
PART 34--MAJOR SYSTEM ACQUISITION
Subpart 34.0--General
Subpart 34.1--Testing, Qualification and Use of Industrial Resources Developed Under Title III, Defense Production Act
Subpart 34.0--General
34.000 Scope of part.
This part describes acquisition policies and procedures for use in acquiring
major systems consistent with OMB Circular No. A-109, Major System Acquisitions
(A-109) (see 34.003).
34.001 Definition.
"Effective competition," as used in this part, is a market condition which
exists when two or more contractors, acting independently, actively contend
for the Government's business in a manner which ensures that the Government
will be offered the lowest cost or price alternative or best technical
design meeting its minimum needs.
34.002 Policy.
The policies of this part are designed to ensure that agencies acquire
major systems in the most effective, economical, and timely manner. Agencies
acquiring major systems shall--
(a) Promote innovation and full and open competition as required by
Part 6 in the development of major system concepts by--
(1) Expressing agency needs and major system acquisition program objectives
in terms of the agency's mission and not in terms of specified systems
to satisfy needs, and
(2) Focusing agency resources and special management attention on activities
conducted in the initial stage of major programs; and
(b) Sustain effective competition between alternative system concepts
and sources for as long as it is beneficial.
34.003 Responsibilities.
(a) As required by A-109, the agency head or designee shall establish written
procedures for its implementation.
(b) The agency procedures shall identify the key decision points of
each major system acquisition and the agency official(s) for making those
decisions.
(c) Systems acquisitions normally designated as major are those programs
that, as determined by the agency head, (1) are directed at and critical
to fulfilling an agency mission need, (2) entail allocating relatively
large resources for the particular agency, and (3) warrant special management
attention, including specific agency-head decisions. The agency procedures
may establish additional criteria, as specified in A-109, for designating
major programs system acquisitions.
34.004 Acquisition strategy.
The program manager, as specified in agency procedures, shall develop an
acquisition strategy tailored to the particular major system acquisition
program. This strategy is the program manager's overall plan for satisfying
the mission need in the most effective, economical, and timely manner.
The strategy shall be in writing and prepared in accordance with the requirements
of Subpart 7.1, except where inconsistent with this part, and shall qualify
as the acquisition plan for the major system acquisition, as required by
that subpart.
34.005 General requirements.
34.005-1 Competition.
(a) The program manager shall, throughout the acquisition process, promote
full and open competition and sustain effective competition between alternative
major system concepts and sources, as long as it is economically beneficial
and practicable to do so. Notice of the proposed acquisition shall be given
the broadest and most effective circulation practicable throughout the
business, academic, and Government communities. Foreign contractors, technology,
and equipment may be considered when it is feasible and permissible to
do so.
(b) The contracting officer should time solicitation issuance and contract
award to maintain continuity of concept development during the transition
from with-drawing concept proposer to new contractor.
34.005-2 Mission-oriented
solicitation.
(a) Before issuing the solicitation, whenever practicable and consistent
with agency procedures, the contracting officer should take the actions
outlined in subparagraphs (a)(1) and (2):
(1) Advance notification of the acquisition should be given the widest
practicable dissemination, including publication in the Commerce Business
Daily (see Subpart 5.2) and should be sent to as wide a selection of potential
sources as practicable, including smaller and newer firms, Government laboratories,
federally funded research and development centers, educational institutions
and other not-for-profit organizations, and, if it would be beneficial
and is not prohibited, foreign sources.
(2) If appropriate, hold a presolicitation conference (see 15.201) and/or
send copies of the proposed solicitation to all prospective offerors for
their comments. After evaluation of these comments, the solicitation should
be revised, if appropriate.
(b) The contracting officer shall send the final solicitation to all
prospective offerors. It shall--
(1) Describe the nature of the need in terms of mission capabilities
required, without reference to any specific systems to satisfy the need;
(2) Indicate, and explain when appropriate, the schedule, capability,
and cost objectives and any known constraints in the acquisition;
(3) Provide, or indicate how access can be obtained to, all Government
data related to the acquisition;
(4) Include selection requirements consistent with the acquisition strategy;
and
(5) Clearly state that each offeror is free to propose its own technical
approach, main design features, subsystems, and alternatives to schedule,
cost, and capability goals.
(c) To the extent practicable, the solicitation shall not reference
or mandate Government specifications or standards, unless the agency is
mandating a subsystem or other component as approved under agency procedure.
34.005-3 Concept
exploration contracts.
Whenever practicable, contracts to be performed during the concept exploration
phase shall be for relatively short periods, at planned dollar levels.
These contracts are to refine the proposed concept and to reduce the concept's
technical uncertainties. The scope of work for this phase of the program
shall be consistent with the Government's planned budget for the phase.
Follow-on contracts for such tasks in the exploration phase shall be awarded
as long as the concept approach remains promising, the contractor's progress
is acceptable, and it is economically practicable to do so.
34.005-4 Demonstration
contracts.
Whenever practicable, contracts for the demonstration phase should provide
for contractors to submit, by the end of the phase, priced proposals, totally
funded by the Government, for full-scale development. The contracting officer
should provide contractors with operational test conditions, performance
criteria, life cycle cost factors, and any other selection criteria necessary
for the contractors to prepare their proposals.
34.005-5 Full-scale
development contracts.
Whenever practicable, the full-scale development contracts should provide
for the contractors to submit priced proposals for production that are
based on the latest quantity, schedule, and logistics requirements and
other considerations that will be used in making the production decision.
34.005-6 Full production.
Contracts for full production of successfully tested major systems selected
from the full-scale development phase may be awarded if the agency head--
(a) Reaffirms the mission need and program objectives; and
(b) Grants approval to proceed with production.
Subpart 34.1--Testing, Qualification and Use of Industrial Resources
Developed Under Title III, Defense Production Act
34.100 Scope of subpart.
This subpart prescribes policies and procedures for the testing, qualification,
and use of industrial resources manufactured or developed with assistance
provided under section 301, 302, or 303 of the Defense Production Act (50
U.S.C. App. 2091-2093). Title III of the Defense Production Act authorizes
various forms of Government assistance to encourage expansion of production
capacity and supply of industrial resources essential to national defense.
34.101 Definitions.
"Item of supply" for the purpose of this subpart, means any individual
part, component, subassembly, assembly, or subsystem integral to a major
system, and other property which may be replaced during the service life
of the system. The term includes spare parts and replenishment parts, but
does not include packaging or labeling associated with shipment or identification
of an "item."
34.102 Policy.
It is the policy of the Government, as required by Section 126 of Public
Law 102-558, to pay for any testing and qualification required for the
use or incorporation of the industrial resources manufactured or developed
with assistance provided under Title III of the Defense Production Act
of 1950.
34.103 Testing and qualification.
(a) Contractors receiving requests from a Title III project contractor
for testing and qualification of a Title III industrial resource shall
refer such requests to the contracting officer. The contracting officer
shall evaluate the request in accordance with agency procedures to determine
whether: (1) the Title III industrial resource is being or potentially
may be used in the development or manufacture of a major system or item
of supply; and (2) for major systems in production, remaining quantities
to be acquired are sufficient to justify incurring the cost of testing
and qualification. In evaluating this request, the contracting officer
shall consult with the Defense Production Act Office, Title III Program,
located at:
Wright Patterson Air Force Base
OH 45433-7739.
(b) If the determination at 34.103(a) is affirmative, the contracting
officer shall modify the contract to require the contractor to test the
Title III industrial resource for qualification.
(c) The Defense Production Act Office, Title III Program, shall provide
to the contractor the industrial resource produced by the Title III project
contractor in sufficient amounts to meet testing needs.
34.104 Contract clause.
Insert the clause at 52.234-1, Industrial Resources Developed under Title
III, Defense Production Act, in all contracts for major systems and items
of supply.