Guide for the Acquisition of non-purchased care Support
Table of Contents
1. BACKGROUND. 1
2. LEGAL AUTHORITY. 2
2.1 Economy Act 2
2.2 DoD Rules Regarding Non-Economy Act Orders. 3
2.3 DoD Guidance and Procedures on In-Sourcing. 3
3. TMA PREFERRED CONTRACTING ACTIVITIES. 4
3.1 TMA Contract Vehicles. 4
3.2 Use of Acquisition Support Agreements. 6
4. FUNDING CONSIDERATIONS. 6
4.1 Purpose of Funds. 6
4.2 Time Availability of Funds. 7
5. SUPPORT AGREEMENTS. 9
6. DOCUMENTING INTERSERVICE AND INTERAGENCY ORDERS. 14
6.1 Procurement Package. 15
6.2 Dollar Thresholds Requiring Approval of the TMA Deputy Director 15
6.3 USD(AT&L) Procedures for the Acquisition of Services. 16
6.4 Economy Act Order Determination and Finding. 17
6.5 Interagency Acquisition Reviews and Approvals. 18
6.6 Defense Business System Modernization (DBSM) Certification. 19
6.7 Statement of Work (SOW) 20
6.8 Proposed Evaluation and Selection Criteria for Competitive Awards. 20
6.9 Economic Analysis. 20
6.10 Independent Government Cost Estimate (IGCE) 21
6.11 Military Interdepartmental Purchase Request (MIPR) 22
6.12 Justification and Approval (J&A) 23
6.13 Justification for Lease Versus Purchase Decision. 24
6.14 TMA Legal Review.. 24
7. FEDERAL SUPPLY SCHEDULES. 24
8. MONITORING ORDER EXECUTION. 24
8.1 Reconciliation. 24
8.2 Order Administration. 25
8.3 Order Close-Out 25
9. REFERENCES. 26
Enclosures to Policy on the Acquisition of Non-Purchased Care Support
Enclosure 1. Requesting Official Responsibilities
Enclosure 2. Non-Economy Act Acquisition Package Checklist
Enclosure 3. Procedures for Proposed Acquisitions of Services With Estimated Values Exceeding Notification Thresholds – Non-Purchased Care
Enclosure 3-1. Acquisition Strategy Requirements
Enclosure 4. Economy Act Determination and Finding (D&F) for Services Provided via Contract
Enclosure 5. Review and Approval (Template)
Enclosure 6. Requirement Review and Release for Acquisition Under the Defense Business System Modernization Program
Enclosure 7. Justification and Approval (J&A) For Other Than Full and Open Competition IAW FAR Subpart 6.3 (Template)
Enclosure 8. Acquisition Support Agreement Worksheet
Enclosure 9. Acquisition Package Supporting Documentation Checklists
Enclosure 10. Justification and Approval (J&A) For Limited Sources IAW FAR 8.405-6 (Template)
Enclosure 11. Program Support Agreement Template
Enclosure 12. PRW Review Form (for PRW packages forwarded to the TMA Deputy Director for approval)
Enclosure 13 Economic Analysis Tool (D/SIDDOMS 3)
Enclosure 14 Economic Analysis Tool (TEAMS)
Enclosure 15 Economic Analysis Tool (T/AARMS)
Enclosure 16 Economic Analysis Tool (Non-TMA contract vehicle)
Enclosure 17 Inventory of Purchased Services (Template)
GUIDE FOR THE ACQUISITION OF OF NON-PURCHASED CARE SUPPORT
The purpose of this document is to provide a consolidated source of guidance on processing actions for the acquisition of non-purchased care support. This guidance is provided for all TMA requiring activities processing the following non-purchased care support actions:
1. BACKGROUND. Within DoD, support agreement are used to set the ground rules and establish the general provisions for recurring reimbursable support provided between a requesting activity (also referred to as the receiving activity) and a supplying activity (also referred to as the servicing or supporting activity). In accordance with DoD Instruction (DoDI) 4000.19, Subject: Interservice and Intragovernmental Support, dated 09 August 1995:
As used within DoD, the terms Intragovernmental Support and Interagency Support are synonymous. To ensure consistency with the terminology used within FAR Subpart 17.5, the term Interagency Support is used hereafter to define support “provided by a DoD activity to a Non-DoD Federal activity and vice versa.”
DoD contracting offices provide most of the non-purchased care contracting support for TMA in accordance with interservice support agreements and through interservice orders. An interservice
order is a specific request from one DoD activity to another DoD activity resulting in a transaction of goods or services. Some TMA non-purchased care contracting support is
obtained through Non-DoD Federal agencies. When obtaining contracting support from Non-DoD Federal agencies, TMA incurs additional risk. Statutory violations can occur when
contracting requirements are sent to Non-DoD contracting activities, which may be generally unaware of (and usually do not have to adhere to) limitations and special requirements placed on
DoD acquisitions by federal law or regulations. The inappropriate use of Non-DoD contracting support has been cited in recent audits of
DoD activities (see DoD Inspector General reports D-2001-034
and D-2002-109) and in some cases have led to potential Antideficiency Act Violations against the organization obtaining the contracting support (requesting activity). These audits have shown that there is a potentially higher risk of inappropriate application of contracting, legal, resource management, and program management regulations when a Non-DoD contracting activity is used. Because of this potentially increased risk, high level of scrutiny, and the possibility of legal or regulatory violations, all acquisitions of non-purchased care support are required to be processed through the TMA Contract Operations Division – Falls Church (COD-FC). In addition, TMA managers are required to consider a number of critical factors when contemplating the use of a Non-DoD contracting activity:
Even though a Non-DoD contracting office establishes a contract for TMA, key responsibilities remain with the TMA as the requesting activity. Since these contracts are funded with Defense Health Program (DHP) funds and support TMA missions, it remains a TMA function and a responsibility of TMA requiring activities to conduct complete market research, acquisition planning, and to ensure no laws, regulations or policy guidance are violated.
2. LEGAL AUTHORITY. Reimbursable contracting support from another DoD activity or Non-DoD Federal agency can only be obtained based on statutory authority.
2.1. ECONOMY ACT.Unless more specific statutory authority exists, the Economy Act applies to all interservice and interagency acquisitions. The Economy Act, codified at 31 USC 1535, authorizes interservice and interagency acquisitions. The Economy Act applies when more specific statutory authority does not exist. A requesting activity may invoke the Economy Act if it has funds available, determines that the order is in the best interest of the Government, and the requested goods or services cannot be provided by contract as conveniently or cheaply by a commercial enterprise. Further, the supplying activity must be able to provide or get by contract the ordered goods or services. The Economy Act may not be used to circumvent conditions or limitations imposed on the use of funds, or to make acquisitions that conflict with any other agency’s authority or responsibility. Additionally, acquisitions under the Economy Act are not exempt from the provisions of the Federal Acquisition Regulation (FAR) Subpart 7.3, Contractor Versus Government Performance, which implements OMB Circular No. A‑76, as supplemented.
The Economy Act cannot be used to circumvent conditions and limitations on funds. DoD activities must expend appropriated funds in the amounts, for the purpose, and within the time
required by an appropriation.
Circumventing conditions and limitations on funds can violate the Antideficiency Act by spending in excess of an appropriation or exceeding an apportionment or otherwise avoiding limitations on appropriated funds. In accordance with the DoD Financial Management Regulation (DoDFMR), Volume 11A, Chapter 3, a DoD supplying activity cannot issue an Economy Act order if commencement of work is contingent upon the occurrence of a future event or authorizing action by the DoD requesting activity. In other words, everything must be in place to start work.
2.2. DOD RULES REGARDING NON-ECONOMY ACT ORDERS.
Non-Economy Act orders must follow the same fiscal law rules as Economy Act orders. Certain Federal entities have been granted specific statutory authority for rendering acquisition support services. The “more commonly used non-Economy Act authorities include, but are not limited to” the Acquisition Service Fund, applicable to the General Service Administration, and Franchise Funds, applicable to other Federal departments/agencies including the Environmental Protection Agency, Department of Commerce, Department of Veterans Affairs, Department of Health and Human Services, Department of the Interior, and Department of the Treasury.
DoDFMR Volume 11A, Chapter 18, “prescribes policies and procedures applicable to transactions where goods or services are procured from Non-DoD Federal agencies under statutory authorities other than the Economy Act” (non-Economy Act orders). It defines the roles and responsibilities of both the DoD requesting activity and the Non-DoD supplying activity in ensuring fiscal law rules applicable to DoD appropriations are followed when executing non-Economy Act orders. Addressing violations of the bona fide need rule noted in a series of General Accountability Office (GAO) audits of DoD non-Economy Act orders, the DoDFMR Volume 11A, Chapter 18, paragraph 180208, specifically states “An interagency agreement may not be used in the last days of the fiscal year solely to prevent funds from expiring or to keep them available for a requirement arising in the following fiscal year.” While noting the bona fide need determination is the responsibility of the DoD requesting activity, the DoDFMR states “the servicing activity can, however, refuse to accept a non-Economy Act order if it is obvious that the order does not serve a need existing in the fiscal year for which the appropriation is available.”
2.3. DOD GUIDANCE AND PROCEDURES ON IN-SOURCING.
The FY 2008 National Defense Authorization Act (NDAA) gave DoD increased authority and established new requirements regarding in-sourcing new and contracted out functions.
2.3.1.In compliance with this legislation, the Under Secretary of Defense for Personnel and Readiness (USD(P&R)) issued guidelines and procedures to ensure that DoD activities consider using DoD
civilian employees to perform new functions (including functions performed via new service contracts, or new support agreements requiring substantial contracted services). This guidance
was issued as an attachment to a Secretary of Defense memo, Subject: Implementation of Section 324 of the
National Defense Authorization Act for Fiscal Year 2008 (FY 2008 NDAA) – Guidelines and Procedures on In-sourcing New and Contracted Out Functions, dated April 4, 2008 and supplemented in the
attachment to a Secretary of Defense memo,
Subject: Insourcing Contracted Services, dated May 28, 2009. Key aspects of this guidance include:
2.3.2. TMA has published interim in-sourcing guidance to implement these DoD procedures. This interim TMA guidance takes into consideration current Base Relocation and Closure (BRAC)-related restrictions and actions to be taken until those restrictions are lifted. Additional DoD-wide instruction relating to this subject has been incorporated into DoDI 1100.22, Subject: Policy and Procedures for Determining Workforce Mix, dated 12 April 2010. The lead TMA organization for this subject is the TMA Business Operations Division.
3. TMA PREFERRED CONTRACTING ACTIVITIESCOD-FC has surveyed its customer base to determine their contract support needs and has established umbrella acquisition support agreements to obtain contracting services from a limited number of contracting activities possessing diverse capabilities and expertise. The use of these acquisition support agreements usually entails a service fee, which must be paid by the requesting activity.
3.1. TMA CONTRACT VEHICLES. TMA has an acquisition support agreement in place with US Army Medical Research Acquisition Activity (USAMRAA), establishing it as a preferred contracting activity (PCA). Through this PCA agreement with USAMRAA, TMA has available to it a suite of three contract vehicles, which are key components of the TMA acquisition infrastructure. USAMRAA administers these contract vehicles, but has granted limited ordering authority to another Army contracting office, the Information Technology, E-Commerce, and Commercial Contracting Center (ITEC4) to place orders against them on TMA’s behalf. The use of these TMA contract vehicles is preferred over all other vehicles.
3.1.1.The DoD/Systems Integration Design, Development, Operations and Maintenance Services (D/SIDDOMS 3) contract is the first in this limited line of TMA contract vehicles designed to support the OASD(HA), TMA, and Military Health System (MHS) missions. These Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts have multiple awardees and are designed to satisfy requirements within Organizational Conflict of Interest (OCI) Category 3 – for Product Support, i.e. services or end items required to meet mission requirements of TMA’s non-purchased care activities and programs. This includes, for example: concept exploration and development, system design, system development and integration, Commercial Off-The-Shelf (COTS) procurement and integration, internal development testing, deployment, installation, operations, and maintenance. The third generation of these contracts is D/SIDDOMS-3.
3.1.2.The TRICARE Acquisition Automation and Resource Management Support (T/AARMS) contract, is an ID/IQ contract vehicle designed by TMA to satisfy requirements within OCI Category 1 – for TMA “Internal” Support Services. This includes, for example: administrative support services; procurement support services; systems and database management services; budget, financial, or cost estimation services; and information technology services, facilities, and support. T/AARMS is a multiple award contract vehicle, allowing TMA to solicit bids from multiple contractors on a Fair Opportunity basis. Orders issued against T/AARMS may be Firm Fixed Price (FFP), Cost Plus Fixed Fee (CPFF), Cost Plus Award Fee (CPAF), or Time & Material / Labor Hour (T&M/LH).
3.1.3.The TRICARE Evaluation, Analysis, and Management Support (TEAMS) contract is an ID/IQ contract vehicle designed by TMA to satisfy requirements within OCI Category 2 – for Program Management Support Services, which assist TMA in planning and managing its activities and programs. This includes, for example: program management support services; studies and analysis; performance based budgeting / financial management; business process improvement; functional validation and verification; records management; information management; acquisition management; and logistical support. TEAMS is a multiple award contract vehicle, allowing TMA to solicit bids from multiple contractors on a Fair Opportunity basis. Orders issued against TEAMS may be Firm Fixed Price (FFP), Fixed Price Incentive (FPI), Cost Plus Fixed Fee (CPFF), Cost Plus Award Fee (CPAF), or Time & Material / Labor Hour (T&M/LH).
3.2. USE OF ACQUISITION SUPPORT AGREEMENTS. For requirements that cannot be met through the use of a TMA contract vehicle, USAMRAA may be able to use other vehicles to meet the TMA requirement. Additionally, TMA has acquisition support agreements in place with other DoD and Non-DoD contracting offices. These agreements establish clear performance expectations between TMA, as the requesting activity, and the contracting office, as the supplying activity. The fact that some TMA acquisition support agreements are with Federal agencies outside the DoD in no way negates any of the DoD or Federal legal and/or regulatory requirements for obtaining support from a Non-DoD Federal agency.
4. FUNDING CONSIDERATIONS.The use of appropriated funds is subject to rigid application of federal fiscal law. Failure to abide by the rules of fiscal law may result in a violation of the Antideficiency Act. The Antideficiency Act is codified in Title 31 USC sections 1341, 1342, 1344, 1511-1519; and is implemented by OMB Circular A-34, "Instructions on Budget Execution," DoD Directive 7200.1, "Administrative Control of Appropriations," and Volume 14 of the DoDFMR.
The person who causes an Antideficiency Act violation may be subject to discipline, including suspension without pay or removal from office. If action is done knowingly and willfully, that person may be subject to criminal penalties of a fine up to $5,000, imprisonment for not more than 2 years, or both. (31 USC 1519)
An appropriation does not lose its character when a Military Interdepartmental Purchase Request (MIPR), or other funding documentation, is used to transfer funds to another DoD activity or to a Non-DoD Federal agency. Consistent with the references provided above, any requiring activity within TMA wishing to send the funds to a Franchise Fund or GSA IT Fund is required to ensure that sufficient funds of the proper appropriation are legally available for obligation. The concept of the “legal availability” of appropriations may be defined in terms of two elements—purpose and time.
4.1. PURPOSE OF FUNDS.
31 USC 1301(a) states that funds may be obligated only for the purpose for which they were appropriated. This is often referred to as the "purpose statute". It requires that appropriated funds only be used for programs and purposes for which the appropriation is made.
Federal agencies may not use annual O&M funds to pay for requirements that must be funded from multi-year appropriations such as Procurement or RDT&E funds.
Procurement funds should be used to acquire and deploy systems costing $250,000 or more, including capital leases, which are essentially installment purchases of capital property. Research, Development, Test and Evaluation (RDT&E) funds should be used to develop major upgrades to increase the performance or functionality of existing systems, purchase test articles, and conduct developmental testing and/or initial operational test and evaluation prior to system acceptance. Should a violation of 31 USC 1301(a) be discovered, accounting adjustments must be recorded, i.e., the correct color of money must be charged. If the adjustment results in an over-obligation or over-expenditure of the appropriation or fund charged, an Antideficiency Act violation has occurred, and must be officially reported.
4.2. TIME AVAILABILITY OF FUNDS.Another fundamental rule of appropriations law, relating to time availability, is the “bona fide need rule” contained in 31 U.S. C. 1502.
A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year for which the appropriation was made. (See, e.g., 68 Comp. Gen. 170, 171)
Requiring activities within TMA are required to ensure that the need does not occur in a future time period beyond the period of availability of the appropriation used to fund the requirement. To demonstrate this, any TMA activity wishing to fund a requirement with year-end funds is required to ensure that the need exists in the current fiscal year, and the requirement is clearly and completely documented within the procurement package. There is no blanket rule and each need or requirement must be considered independently to ensure that the amount of the entire requirement is properly chargeable to the current fiscal year. All orders placed for goods or services are required to be executed only with bona fide intent that the supplying activity will commence work and perform the service without unnecessary delay.
4.2.1. FUND AVAILABILITY FOR BOTH ECONOMY ACT AND NON-ECONOMY ACT ORDERS (APPLIES TO DOD AND NON-DOD SUPPLYING ACTIVITIES ALIKE). Once the appropriate TMA Director or designee has established a bona fide need for goods or services against a given appropriation, they are required to ensure that the supplying activity providing those goods or services complies with federal appropriations law and corresponding DoD fiscal policy requiring the use (obligation) of DoD funds within their period of availability. In all cases, the requesting activity must clearly identify to the supplying activity the appropriation used to fund the transaction, its period of availability, and limitations on its use. In the case of all acquisitions of goods or services, whether obtained by a DoD or Non-DoD contracting office, if the supplying activity has not awarded a contract by the end of the period of availability of the source appropriation, they are required to return those funds to the activity that placed the order.
4.2.2. YEAR END REQUIREMENTS AND THE BONA FIDE NEED RULE.Whenever funds are committed and obligated at or near the end of their period of availability, the principle of availability in terms of time must be carefully considered. These year-end transactions are frequently the subject of review by the GAO or the DoD Inspector General’s office and, without adequate documentation of a bona fide need, are suspect simply due to their timing. Each commitment must stand on its own merits and in light of surrounding circumstances. Thus, as outlined in Volume I, Chapter 5 of the GAO Principles of Federal Appropriations Law, “where a commitment and subsequent obligation is made toward the end of a fiscal year and it is clear from the facts and circumstances that the need relates to the following fiscal year, the bona fide need rule has been violated. The obligation is not a proper charge against the earlier appropriation, but must be charged against the following year’s funds.” This can lead to a violation of the Antideficiency Act if sufficient funds for the appropriate fiscal year are not available.
4.2.3. MODIFICATION OF ECONOMY ACT AND NON-ECONOMY ACT ORDERS Requesting activities should also use caution in modifying or adding to any existing Economy Act or Non-Economy Act order in ways that change the scope of the order or in any way violate appropriations law.
5. SUPPORT AGREEMENTS
6. INTERAGENCY ACQUISITIONS
An interagency acquisition order, or interagency order, is the term used to describe the process by which a specific request from one government agency (requesting activity) to another government agency (supplying activity) resulting in a transaction of goods or services. A “funds transfer” is one example of an interagency order. As used within the context of this guide, an interagency order is a TMA requirement for goods or services that is met through a contracting action executed by a Non-DoD Federal contracting activity based on an existing Interagency Acquisition Agreement between TMA and the supporting Non-DoD Federal agency. The interagency order initiates the transaction and serves to establish the scope of the undertaking, and establish the rights and obligations of the supplying and requesting activities. Moreover, it is required to record an obligation. A majority of TMA interagency orders are executed under interagency acquisition agreement established using the OMB OFPP “Part A” interagency agreement (IA) format referenced in section 5 above. Interagency orders executed under “Part A” IAs must be executed using a corresponding “Part B” IA that provides the “Requirements and Funding Information” applicable to the specific interagency order. (Agency-specific Part B templates are available online through the COD-FC “Index of Templates and Worksheets.”)
In accordance with FAR 17.504, TMA acquisitions executed under the Economy Act (Economy Act Orders) with Non-DoD
Federal agencies must be evidenced by a written order which should contain the following:
In accordance with paragraph 180203 of DoDFMR Volume 11A, Chapter 18, TMA acquisitions under Non-Economy Act authorities (Non-Economy Act Orders) must include:
6.1. PROCUREMENT PACKAGE. The procurement package for an acquisition or “funds transfer” should provide all requisite information, clearly indicating to a reviewer that the TMA requiring activity knows precisely what it needs, when it needs it and within reason, how much it should cost. To facilitate compliance with DoD interagency acquisition policy and DoDFMR requirements, TMA Requesting Officials should refer to Enclosure 1, Requesting Official’s Responsibilities, when planning any interagency acquisition. All acquisitions for TMA non-purchased care support, regardless of the supplying activity, are required to be presented as a complete procurement package, to include a Purchase Request Worksheet (PRW) and attached documentation. In accordance with PRW processing and coordination procedures, TMA Functional Chiefs are responsible for reviewing and signing all PRWs originating from the offices under their purview. TMA Functional Chiefs may designate one individual in writing with the official capacity to act on their behalf. If so, this designation is required to be forwarded to and kept on file in the TMA Procurement Support Division. In addition to documentation forwarded with the PRW, TMA requiring activities are responsible for documenting the rationale behind management decisions related to the acquisition or “funds transfer”. This documentation, as well as other supporting documentation to be retained within the TMA requiring activity, is outlined in the contracting office checklists at Enclosure 9, and discussed in the following paragraphs.
6.2. DOLLAR THRESHOLDS REQUIRING APPROVAL OF THE TMA DEPUTY DIRECTOR.
All procurement packages for contracts/orders in excess of $10,000,000 (including option periods) are required to be reviewed and approved by the TMA Deputy Director prior to sending the requirement or any DHP funds to the performing activities. When the TMA Deputy Director is unavailable to approve the above actions, he/she will designate a TMA official to be the alternate approval authority.
After the initial approval is granted by the Deputy Director, requests to exercise subsequent options will not require additional Deputy Director approval. Also, requests for contract modifications will not require additional Deputy Director approval as long as the scope of the requirement does not change. Deputy Director approval will not be required in cases where the TMA requiring activity requests that an option be exercised under a contract awarded prior to March 20, 2007.
For funds transfers, Deputy Director level approval of the support agreement will signify approval of associated funds transfers to execute the approved agreement. Additional approvals are not required to transfer funding to execute the approved agreement. However, for any given requirement with an expected/projected annual cost in excess of $10,000,000, funds transfers that exceed the scope of the approved agreement in cost or type of services would require Deputy Director approval.
The template at Enclosure 12 will accompany each PRW package forwarded to the TMA Deputy Director for approval.
6.3. USD(AT&L) PROCEDURES FOR THE ACQUISITION OF SERVICES.
In compliance with an Undersecretary of Defense (Acquisition, Technology and Logistics) memorandum dated 2 October 2006, subject Acquisition of Services Policy, TMA has issued guidance in the form of TRICARE Acquisition Practice (TAP) 37-3, which includes procedures for the acquisition of non-purchased care services (Enclosure 3). This guidance supersedes the TRICARE Management Activity (TMA) Services Contract Oversight Process (SCOP), dated December 28, 2004. All personnel involved with the acquisition of services should be thoroughly familiar with both the AT&L memo and the TMA supplementing guidance. Under this policy, a written Acquisition Strategy is required for all acquisitions of services exceeding $10 million. These procedures apply to all requirements for acquisitions of services, including those of advisory and assistance services, acquired from private sector entities by or for TMA, and also apply to any transfer of funds to acquire a service on behalf of TMA. There are limited exceptions to this AT&L policy:
6.3.1.While the AT&L policy does not apply to research and development or construction activities, the policy does apply to any advisory and assistance services in support of those activities.
6.3.2.Acquisitions of services that are part of a weapon system acquisition program or an automated information system that is managed in accordance with DoD Instruction 5000.2 shall be reviewed and approved as part of that program management process.
6.4. ECONOMY ACT ORDER DETERMINATION & FINDING.
Each Economy Act order is required to be supported by a Determination and Finding (D&F). For interservice Economy Act orders, “these determinations are signified by signing a support agreement (blocks 8 and 9 on DD form 1144) -- no further written determinations are required for agreements between DoD activities” as reflected in both DoDI 4000.19, and the DoDFMR (Volume 11A, Chapter 3).
For each Economy Act Order executed under an interagency acquisition agreement between TMA and a Non-DoD Federal agency, a separate D&F is required in accordance with DoDFMR Volume 11A, Chapter 3 (paragraph 030202.B), FAR Subpart 17.5 (paragraph 17.503), and DFARS Subpart 217.5 (paragraph 217.503). TMA requiring activities are responsible for preparing the Economy Act D&F. DFARS Subpart 217.5 requires a copy of the executed D&F to be provided to the Non-DoD supplying activity “as an attachment to the order.” A D&F Template for interagency orders under the Economy Act is at Enclosure 4.
6.4.1 ECONOMY ACT D&F CONTENT REQUIRED BY THE FAR. The content of the TMA Economy Act D&F template is governed by the FAR. FAR 17.503 requires all Economy Act D&Fs for interagency acquisitions to contain two statements:
6.4.2. ECONOMY ACT D&F APPROVALS For each Economy Act order for acquisition support from Non-DoD organizations subject to the FAR, TMA requestors must submit a D&F approved at the SES, Flag, or General Officer level. Approval authority for acquisition support from Non-DoD organizations that are not subject to the FAR resides with the senior procurement executive for DoD - Under Secretary of Defense (Acquisition, Technology and Logistics).
6.5. INTERAGENCY ACQUISITION REVIEWS AND APPROVALS.The joint USD(Comptroller) and
USD(AT&L) memorandum, Subject: Proper Use of Non-DoD Contracts, dated October 29, 2004,
requires certain procedures for reviewing and documenting the approval of all interagency assisted acquisitions using DoD funds, for amounts greater than the simplified
acquisition threshold (currently set at $100,000). Paragraph 217.7802 (Policy) of DFARS Subpart 217.78, Contracts or Delivery Orders Issued by a Non-DoD
Agency, has been revised to incorporate these required procedures, which include:
6.5.1. REVIEW AND APPROVAL TEMPLATE.If an interagency acquisition exceeds the simplified acquisition threshold as defined in FAR Part 2.1, the responsible TMA requiring activity is required to conduct the necessary evaluation and prepare a review and approval document, documenting that evaluation, and confirming that the procedures called for in the Comptroller/AT&L joint memo have been met. This is in addition to any other review documentation that may be required, such as an Economy Act D&F. A Review and Approval template is available at Enclosure 5.
6.5.2. CONTRACTING OFFICER REVIEW FOR NON-ECONOMY ACT ORDERS.In addition to the above requirements, all Non-Economy Act orders greater than $500,000 are required to be reviewed by a DoD warranted contracting officer prior to sending the order to the funds certifier or issuing the funds execution document (MIPR or Intragovernmental Payment and Collection (IPAC) document) to the Non-DoD activity. In addition to the review of the contracting officer, the Requesting Official is required to further review the acquisition package to ensure compliance with the FAR part 7. These requirements were established by the USD(Comptroller) memorandum, subject: Non-Economy Act Orders, dated October 16, 2006, and have since been incorporated into DoDFMR Volume 11A, Chapter 18 (paragraph 180206). If applicable, completion of the Contracting Officer Review is to be documented using the Review and Approval template available at Enclosure 5, and a copy of the completed DoD Contracting Officer review will be attached to the completed Review and Approval document.
6.5.3. NON-ECONOMY ACT ACQUISITION PACKAGE CHECKLIST. The Non-Economy Act Acquisition checklist at Enclosure 2 will be adhered to by all TMA requiring activities.
6.5.4.REVIEW AND APPROVAL LEVELS. The approval level for Review and Approval document is at the Program Manager/Division Director level or higher.
6.6. DEFENSE BUSINESS SYSTEM MODERNIZATION (DBSM) CERTIFICATION. In accordance with PRW processing and coordination procedures, TMA Functional Chiefs or the individual they have designated in advance in writing to act on their behalf, will review and sign all PRWs originating from the offices under their purview. The responsible Functional Chief or designated individual is responsible for ensuring that all PRWs for Organizational Conflict of Interest (OCI) Category 3 requirements (or any other OCI Category procurements containing IT related requirements), are routed through, and released by, the TMA Defense Business Transformation (DBT) Pre-Certification Authority indicating they have met all Defense Business System Modernization requirements, prior to signing and forwarding the PRW to the TMA Procurement Support Division and Financial Operations Division. This DBT release is documented by attaching to the PRW a completed and signed Requirement Review and Release for Acquisition Under the Defense Business Transformation Program form (Enclosure 6). Execution of DBT initiatives are tracked at two levels. The TMA requiring activity is responsible for initiating the requirements certification package and for executing at the certified level. The DBT Pre-Certification Authority centrally tracks certified systems and provides comments to the TMA requiring activity regarding approval levels and recertification processes. It is essential that the responsible Program Manager/requiring office provide supporting documentation reflecting the total life cycle cost of the IT requirement and funds committed/obligated to date toward that requirement in order for DBT Pre-Certification Authority to determine whether Defense Business Certification is required. Contact Ms. Karen Cheatwood, Karen.Cheatwood@dha.mil, or Carol Fielder, Carol.Fielder.firstname.lastname@example.org, for additional information on DBT requirements.
Category 3 requirements are defined as:
“Services or end items required to meet mission requirements of TMA’s non-purchased care activities and programs. This includes, for example: concept exploration and development, system design, system development and integration, COTS procurement and integration, internal development testing, deployment, installation, operations, and maintenance.”
6.7. STATEMENT OF WORK (SOW).
The SOW is a key part of the procurement package. In order to meet the bona fide need rule, the SOW must be specific, definite, and certain as to the work encompassed by the order, and the terms of the order.
The SOW is especially important when the acquisition is to be accomplished by a Non-DoD contracting activity. Auditors look closely at SOWs when determining adherence to bona fide need, especially for actions taken at the end of a fiscal year.
The SOW is the responsibility of the TMA requiring activity and should be carefully developed and thoroughly reviewed by the Program Manager or Requesting Official. TMA requiring activities are encouraged to use Performance Work Statements to the maximum extent possible.
6.8. PROPOSED EVALUATION AND SELECTION CRITERIA FOR COMPETITIVE AWARDS.
Each Request for Proposals has its own unique engineering, design, or performance factors, and must therefore use evaluation factors that address these needs when considering factors other than price. This normally requires involvement and input from the TMA requiring activity. Proposal evaluation and selection criteria that clearly and succinctly express the requiring activities’ minimum needs and their relative order of importance are critical to planning a successful acquisition, regardless of the contracting activity.
6.9. ECONOMIC ANALYSIS. In accordance with DoD Instruction 7041.3 “Economic Analysis for Decisionmaking,” November 7, 1995, it is DoD policy that the concepts of economic analysis constitute an integral part of the Planning, Programming, and Budgeting System of the Department of Defense.
6.9.1.An economic analysis developed early in the planning process, and retained within the TMA requiring activity, serves to support and document important management decisions.
Requiring activities must conduct and document a comparative economic analysis to show that the lowest cost method of acquisition has been considered as part of the least expensive life cycle cost to the government.
6.9.2.Economic analysis is a systematic approach to the problem of choosing the best method of allocating scarce resources to achieve a given objective. A sound economic analysis recognizes that there are alternative ways to meet a given objective and that each alternative requires certain resources, and produces certain results. To achieve a systematic evaluation, the economic analysis process examines each feasible alternative for meeting an objective and considers its life-cycle costs and benefits in evaluating and recommending a course of action. Acquisition costs, i.e. the costs of acquiring the service or products, are a major component of the life cycle cost estimate (LCCE), and therefore must be considered in any economic analysis. If a detailed economic analysis is done as part of the overall program acquisition strategy, it need not be repeated for individual procurements associated with the program. The Director of the TMA requiring activity or PM should conduct reviews as necessary to validate staff conclusions that the use of a Non-DoD contracting activity will be more economical or otherwise more beneficial to TMA than contracting support provided by a DoD contracting office. Economic analyses should be retained within the TMA requiring activity as evidence of the analytical process leading to key management decisions.
6.9.3.DoD has mandated a special economic analysis when contracting for services. This new DoD requirement for service contracting is identified in the Deputy Secretary of the
Defense (DEPSECDEF) Memorandum subject: Implementation of Section 324 of the National Defense Authorization Act for Fiscal Year 2008 (FY 2008 NDAA) -
Guidelines and Procedures on In-sourcing New and Contracted Out Functions, dated 4 Apr 08; and applicable procedures are further defined in
DEPSECDEF memorandum, Subject:
Insourcing Contracted Services – Implementation Guidance, dated 28 May 2009. For new or expanded mission requirements and other functions (not inherently governmental or exempt from private sector performance) that are performed under contract but that could be performed by DoD civilian employees, DoD Components are required to perform an economic analysis to determine whether DoD civilians or private sector contractors are the low cost provider and should perform the work. The determination of suitable DoD civilian grade levels and series, and the performance of this analysis is an inherently governmental function. COD-FC has developed tools to facilitate this analysis. Three separate tools are available for economic analyses comparing the cost of DoD civilian employees to contracting options under D/SIDDOMS-3 (Enclosure 13), TEAMS (Enclosure 14), and T/AARMS (Enclosure 15). A fourth tool is available when another contract vehicle (Enclosure 16) has been approved for use. Additional DoD-wide instruction relating to this subject has been incorporated into DoD Instruction (DoDI) 1100.22, Subject: Policy and Procedures for Determining Workforce Mix, dated 12 April 2010.
6.10. INDEPENDENT GOVERNMENT COST ESTIMATE (IGCE).
Once the requirement is delineated in the SOW, the TMA requiring activity is responsible for completing an Independent Government Cost Estimate (IGCE) delineating the specific labor, materials, and equipment, as well as any travel or other costs expected to be incurred. Requesting activities develop the IGCE as a key early step in the acquisition.
6.11. MILITARY INTERDEPARTMENTAL PURCHASE REQUEST (MIPR).
Typically, TMA uses a MIPR (DD Form 448) to serve the dual function of transferring funds to other organizations, and including the required terms and conditions. TMA cannot use a MIPR to send funds to another organization which is also funded by the DHP. The MIPR provides the citation of appropriate funds and the basis of payment (reimbursable order, direct cite), and information on any limitations on the duration of the funds to be transferred. The MIPR must be signed by a fund-certifying official within the Resource Management Directorate.
6.11.1.MIPRs may transfer funds in two ways:
6.11.2. MIPRs must include the following information:
6.11.3. MIPRs are required to contain the following statements:
6.12. JUSTIFICATION AND APPROVAL (J&A).
6.12.1. JUSTIFICATION AND APPROVAL (J&A) FOR OTHER THAN FULL AND OPEN COMPETITION.In accordance
with FAR 6.303, a contracting officer shall not commence negotiations for a
sole source contract, commence negotiations for a contract resulting from an unsolicited proposal, or award any other contract
without providing for full and open competition unless the contracting officer:
Signed J&As submitted as a separate enclosure are required for the following:
J&As for other than full and open competition should be prepared in draft form by the TMA requiring activity in consultation with the supplying activity’s contracting officer, and finalized by the supplying activity’s contracting officer in accordance with the J&A Template at Enclosure 7. Not all contracting officers will require this level of detail or this format.
6.12.2. JUSTIFICATION AND APPROVAL (J&A) FOR LIMITED SOURCES.
Under the Multiple Award Schedule Program a special J&A is required if the acquisition is restricted to limited sources IAW FAR 8.405-6. This J&A should be prepared in draft form by the TMA requiring activity in consultation with the supplying activity contracting officer, and in accordance with the FAR Subpart 8.4 J&A template (Enclosure 10). Highlighted portions of the template should be replaced with non-highlighted text specific to the contracting action and justification. The draft J&A should be provided electronically to the contracting officer for their review, completion and routing according to the contracting office’s procedures.
6.13. JUSTIFICATION FOR LEASE VERSUS PURCHASE DECISION.In accordance with DFARS 207.401, a requiring activity choosing to lease versus purchase equipment must prepare and provide the servicing contracting officer a written justification if the lease will exceed 60 days. This justification is in addition to the J&As required in paragraph 6.9 above.
6.14. TMA LEGAL REVIEW. For acquisition actions, the supplying activity’s legal office usually provides advice to the contracting officer regarding the acquisition. This legal review is normally focused on adherence to the FAR and the other acquisition regulations applicable to the supplying activity contracting office. Nevertheless, there may be other inherent legal risks to a transaction that could seriously impact TMA. To limit the risk to TMA, the TMA Office of General Counsel (OGC) reviews all contracts or funds transfers that exceed $10M or when special circumstances arise. Special circumstances include actions involving unusual requirements or unprecedented situations where legal issues have not been addressed. The TMA OGC needs to be advised of any legal matters or other concerns that may arise as a result of a contract or funds transfer, since such matters could result in liability to TMA.
7. FEDERAL SUPPLY SCHEDULES. All orders placed by DoD activities or placed by Non-DoD Federal agencies on behalf of DoD that exceed $100,000 for services under Federal Supply Schedules and Multiple Award Contracts are required to be placed in accordance with DFARS Subpart 208.405-70, which establishes procedures for competition as called for in Section 803 of the National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-107). When processing Non-Economy Act purchases, Section 803 requires one of the following:
8. MONITORING ORDER EXECUTION.TMA has a duty to monitor orders to ensure that the supplying activity honors terms of performance, funding stipulations, and periods of availability.
8.1. RECONCILIATION. The DoDFMR and DoD policy requires that activities reconcile the obligation status of both Economy Act and Non-Economy Act orders and de-obligate unused funds, as needed, before the end of the funds availability. Funds must be de-obligated by both the requesting and supplying activity to the extent that the supplying activity or unit filling the order has not, before the end of the period of availability of the appropriation of the requesting activity, (1) provided the goods or services, or (2) entered into an authorized contract with another entity to provide the requested goods or services.
Each funds holder is responsible for conducting reviews of unliquidated obligations. This review is required to ensure that any recorded obligation amount is accurate, and that the unliquidated amount is valid. This responsibility is placed on the funds holder, because the funds holder initiates those actions that result in commitments and obligations and, therefore, is in the best position to determine the accuracy and status of such transactions. Any discrepancies or required adjustments should be immediately reported to the Chief, Financial Operations, TMA Resource Management.
In accordance with the DoDFMR Volume 3, Chapter 8, Section 0804, fund holders are responsible for accomplishing tri-annual reviews of procurement and RDT&E obligations of $200,000 or more, and of O&M obligations of $50,000 or more. The reviews are required to be accomplished no later than 14 days following the end of January and May, as well as by September 30 of each fiscal year. In addition, all obligations not specifically addressed above, are required to be reviewed at least annually in order to substantiate the TMA year-end certification requirements.
8.2. ORDER ADMINISTRATION. The Requesting Official is required to establish quality assurance surveillance plans for both Economy Act and Non-Economy Act orders in excess of the simplified acquisition threshold to facilitate the oversight of the goods or services acquired through the supplying activity. The plan is required to include:
8.3. ORDER CLOSE-OUT. All orders are required to be reviewed by the Requesting Official to determine if they are complete.
Completed orders are required to be fiscally closed out. The Requesting Official is responsible for reconciling funds and coordinating the return of excess or expired funds held by the
supplying activity. This review is required to include the following actions:
9.1. DoD Instruction 4000.19, “Interservice and Intragovernmental Support,” August 9, 1995
9.2. Federal Acquisition Regulation (FAR) (e.g., subparts 6.2, 6.3, 8.4, 9.5)
9.3. Department of Defense FAR Supplement (DFARS) (e.g., subparts 208.405-70, 217.5, 218)
9.4. DoD Financial Management Regulation (DoDFMR) DoD 7000.14-R
9.5. Section 1535 of Title 31, United States Code, "Agency Agreements"
9.6. Section 322 of Title 40, United States Code, “Information Technology Fund”
9.7. General Accounting Office, Principles of Federal Appropriation Law, Volume I, GAO-04-261SP, January 2004
9.8. DoD Instruction 7041.3 “Economic Analysis for Decisionmaking,” November 7, 1995
9.9. Office of the Secretary of Defense Memorandum, “Proper Use of Non-DoD Contracts,” October 29, 2004
9.10. Under Secretary of Defense (Comptroller) Memorandum, “Non-Economy Act Orders,” October 16 2006
9.11. Under Secretary of Defense (Acquisition, Technology and Logistics) Memorandum, “Acquisition of Services Policy,” 2 October 2006
9.12. Under Secretary of Defense (Acquisition, Technology and Logistics) Memorandum, “Meeting Department of Defense Requirements Through Interagency Acquisition,” 31 October 2008
9.13.Office of Management and Budget, Office of Federal Procurement Policy, “Interagency Acquisition Guide,” June 2008
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