procurement
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Federal Government
Contracting Introduction
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The United States Federal Government holds the distinction of being the world's preeminent purchaser.
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It commands annual Federal Budgets that ascend to the trillions of dollars to support its extensive global operations.
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The Federal Fiscal Year commences in October and culminates at the close of September.
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Annually, the government undertakes a rigorous evaluation of their projected expenditures and issues solicitations for major acquisitions exceeding the competitive threshold of $25,000.
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All government procurements adhere strictly to the Federal Acquisitions Regulation (FAR), with specific agencies, like those in defense, adhering additionally to supplementary regulations such as the Defense Federal Acquisition Regulation Supplement (DFARS).
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Significant solicitations, such as those for bulk petroleum, are announced for specified periods; for instance, a contract spanning from 2020 to 2024. The most recent petroleum contract, valued at $1.4 billion, concluded on January 31, 2024.
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Consequently, this procurement process has now been initiated for open bidding and will be advertised through an official solicitation.
Securing and Delivering Contracts
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Agency will establish their need
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Agency will determine the procurement vehicle (Post solicitation or direct contracting)
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Once proposals are received, agency will conduct a bid evaluation.
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There are different types of contracting; some consider LPTA (Lowest Price Technically Acceptable), some are TCO (Total Cost of Ownership), and some are driven by socio-economic goals such as Small Business Set-Asides.
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Once the selection process has been completed, a bid award announcement will be established.
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Contract awardee contract obligation initiates once it’s been accepted.
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After all deliveries or performances have concluded, inspection and acceptance will be performed by the agency.
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After full acceptance, agency will provide a receiving report.
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Supplier then submits for invoicing with different net terms based on the contract.
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After full submittal of receiving report and invoice, payment will be processed and deposited within the net payment terms.
Contract Duration Summary
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The timeline for procurement processes is not uniform; it varies according to the dollar amount involved and the type of procurement in question, ranging from the use of Purchasing Cards to Simplified Acquisition Thresholds and extending to substantial contracts.
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The journey from procurement initiation often starts with a 'Sources Sought' notice, then progresses to 'Pre-Solicitation.' This phase serves as the market research phase, intended to gauge public interest and identify potential suppliers. It can also determine whether to allocate the procurement to specific set-asides based on the responses received. This stage typically spans 1 to 3 months.
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Following the market research, a formal solicitation is released, detailing all commercial and technical specifications, including necessary drawings and any unique requirements associated with the purchase. This process also generally takes between 1 to 3 months.
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The bid evaluation and award phase can last anywhere from 1 month to over 6 months, dependent on the contract's intricacy.
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The duration of contract performance is contingent on the individual contract's stipulations.
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Upon receipt of goods or services, an inspection and acceptance period is mandated, usually taking an estimated 3 to 7 days before the shipment can be picked up or delivered.
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Subsequent to the issuance of a receiving report, the supplier is expected to submit an invoice for payment.
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The invoice payment processing period is determined by the contractual payment terms, which could be Net 15, Net 30, or Net 45. Notably, small disadvantaged businesses are eligible for expedited payments, potentially receiving funds within 15 days. The entire process from invoice submission to payment typically unfolds within approximately 15 to 30 days
Meeting Contract Obligation
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Key Performance Indicators
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Technical Excellence Achieved: Every technical specification has been meticulously met, ensuring the highest standard of quality.
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Delivery Precision: Commitment to the prompt and timely delivery of all orders, exceeding logistical expectations.
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Documentation Perfection: Comprehensive submission and approval of all necessary documentation, signifying thorough compliance.
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Cost Efficiency Realized: Significant cost reductions have been identified and captured, adding value and efficiency.
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Scheduling Fidelity: All timelines have been met with precision, showcasing exceptional project management and coordination.