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Technology Development

Budget Activity (BA)

A Budget Activity (BA) is a category within each appropriation and fund account that identify the purposes, projects, or types of activities financed by the appropriation or fund.

Below are the Budget Activities (BA) for Research, Development, Test, and Evaluation (RDT&E) accounts:
01 – Basic Research
02 – Applied Research
03 – Advanced Technology Development
04 – Advanced Component Development and Prototypes
05 – System Development and Demonstration
06 – RDT&E Management Support
07 – Operational System Development

Updated: 11/29/2017

Financial Management

Total Ownership Cost (TOC)

The Total Ownership Cost (TOC) is the summation of the cost of acquiring and owning or converting an item of material, piece of equipment, or service and post-ownership cost, including the disposal of hazardous and other manufacturing waste.  It also includes the cost of lost sales as a result of a reputation for poor product quality causes by defective materials or purchased services that are incorporated in the end product or service. [1]

Guide: Navy Total Ownership Cost Guidebook – Jun 14

DoD Definition: Total ownership cost includes the elements of a program’s life-cycle cost, as well as other related infrastructure or business processes costs not necessarily attributed to the program in the context of the defense acquisition system. Infrastructure is used here in the broadest possible sense, and consists of all military department and defense agency activities that sustain the military forces assigned to the combatant and component commanders. Major categories of infrastructure are support to equipment (acquisition and central logistics activities), support to military personnel (non-unit central [“school-house”] training, personnel administration and benefits, and medical care), and support to military bases (installations and communications/information infrastructure). [3]

The best time to reduce total ownership cost and program schedule is early in the acquisition process.

Reduce Total Ownership Cost (R-TOC) Program in the Department of Defense
The Department of Defense (DoD) wide effort to reduce total ownership costs (R-TOC) grew out of numerous reviews and discussions at Program Executive Officers/Systems Command (PEO/SYSCOM) Commanders’ conferences, the Defense Science Board, and others. The R-TOC program was established in response to longstanding concerns about the adverse impact of defense budgetary and operational trends on force structure and readiness. Declining procurement funds are resulting in a rapidly aging (and potentially inefficient and unsupportable) inventory. Rising operations and support (O&S) costs can consume higher portions of defense budget and leave even less available for modernization. [2]

The DoD focus on three (3) general R-TOC approaches:

  1. Reliability and maintainability (R&M) improvements
  2. Reduction of supply chain response time and reduction of logistics footprint
  3. Competitive product support


AcqLinks and References:

Updated: 7/20/2017

Program Management

Integrated Product and Process Development (IPPD)

Defense Acquisition System

Integrated Product and Process Development (IPPD) is the DoD management technique that simultaneously integrates all essential acquisition activities through the use of Integrated Product Teams (IPT) to optimize design, manufacturing, and supportability processes. IPPD facilitates meeting cost and performance objectives from product concept through production, including field support.  It evolved in industry as an outgrowth of efforts such as Concurrent Engineering to improve customer satisfaction and competitiveness in a global economy. [1]

The DoD defines IPPD as, “A management technique that integrates all acquisition activities starting with requirements definition through production, fielding/deployment and operational support in order to optimize the design, manufacturing, business and supportability processes.”

Guide: DoD Guide to Integrated Product and Process Development – 5 Feb 1996

The ten (10) tenets of IPPD can be summarized into the following fve (5) principles: [1]

  1. Customer Focus: It’s accomplished by including the customer in decision making and on multidisciplinary teams. Conducting tradeoff studies during the requirements definition and development processes also ensures that the design remains consistent with customer needs. The specific tradeoff analysis process that is focused on reducing and controlling life-cycle cost, while meeting the customer needs, is called Cost as an Independent Variable (CAIV).
  2. Concurrent Development of Products and Processes: It refers to the simultaneous development of the deliverable product and all of the processes necessary to make the product (development processes) and to make that product work (deliverable processes). These processes can significantly influence both the acquisition and life-cycle cost of the product.
  3. Early and Continuous Life-Cycle Planning: It’s accomplished by having stakeholders, representing all aspects of a product’s life-cycle, as part of the IPT.  Early life-cycle planning with customers, functional representatives, and suppliers lays a solid foundation for the various phases of a product and its processes. Key program activities and events should be defined so that progress toward achievement of cost-effective targets can be tracked, resources can be applied, and the impact of problems, resource constraints, and requirements changes can be better understood and managed. Early emphasis on life-cycle planning ensures the delivery of a system that will be functional, affordable, and supportable throughout a product’s life cycle.
  4. Proactive Identification and Management of Risk: It’s accomplished in many ways in the IPPD environment. By using the IPT teamwork approach, designers, manufacturers, testers and customers work together to ensure that the product satisfies customer needs. DoD endorses a risk management concept that is forward-looking, structured, informative, and continuous. The key to successful risk management is early planning and aggressive execution. IPPD is key to an organized, comprehensive, and iterative approach for identifying and analyzing cost, technical, and schedule risks and instituting risk-handling options to control critical risk areas. IPTs develop technical and business performance measurement plans with appropriate metrics to monitor the effectiveness and degree of anticipated and actual achievement of technical and business parameters.
  5. Maximum Flexibility for Optimization and Use of Contractor Approaches:  IPPD is a management approach, not a specific set of steps to be followed. The Government acquisition community recognizes that it must allow contractors the flexibility to use innovative, streamlined best practices when applicable throughout the program.

AcqLinks and References:

Updated: 5/31/2018

Contracts & Legal

Indefinite Delivery Contract

An Indefinite-Delivery Contract (Federal Acquisition Regulation (FAR) Subpart 16.5) provides various possible combinations of indefinite elements that provide the desired flexibility to best meet the Governments needs. The appropriate type of indefinite-delivery contract may be used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award. Pursuant to 10 U.S.C. 2304d and section 303K of the Federal Property and Administrative Services Act of 1949, requirements contracts and indefinite-quantity contracts are also known as delivery order contracts or task order contracts.

Website: FAR Subpart 16.5 “Indefinite-Delivery Contracts”

Website: DFARS Subpart 216.5 “Indefinite Delivery Contracts”

 There are three (3) types of indefinite-delivery contracts:

  1. Definite-quantity contracts
  2. Requirements contracts
  3. Indefinite-quantity contracts

(1) Definite-quantity Contracts
Description: A definite-quantity contract (FAR 16.502) provides for delivery of a definite quantity of specific supplies or services for a fixed period, with deliveries or performance to be scheduled at designated locations upon order.

(2) Requirements Contracts
Description: A requirements contract (FAR 16.503) provides for filling all actual purchase requirements of designated Government activities for supplies or services during a specified contract period, with deliveries or performance to be scheduled by placing orders with the contractor.

(3) Indefinite-quantity Contracts
Description: An indefinite-quantity (IDIQ) contract (FAR 16.504) provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period. The Government places orders for individual requirements. Quantity limits may be stated as number of units or as dollar values. Funds for the minimum amount of the contract are applied at that the time of award. Requirements above the minimum are then obligated on the contract when needed.     

Multiple Award Contracts
Multiple Award Contracts (FAR 16.504c) occur when a contracting agency awards two or more contracts from one solicitation for comparable supplies and services where the award to a single supplier would be impractical or fail to satisfy the total requirements.  The awards are for the same generic types of items at various points. However the following must be true:

  • There are two or more contractors able to provide the supply or service
  • The terms will be more favorable than a single contracts
  • It’s more cost effective considering the administrative cost
  • The requirements is severable and more than one contractor can accomplish the separate parts

– See Firm-Fixed Price Contract
– See Incentive Contract
– See Cost-Reimbursement Contract
– See Time and Materials Contract

 AcqLinks and References:

Updated: 6/1/2018

Contracts & Legal

Purchase Order (PO)

A Purchase Order (PO) (FAR Part 13.302) is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a PO to a supplier constitutes a legal offer to buy products or services. Acceptance of a PO by a seller usually forms a one-off contract between the buyer and seller, so no contract exists until the purchase order is accepted. A PO is usually issued on a fixed-price basis. [1,2]

Form: DD Form 1155 – Purchase Order

The PO is an award instrument used with the Request for Quotation (RFQ). The order is an offer by the Government to the supplier to buy certain supplies or services upon specific terms and conditions. The PO falls under the simplified acquisition procedures.

The contracting officer should always require written acceptance of the PO by the contractor when binding a PO between the government and contractor.

There are two types of POs:

  1. Unilateral PO: The most common type issued. The Contracting Officer signs a PO and sends it to the Vendor for acceptance. The Government’s offer is accepted when the Vendor delivers, performs, or exhibits an intention to perform.
  2. Bilateral PO: Signed by both the Contracting Officer and the Vendor. The Government’s offer is accepted when the Vendor signs the PO, creating a legally binding contract requiring the Vendor to perform per the terms and conditions of the contract. The advantage of a bilateral PO is that it provides legal rights to the Government in the event the Vendor fails to perform.

Typical steps in issuing a Purchase Order:

  1. Preparation of Request for Quotation (RFQ) (Standard Form 18 – Request for Quotation)
  2. Publication of RFQ
  3. Submission of quotations
  4. Evaluation of quotations
  5. Development of informal competitive range
  6. Discussion/negotiations if necessary
  7. Issue purchase order
  8. Process Debriefing if requested and protests
  9. Contractor accepts by performance or by signing or returning the purchase order

Purchase orders shall: [2]

  • Include any trade and prompt payment discounts that are offered, consistent with the applicable principles at (FAR Part 14.408-3)
  • Specify f.o.b. destination for supplies to be delivered within the United States, except Alaska or Hawaii, unless there are valid reasons to the contrary; and
  • Provide for inspection as prescribed in FAR Part 46 “Quality Assurance” (see Quality Assurance)
  • Contain a determinable date by which delivery of the supplies or performance of the services is required;
  • Specify the quantity of supplies or scope of services ordered;

Terms and Conditions. Where market research has determined that the requirement is not a commercial item, the Contracting Officer should include those terms and conditions found in FAR 13.302 . Where market research has determined that the requirement is a commercial item, the Contracting Officer should include those terms and conditions found in FAR Part 12 . Unless otherwise directed, clauses appropriate to the PO should be incorporated by reference. Clauses that are required for all other than commercial POs may be found in FAR 13.302-5. The following clauses may be used in POs, as applicable:

  • FAR 52.211-17 – Delivery of Excess Quantities. This clause may be incorporated by reference and should be used in all POs for supplies. (POs for commercial items may be modified to include this clause.) This clause provides that if the Contractor delivers a quantity of supplies in excess of that specified in the order (unless within allowable variation, if any) the Government will keep such excess supplies up to $250 in value without repaying the Contractor. The clause states that quantities in excess of $250 will, at the option of the Government, be returned to the Contractor at the expense of the Contractor or retained and paid for by the Government at the contract price.
  • FAR 52.211-5 – Material Requirements. This clause applies when the solicitation/order for supplies requires the use of new material and for any services that may involve the incidental furnishing of parts.
  • FAR 52.213-2 – Invoices. This clause is required to be included in POs that authorize advance payments for subscriptions or other charges for newspapers, magazines, periodicals or other publications (i.e., any publication printed, microfilmed, photocopied or magnetically or otherwise recorded for auditory or visual usage).
  • When the cost of GFP to be repaired does not exceed the SAT, POs for property repair need not include a Government Property Clause. Government Property Clauses may be used whenever the Contracting Officer considers them appropriate. Refer to FAR 45.106 for applicable Government Property Clauses.

AcqLinks and References:

Updated: 7/18/2017

Contracts & Legal

Uniform Commercial Code

The Uniform Commercial Code (UCC) is a uniform acts that governs the law of sales and other commercial transactions in all 50 states within the United States of America. The UCC deals primarily with transactions involving personal property.

The Code, as the product of private organizations, is not itself the law, but only a recommendation of the laws that should be adopted in the states. Once enacted by a state, the UCC is codified into the state’s code of statutes. A state may adopt the UCC verbatim or a state may adopt the UCC with specific changes. [1]

The UCC is a starting point to understanding DoD contacting. Article 2 “Sales” covers contract types and methods that are similar to Federal Acquisition Regulations (FAR).

The UCC is composed of nine articles:


  • Understanding the UCC will allow you to understand DoD contracts and the FAR better.

AcqLinks and References:

Updated: 7/18/2017

Contracts & Legal

Contract Data Requirements List (CDRL)

DD Form 1423 “Contract Data Requirements List (CDRL)”

The Contract Data Requirements List (CDRL) is a list of authorized data requirements for a specific procurement that forms part of a contract. It is comprised of either a single DD Form 1423, or a series of DD Forms 1423 containing data requirements and delivery information. The CDRL is the standard format for identifying potential data requirements in a solicitation, and deliverable data requirements in a contract. DFAR Subpart 215.470 requires the use of the CDRL in solicitations when the contract will require delivery of data.

Form: DD Form 1423 – Contract Data Requirements List (CDRL)

CDRLs should be linked directly to Statement of Work (SOW) tasks and managed by the Program Management Office (PMO) data manager. Data requirements can also be identified in the contract via Special Contract Clauses (e.g., Defense Federal Acquisition Regulations Supplement (DFARS)), which define special data provisions (such as, Rights in Data, Warranty, etc.).

The purpose of the CDRL is to provide a standardized method of clearly and unambiguously delineating the Government’s minimum essential data needs. The CDRL groups all of the data requirements in a single place rather than have them scattered throughout the solicitation or contract.

Data Item Description (DID)
A DID is a completed document that defines the data required of a contractor and is included in a CDRL. The document specifically defines the data content, format, and intended use. There are standard DIDs for all topics that can be found in the ASSIST Database by entering their 5-digit DID number or searching for them by inputting “DI” into ASSIST – Quick Search.

Q. Is there a website that lists all data item descriptions?
A. All active and canceled DIDs are indexed in the ASSIST database. Once logged on, to print a preformatted listing of all DIDs in Adobe PDF format, click on the [DIDs] link on the left side of the page to get to the [DIDs Menu] and then click on the link for the [DIDs Browser]. The DIDs Browser allows you to generate a list of active DIDs, canceled DIDs, or all DIDs (both active and canceled). This same screen allows you to filter results by standardization area, preparing activity, or preparing service, or to search for DIDs by keywords. The resultant list will be generated in HTML but may be saved as a preformatted report in Adobe PDF format by clicking on the [Report] button at the bottom of the screen. The list may also be exported in Microsoft Excel format by clicking on the [Spreadsheet] button at the bottom of the screen. (Note: If you have never before used ASSIST, you’ll first need to register for a user account and password.)
Q. Where can I find an online copy of DoD 5010.12-L, “Acquisition Management Systems and Data Requirements Control List (AMSDL)”?
A. The AMSDL which formerly listed all DIDs, was canceled in 2007, as all DIDs have been incorporated into the ASSIST database.


AcqLinks and References:

Updated: 8/13/2018

Contracts & Legal

Contract Funds Status Report (CFSR)

CFSR ImageThe Contract Funds Status Report (CFSR) supplies funding data about defense contract to government Program Managers (PM). The data is provided on DD Form 1586 is applicable to contracts over 6 months in duration.  Data provided to the PM from the contractor includes: [1]

  • Updating and forecasting contract funds requirements;
  • Planning and decision making on funding changes in contracts
  • Developing funds requirements and budget estimates in support of approved programs
  • Determining funds in excess of contract needs available for deobligation
  • Obtaining rough estimates of termination costs
  • Determining if sufficient funds are available by fiscal year to execute the contract


Form: DD Form 1586 ” Contract Funds Status Report” – Aug 96

Submit to: Earned Value Management Central Repository (EVM-CR)

The CFSR is not applied to Firm Fixed Price (FFP) contracts unless unusual circumstances require specific funding visibility.

CFSR Tailoring
The Program Managers (PM) should tailor the CFSR reporting requirements to ensure that only those parts of the CFSR that are essential to the management of the contract are required to be submitted.This is accomplished by providing specific instructions in Block 16 of the Contract Data Requirements List (CDRL) item for the CFSR. Tailoring is defined as deleting requirements from the Data Item Description (DID). Requiring more information than specified in the DID is prohibited by DoD regulation. All negotiated reporting provisions will be specified in the contract’s CDRL.

Data Item Description (DID) Requirements
DID DI-MGMT-81468 is used to obtain the CFSR. The contracting officer and contractor should negotiate reporting provisions in the contract, including level of detail and reporting frequency. The CFSR for all Acquisition Category I programs is submitted directly to the Earned Value Management Central Repository (EVM-CR) by the reporting contractors.  See the EVM-CR Manual for additional guidance on the CR requirements. [1]


  • The use of a standard electronic data exchange format is required for all reports unless disclosure of this information would compromise national security.

AcqLinks and References:

Updated: 6/3/2020

Contracts & Legal

Blanket Purchase Agreement (BPA)

A Blanket Purchase Agreement (BPA) is a simplified method of filling anticipated repetitive needs for supplies or services by establishing “charge accounts” with qualified contractors.  BPAs should be established for use by an organization responsible for providing supplies for its own operations or for other offices, installations, projects, or functions. The use of BPAs does not exempt an agency from the responsibility for keeping obligations and expenditures within available funds and executed in accordance with Federal Acquisition Regulation (FAR) 8.405-3.

The following are circumstances under which contracting professionals may establish BPAs:

  • There are a wide variety of items in a broad class of supplies or services that are generally purchased, but the exact items, quantities, and delivery requirements are not known in advance and may very considerably.
  • There is a need to provide commercial sources of supply for one or more offices or projects in a given area that do not have or need authority to purchase otherwise.
  • The use of this procedure would avoid the writing of numerous purchase orders.

The General Services Administration (GSA) offers BPS for supplies and services to government agencies under any GSA Schedule contract. GSA Schedules simplify the filling of recurring needs for supplies and services, while leveraging ordering activities’ buying power by taking advantage of quantity discounts, saving administrative time, and reducing paperwork.

Benefits and Advantages of BPAs [1]

BPAs offer an excellent option for federal agencies and Schedule contractors alike, providing convenience, efficiency, and reduced costs. Contractual terms and conditions are contained in GSA Schedule contracts and are not to be re-negotiated for GSA Schedule BPAs. Therefore, as a purchasing option, BPAs eliminate such contracting and open market costs as the search for sources, the need to prepare solicitations, and the requirement to synopsize the acquisition. BPAs also:

  • Provide opportunities to negotiate improved discounts
  • Satisfy recurring requirements
  • Reduce administrative costs by eliminating repetitive acquisition efforts
  • Permit ordering activities to leverage buying power through volume purchasing
  • Enable ordering activities streamlined ordering procedures
  • Permit ordering activities to incorporate Contractor Team Arrangements (CTAs)
  • Reduce procurement lead time
  • Permit ordering activities the ability to incorporate terms and conditions not in conflict with the underlying contract.

Federal Acquisition Regulation (FAR) 13.303 for BPAs:

  • 13.303-2 Establishment
  • 13.303-3 Preparation
  • 13.303-4 Clauses
  • 13.303-5 Purchases
  • 13.303-6 Review procedures
  • 13.303-7 Completion
  • 13.303-8 Optional clause

BPA Invoices / Payments

  1. The Vendor must submit an invoice directly to the Comptroller on an at-least-monthly basis. The Contracting Officer must obtain agreement from the Vendor on the method of invoicing to be used and the Vendor’s invoicing (billing) period before establishing a BPA. The three methods of invoicing are:
    1. Summary: Lists individual ticket numbers, each call number placed under the BPA, amounts, and total amount due. If used, must contain delivery tickets covered and their dollar value, and delivery tickets or sales slips supported with signature indicating the materials have been received.
    2. Itemized: Items are listed by applicable delivery ticket and number.
    3. Individual: An invoice is submitted for each delivery
  2. The Contracting Officer (or designated representative) must submit a copy of each sales slip or delivery ticket with the monthly call sheet to the Comptroller for obligation and receipt purposes when hard copies are used. When using electronic generated forms, electronic call sheets without delivery or sales slips can be submitted.

AcqLinks and References:

Updated: 6/1/2018

Contracts & Legal

Buy American Act

The Buy American Act (BAA) (41 U.S.C.10a – 10d) was passed in 1933 and restricts the purchase of supplies that are not domestic end products. It applies to all U.S. federal government agency purchases of goods valued over the purchase threshold, but does not apply to services. Under the Act, all goods for public use (articles, materials, or supplies) must be produced in the U.S., and manufactured items must be manufactured in the U.S. from U.S. materials. The BAA uses a two-part test to define a domestic end product.

  1. The article must be manufactured in the United States
  2. The cost of domestic components must exceed 50 percent of the cost of all the components
  3. Unmanufactured products mined or produced in the United States

DoD has issued a final rule amending DFARS 252.225-7000 and 252.225-7001 provision and clause which includes a partial waiver to the two part test. The waiver allows a Commercial Off-The-Shelf (COTS) item to be treated as a domestic end product if it is manufactured in the U.S., without tracking the origin of the item’s components.

Exceptions that allow the purchase of a foreign end product are listed at FAR 25.103 and DFARS 225.103. Under certain conditions, federal and/or DoD procurements may be waived:

  • Public Interest: The head of the agency determines that a domestic preference would be inconsistent with the public interest. This exception applies when an agency has an agreement with a foreign government that provides a blanket exception to the Buy American Act. DoD currently has the following agreements: World Trade Organization Government Procurement Agreement (WTO GPA), Free Trade Agreements (FTAs) with various countries (including Caribbean Basin Trade Initiative (CBTI)), Memorandum of Understandings (MOUs) with Qualifying Countries listed in DFARS 225.872 and North American Free Trade Agreement (NAFTA).
  • Non-availability: BAA does not apply with respect to articles, materials, or supplies not mined, produced, or manufactured in the U.S. in sufficient and reasonable available commercial quantities and of a satisfactory quality. FAR 25.104 and DFARS 225.104 list articles determined to be non-available.
  • Unreasonable Costs: If purchasing the material domestically would burden the government with an unreasonable cost. The unreasonable cost exception is implemented through the use of an evaluation factor applied to low foreign offers. The Contracting Officer may determine unreasonable cost in accordance with FAR 25.105/Subpart 25.5 and DFARS 225.105/Subpart 225.5.
  • Resale: The contracting officer may purchase foreign end products specifically for commissary resale.
  • Information Technology that is a commercial item.

AcqLinks and References:

Updated: 6/1/2018