2024: The FAR - Federal Acquisition Regulations, Part 34

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2024 Webinar Series
THE FAR
THE FAR – PART 34

2024 Webinar Series
THE FAR
FAR PART #34:
Major System Acquisition
SPEAKER: Susan Warshaw Ebner
FIRM: Stinson LLP
EMAIL: susan.ebner@stinson.com

FAR PART 34
May 18, 2024

FAR PART 34 MAJOR SYSTEM ACQUISITION
⮚ What is a Major System?
⮚ Acquisition of a Major System Acquisition
⮚ Use of Title III Defense Production Act Testing and Qualification
⮚ Earned Value Management System

WHAT IS A MAJOR SYSTEM?
⮚ Combination of elements that will function together to produce the
capabilities required to fulfill a mission need
⮚ May include hardware, equipment, software, or a combination
⮚ Excludes construction or other improvements to real property
⮚ Civilian v. Defense agencies have different thresholds
⮚ Ultimately, the system will be designated a “major system” by the
head of the agency responsible for the system.

ACQUISITION OF A MAJOR SYSTEM
⮚ FAR part 34 governs acquisition of major systems
⮚ FAR 34.000 provides for acquisition consistent with OMB Circular A-109
and Earned Value Management System per OMB Circular A-11 part 7
⮚ NOTE: OMB Circular A-109 is no longer listed on White House website
⮚ OMB Circular A-11 part 7 includes appendices for scorekeeping, budget
treatment of lease-purchases and lease of capital assets, principles for
budgeting for capital asset acquisitions

⮚ Policy is to
⮚ Acquire a Major System in most effective, economical, and timely
manner
⮚ Promote innovation and full and open competition
⮚ FAR 34.001 Agency is to seek effective competition
⮚ Two or more contractors acting independently to ensure “Government
will be offered the lowest cost or price alternative or best technical
design meeting its minimum needs”
⮚ Do not assume this means they are seeking an LPTA award!

⮚ FAR 34.002 Policy also includes provision to sustain effective competition
between alternative systems, concepts and sources for as long as
“beneficial”
⮚ FAR 34.005-1(a) provides that “Foreign contractors, technology, and
equipment may be considered when it is feasible and permissible to do so”
⮚ Agencies are to develop the acquisition strategy tailored to the particular
program
⮚ Identify key decision points/officials responsible for making decisions
⮚ See next slide as example

https://acqnotes.com/wp-content/uploads/2014/09/Interactive-Lifecycle-Wall-Chart-Jan-18.pdf

ACQUISITION STRATEGY TO BE TAILORED TO PARTICULAR PROGRAM
⮚ Concept Exploration Contracts – Focus on refining proposed concept/reducing
technical uncertainties, includes exploration consistent with budget, promising nature of
approach, acceptable progress being made
⮚ Demonstration Contracts – Contractors to demonstrate; aim is to be in a position to
provide priced proposals, completely funded by the government, for full-scale
development
⮚ Full-Scale Development Contracts – Contractors submit priced proposals for
production based on the latest quantity, schedule, and logistics requirements.
⮚ Full Production Contracts – Acquisition of major systems successfully tested where
consistent with mission need and program objectives
⮚ Subsystem or Component Contracts – May mandate specification or standards

TESTING, QUALIFICATION AND USE OF “INDUSTRIAL RESOURCES”
DEVELOPED UNDER TITLE III, DEFENSE PRODUCTION ACT (DPA)
⮚ DPA may be used to “encourage expansion of production capacity and
supply of industrial resources essential to national defense”
⮚ Rated orders
⮚ “Industrial Resources”
⮚ What is a Title III “Industrial Resource?”
⮚ Materials, services, processes, or manufacturing equipment established
or maintained under authority of Title III of the Defense Production Act
⮚ Includes processes, technologies, and ancillary services for the use of
manufacturing equipment

⮚ Policies and procedures for testing, qualification, and use of industrial
resources manufactured or developed
⮚ Title III authorizes various forms of Government assistance to encourage
expansion of production capacity and supply of industrial resources
essential to national defense
⮚ Where a Title III Industrial Resource is identified, it is the policy of the
Government to pay for any testing and qualification required for use or
incorporation

⮚ What is a Title III Project Contractor –
⮚ A contractor that has received assistance for the development or
manufacture of an industrial resource
⮚ Refer request to Contracting Officer for testing and qualification of a Title
III industrial resource for approval
⮚ Contracting Officer will modify the contract and make an equitable
adjustment for cost of testing and qualification
⮚ Applicable FAR 52.234-1 clause, flows down to “every subcontract issued
in performance of the Title III contract.”

EARNED VALUE MANAGEMENT SYSTEM (EVMS)
⮚ Tool used to assess contractor’s progress in comparison to budgeted cost and
schedule (integrated baseline reviews (IBRs))
⮚ Required for Major Acquisitions for Development
⮚ OMB Circular A-11 Preparation, Submission, And Execution of the
Budget (Scoring, Budgeting, Funding, Color of Money) (current 8/23)
⮚ EVMS may also be required for other procurements
⮚ Where EVMS included, requirements apply to subcontractors
⮚ Plan to comply with ANSI/EIA-748 (current version at time of award)

INTEGRATED BASELINE REVIEW (IBR)
⮚ Where EVMS is required, Government may conduct an IBR to assess:
⮚ Contractor proposed plan’s ability to achieve scope of work
⮚ Whether time allocated can achieve identified project schedule milestones
⮚ Ability of Performance Management Baseline to execute the project and
attain cost of objectives
⮚ Adequacy of personnel, facilities, and equipment to perform tasks,
including major subcontractors
⮚ Effectiveness of management processes
⮚ Offeror must identify major subcontractors; Prime Contractor &
Government agree to subcontractors that are to apply EVMS guidelines

EVMS SOLICITATION PROVISIONS AND CONTRACT CLAUSES
⮚ FAR 52.234-2, Notice of Earned Value Management System-Preaward
Integrated Baseline Review
⮚ FAR 52.234-3, Notice of Earned Value Management System-Postaward
Integrated Baseline Review
⮚ FAR 52.234-4, Earned Value Management System
⮚ Other specific agency provisions, e.g.,
⮚ DFARS 252.234-7001 Notice of Earned Value Management System
⮚ DFARS 252.234-7002 Earned Value Management System

Some Takeaways
⮚ Major System Acquisitions aren’t typically simple or quick
⮚ Many different personnel and programs may be involved in just one buy
⮚ There are a lot of moving parts and approval processes
⮚ Knowing the way the system works can help you avoid missteps!

2024 Webinar Series
THE FAR
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2024 Webinar Series
THE FAR
THANK YOU FOR ATTENDING!
FAR PART #34:
SPEAKER: Susan Warshaw Ebner
FIRM: Stinson
EMAIL: susan.ebner@stinson.com

2024 Webinar Series
The FAR:
Federal Acquisition Regulations
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2024: The FAR - Federal Acquisition Regulations, Part 34

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2024: The FAR - Federal Acquisition Regulations, Part 34