept, suggested 
through the public comment process, which the Board believes would 
significantly increase the opportunity for innovation in procurement. 
Thus, the revised set of principles make it clear that if a policy is 
not specifically addressed in the FAR, Government members of the 
acquisition team should not assume that it is prohibited.
    It is intended that the core principles be used in a twofold 
manner; first, they will be issued in the preface to the FAR not only 
as a statement of the goals of the system but also to guide future 
changes to the FAR; and second, they will be used by the drafting teams 
in the actual rewrite of the FAR.
    We encourage agencies to make this statement of core guiding 
principles available to program customers and contractors, and to make 
the core principles a part of the basic training materials provided to 
all personnel involved in the acquisition process.

Statement of Guiding Principles Federal Acquisition System

    The vision for the Federal Acquisition System is to deliver on a 
timely basis the best value product or service to the customer, while 
maintaining the public's trust and fulfilling public policy objectives. 
Participants in the acquisition process should work together as a team 
and should be empowered to make decisions within their area of 
responsibility.
    The Federal Acquisition System will:
    * satisfy the customer in terms of cost, quality, and timeliness of 
the delivered product or service, by, for example,
    ** maximizing the use of commercial products and services,
    ** using contractors with a track record of successful past 
performance or who demonstrate a current superior ability to perform, 
and
    ** promoting competition;
    * minimize administrative operating costs;
    * conduct business with integrity, fairness, and openness; and
    * fulfill public policy objectives.
    The Acquisition Team consists of all participants in Government 
acquisition including not only representatives of the technical, supply 
and procurement communities but also the customers they serve, and the 
contractors who provide the products and services.
    The role of each member of the Acquisition Team is to exercise 
personal initiative and sound business judgment in providing the best 
value product or service to meet the customer's needs. In exercising 
initiative, Government members of the Acquisition Team may assume that 
if a specific strategy, practice, policy or procedure is in the best 
interests of the Government and is not addressed in the FAR, nor 
prohibited by law (statute or case law), Executive Order or other 
regulation, that the strategy, practice, policy or procedure is a 
permissible exercise of authority.

Discussion

Introduction

    The Statement of Acquisition Guiding Principles for the Federal 
Acquisition System (System) represents a concise statement designed to 
be user-friendly for all participants in Government acquisition. The 
following discussion of the principles is provided in order to 
illuminate the meaning of the terms and phrases used. The framework for 
the System includes the Guiding Principles for the System and the 
supporting policies and procedures in the Federal Acquisition 
Regulation (FAR).

Vision

    All participants in the System are responsible for making 
acquisition decisions that deliver the best value product or service to 
the customer. Best value must be viewed from a broad perspective and is 
achieved by balancing the many competing interests in the System. The 
result is a system which works better and costs less.

Performance Standards

 Satisfy the Customer in Terms of Cost, Quality, and Timeliness 
of the Delivered Product or Service
    The principle customers for the product or service provided by the 
System are the users and line managers, acting on behalf of the 
American taxpayer.
    The System must be responsive and adaptive to customer needs, 
concerns, and feedback. Implementation of acquisition policies and 
procedures, as well as consideration of timeliness, quality, and cost 
throughout the process, must take into account the perspective of the 
user of the product or service.
    When selecting contractors to provide products or perform services, 
the government will use contractors who have a track record of 
successful past performance or who demonstrate a current superior 
ability to perform.
    The government must not hesitate to communicate with the commercial 
sector as early as possible in the acquisition cycle to help the 
[[Page 4206]] government determine the capabilities available in the 
commercial marketplace. The government will maximize its use of 
commercial products and services in meeting Government requirements.
    It is the policy of the System to promote competition in the 
acquisition process.
    The System must perform in a timely, high quality, and cost-
effective manner.
    All members of the Team are required to employ planning as an 
integral part of the overall process of acquiring products or services. 
Although advance planning is required, each member of the Team must be 
flexible in order to accommodate changing or unforeseen mission needs. 
Planning is a tool for the accomplishment of tasks, and application of 
its discipline should be commensurate with the size and nature of a 
given task.
 Minimize Administrative Operating Costs
    In order to ensure that maximum efficiency is obtained, rules, 
regulations, and policies should be promulgated only when their 
benefits clearly exceed the costs of their development, implementation, 
administration, and enforcement. This applies to internal 
administrative processes, including reviews, and to rules and 
procedures applied to the contractor community.
    The System must provide uniformity where it contributes to 
efficiency or where fairness or predictability is essential. The System 
should also, however, encourage innovation, and local adaptation where 
uniformity is not essential.
 Conduct Business With Integrity, Fairness, and Openness
    An essential consideration in every aspect of the System is 
maintaining the public's trust. Not only must the System have 
integrity, but the actions of each member of the Team must reflect 
integrity, fairness and openness. The foundation of integrity within 
the System is a competent, experienced, and well-trained, professional 
workforce. Accordingly, each member of the Team is responsible and 
accountable for the wise use of public resources as well as acting in a 
manner which maintains the public's trust. Fairness and openness 
require open communication among team members, internal and external 
customers, and the public.
    To achieve efficient operations, the System must shift its focus 
from ``risk avoidance'' to one of ``risk management.'' The cost to the 
taxpayer of attempting to eliminate all risk is prohibitive. The 
Executive Branch will accept and manage the risk associated with 
empowering local procurement officials to take independent action based 
on their professional judgment.
 Fulfill Public Policy Objectives
    The System must support the attainment of public policy goals 
adopted by the Congress and the President. In attaining these goals, 
and in its overall operations, the process shall ensure the efficient 
use of public resources.

Acquisition Team

    The purpose of defining the Federal Acquisition Team (Team) in the 
Acquisition Guiding Principles is to ensure that participants in the 
System are identified--beginning with the customer and ending with the 
contractor of the product or service. By identifying the team members 
in this manner, teamwork, unity of purpose and open communication among 
the members of the Team in sharing the vision and achieving the goal of 
the System are encouraged. Individual team members will participate in 
the acquisition process at the appropriate time.

Role of the Acquisition Team

    Government members of the Team must be empowered to make 
acquisition decisions within their areas of responsibility, including 
selection, negotiation, and administration of contracts consistent with 
the Guiding Principles. In particular, the Contracting Officer must 
have the authority, to the maximum extent practicable and consistent 
with law, to determine the application of rules, regulations, and 
policies, o a specific contract.
    The authority to make decisions and the accountability for the 
decisions made will be delegated to the lowest level within the System, 
consistent with law.
    The Team must be prepared to perform the functions and duties 
assigned. The government is committed to provide training, professional 
development, and other resources necessary for maintaining and 
improving the knowledge, skills, and abilities for all Government 
participants on the Team, both with regard to their particular area of 
responsibility within the System, and their respective role as a team 
member. The contractor community is encouraged to do likewise.
    The System will foster cooperative relationships between the 
government and its contractors consistent with its overriding 
responsibility to the taxpayers.
    The FAR outlines procurement policies and procedures that are used 
by members of the acquisition team. If a policy or procedure, or a 
particular strategy or practice is in the best interest of the 
Government and is not specifically addressed in the FAR, nor prohibited 
by law (statute or case law), Executive Order or other regulation, 
Government members of the Team should not assume it is prohibited. 
Rather, absence of direction should be interpreted as permitting the 
Team to innovate and use sound business judgment that is otherwise 
consistent with law and within the limits of their authority.
Steven Kelman,
Administrator.
[FR Doc. 95-1397 Filed 1-19-95; 8:45 am]
BILLING CODE 3110-01-M