PP.SP 1.1 Establish the Acquisition Strategy
Summary
Establish and maintain the acquisition strategy.
Description
The acquisition strategy is the business and technical management framework for planning, executing, and managing agreements for a project. The acquisition strategy relates to the objectives for the acquisition, the constraints, availability of resources and technologies, consideration of acquisition methods, potential supplier agreement types, terms and conditions, accommodation of business considerations, considerations of risk, and support for the acquired product over its lifecycle. The acquisition strategy reflects the entire scope of the project. It encompasses the work to be performed by the acquirer and the supplier, or in some cases multiple suppliers, for the full lifecycle of the product.
The acquisition strategy results from a thorough understanding of both the acquisition project and the general acquisition environment. The acquirer accounts for the potential value or benefit of the acquisition in the light of potential risks, considers constraints, and takes into account experiences with different types of suppliers, agreements, and terms. A well-developed strategy minimizes the time and cost required to satisfy approved capability needs, and maximizes affordability throughout the project lifecycle.
The acquisition strategy is the basis for formulating solicitation packages, supplier agreements, and project plans. The strategy evolves over time and should continuously reflect the current status and desired end point of the project.
Example Work Products
- Acquisition strategy
Subpractices
1. Identify the capabilities and objectives the acquisition is intended to satisfy or provide.
The capabilities describe what the organization intends to acquire. Typically, the capabilities included in the acquisition strategy highlight product characteristics driven by interoperability or families of products. The acquisition strategy also identifies dependencies on planned or existing capabilities of other projects or products.
The acquirer defines objectives in terms of cost, schedule, and performance. Performance related objectives are stated in terms of and key process, product, and service level measures and technical performance measures as defined in requirements. These measures reflect customer expectations and threshold values representing acceptable limits for key quality attributes (addressing, e.g., responsiveness, safety, reliability, and maintainability) that, in the customer’s judgment, provide the needed capability. While the number and specificity of measures can change over the duration of an acquisition, the acquirer typically focuses on the minimum number of measures that, if thresholds are not met, will require a re-evaluation of the project.
The acquisition strategy establishes the milestone decision points and acquisition phases planned for the project. It prescribes the accomplishments for each phase and identifies the critical events affecting project management. Schedule parameters include, at a minimum, the projected dates for project initiation, other major decision points, and initial operational capability.
- Research, development, test, and evaluation costs
- Acquisition costs
- Acquisition related operations, support, and disposal costs
- Total product quantity (to include both fully configured development and production units)
2. Identify the acquisition approach.
The acquirer defines the approach the project will use to achieve full capability, e.g., whether evolutionary or single step, and includes a brief rationale to justify the choice. When a project uses an evolutionary acquisition approach, the acquisition strategy describes the initial capability and how it will be funded, developed, tested, produced, and supported. The acquisition strategy previews similar planning for subsequent increments and identifies the approach to integrate or retrofit earlier increments with later increments.
- Actions a project team can take on its own if the acquiring organization has an acquisition, contracting, or purchasing department
- Who will prepare objective estimates and if these estimates are needed as evaluation criteria
- Managing multiple suppliers
- Anticipated lead times from potential suppliers to acquire items
3. Document business considerations.
Business considerations include the type of competition planned for all phases of the acquisition or an explanation of why competition is not practicable or not in the best interests of the acquirer. Also included are considerations for establishing or maintaining access to competitive suppliers for critical products or product components.
Availability and suitability of commercial items and the extent to which interfaces for these items have broad market acceptance, standards, organization support, and stability are other business considerations. Also included are considerations for both international and domestic sources that can meet the required need as primary sources of supply consistent with organizational policies and regulations.
- Product and technology areas critical to satisfying or providing the desired capabilities
- Data rights
- Product line considerations
- Socio-economic constraints
- Safety and health issues
- Security issues (physical and information technology)
- Other business oriented product quality attributes that can be market differentiators or mission critical (e.g., product responsiveness, platform openness, availability, sustainability)
4. Identify major risks and which risks will be addressed jointly with the supplier.
Major acquisition risks, whether primarily managed by the acquirer or supplier, should be identified and assessed by the acquirer. The acquisition strategy identifies major risks, which risks are to be shared with the supplier, and which are retained by the acquirer.
5. Identify the preferred type of supplier.
The acquirer identifies standardized acquisition documents (e.g., standard supplier agreements), if any. The acquirer also determines the preferred type of supplier agreement (e.g., firm fixed-price; fixed-price incentive, firm target; cost plus incentive fee; cost plus award fee) and the reasons it is suitable, including considerations of risk and reasonable risk sharing by the acquirer and supplier.
The acquisition strategy explains the planned incentive structure for the acquisition and how it encourages the supplier to provide the product or service at or below the established cost objectives and satisfy the schedule and key measurement objectives. Considerations should be given to using incentives to reduce primary project risks. If more than one incentive is planned for a supplier agreement, the acquisition strategy explains how the incentives complement one another and do not interfere with one another. The acquisition strategy identifies unusual terms and conditions of the planned supplier agreement and all existing or contemplated deviations to an organization’s terms and conditions, if any.
6. Identify the product support strategy.
The acquirer develops a product support strategy for lifecycle sustainment and continuous improvement of product affordability, reliability, and supportability, while sustaining readiness. The support strategy addresses how the acquirer will maintain oversight of the fielded product and ensure satisfaction of support related quality attributes.
If support is going to be performed by an organization different from the supplier, a sufficient overlap period should be defined to ensure smooth transition.
The acquirer’s sustainment organization or supplier typically participates in the development of the product support strategy.
7. Review and obtain agreement with senior management on the acquisition strategy.
The development of the acquisition strategy for a project typically requires senior management sponsorship. Appropriate senior management should approve the acquisition strategy before initiating a project.