A123 Guidelines

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET

WASHINGTON, D.C. 20503
OFFICE OF FEDERAL
PROCUREMENT POLICY
May 21, 2008
MEMORANDUM FOR CHIEF ACQUISITION OFFICERS
FROM: Paul A. Denett

Administrator
SUBJECT: Conducting Acquisition Assessments under OMB Circular A-123
The purpose of this memorandum is to provide guidelines for conducting entity level
internal control reviews of the acquisition function as required by Office of Management and
Budget (OMB) Circular A-123. OMB Circular A-123, Management’s Responsibility for Internal
Control, requires agency managers to continuously monitor and improve the effectiveness of
internal control associated with their programs. The guidelines include a template to provide a
standard approach for conducting the entity level acquisition reviews required under the Circular.
See section I of the Circular and sections III.B and C of Appendix A. The guidelines also require
agencies to integrate their assessment efforts with existing agency internal control processes and
practices to ensure the coordinated establishment, assessment and correction of internal controls
for acquisition.
In 2005, the Government Accountability Office (GAO) developed a framework to promote

“top-down” assessments of strengths and weaknesses of the acquisition function at federal agencies.
(See Framework for Assessing the Acquisition Function at Federal Agencies (framework), GAO-
05-218G, September 2005, accessible at http://www.gao.gov/new.items/d05218g.pdf.) The
framework consists of four interrelated “cornerstones”: (1) organizational alignment and
leadership, (2) policies and processes, (3) human capital and (4) information management and
stewardship. Each of these cornerstones has a direct influence on the extent to which the
acquisition function is efficient, effective and accountable to the taxpayer.
A number of agencies, including the Departments of Defense, Energy, Homeland Security,

Interior and Treasury, have successfully incorporated evaluation and analysis of the four
cornerstone areas into their acquisition and program management reviews, self-assessments and
other internal control-related review and survey practices. By assessing an acquisition program
from the perspective of each cornerstone, an agency can more clearly identify the sources and
reasons for performance gaps. Equally important, the agency can bring all affected stakeholders
together to develop a clear definition of success and steps to achieving success, including a
corrective action plan to close performance gaps.
2
The Office of Federal Procurement Policy (OFPP), in consultation with the Chief
Acquisition Officers Council, has developed the attached guidelines and template to standardize
the approach agencies use to assess internal control over acquisition activities and programs. The
template is based largely on the GAO’s framework and is intended to be flexible and scalable. The
guidelines assist Chief Acquisition Officers (CAOs) in establishing and maintaining effective and
efficient internal control as required by OMB Circular A-123 and ensure assessments of agency
acquisition activities are integrated with agencies’ existing internal control processes and practices
and support, as appropriate, annual assurance statements required by the Circular.
Agencies identified in the Chief Financial Officers (CFO) Act are required to use the
template for acquisition and program management reviews conducted during the FY 2009
internal control review and reporting cycle and thereafter. Although full implementation and use
of the template is required in FY 2009, agencies are strongly encouraged to use the template
during the remainder of FY 2008. Agencies not identified in the CFO Act are strongly
encouraged to incorporate the template, as appropriate, into their acquisition and program
management review process. This integration will contribute to a more holistic assessment of
agency acquisition activities and minimize duplication of effort. Use of the template will also
help CAOs in carrying out their responsibilities under section 1421 of the Services Acquisition
Reform Act, 41 U.S.C. 414, to monitor the performance of acquisition activities and acquisition
programs.
By Thursday, July 31, 2008, CAOs in CFO Act agencies shall provide the OFPP
Administrator with their agency-specific implementation plans for the template’s use during the
current and subsequent reporting cycles, as appropriate. Implementation plans should address
each of the agency responsibilities listed in paragraph 5 of the attached guidelines. To facilitate
development and implementation of the template, agencies should identify a responsible point of
contact and provide the name, title, telephone number, and e-mail address of the person to
Curtina O. Smith at OFPP by Wednesday, June 11, 2008.
I appreciate your attention to this matter as well as your ongoing efforts to improve the
effectiveness and efficiency of acquisition activities. I am confident that use of the template will
result in more thorough and complete acquisition review processes. You need to know what is
working and what improvements you need to make to ensure your acquisition function is strong
to support your agency’s mission. Questions regarding this memorandum and the template
should be directed to Ms. Smith at (202) 395-3301, e-mail: csmith@omb.eop.gov.
Attachment
cc: Senior Procurement Executives

Chief Financial Officers
Chief Information Officers
Performance Improvement Officers
Danny Werfel, Acting Controller, Office of Federal Financial Management
Karen Evans, Administrator, Office of E-Government and Information Technology
Robert Shea, Associate Director for OMB Administration and Government Performance
Guidelines for
Assessing the Acquisition Function
May 2008
Executive Office of the President
Office of Management and Budget
Office of Federal Procurement Policy
TABLE OF CONTENTS
GUIDELINES FOR ASSESSING THE ACQUISITION FUNCTION

This section discusses the purpose of the template and the requirements for its use when conducting
required reviews of the acquisition function.
PURPOSE ........................................................................................................................1
AUTHORITY ..................................................................................................................1
BACKGROUND .............................................................................................................1
GUIDING PRINCIPLES .................................................................................................2
AGENCY RESPONSIBILITIES .....................................................................................3
DEFINITIONS.................................................................................................................3
APPENDIX 1: ACQUISITION ASSESSMENT TEMPLATE…..…….…………5

This appendix describes the format of the template and how to use it to conduct reviews of the
acquisition function.
APPENDIX 2: SUPPLEMENTARY INFORMATION….....…………..…………..40

This appendix provides supplementary information regarding the purpose of each cornerstone,
element and critical success factor in the template.
APPENDIX 3: RESOURCES & REFERENCES………..………………………….51

GUIDELINES FOR ASSESSING THE
ACQUISITION FUNCTION
1. PURPOSE
The purpose of these guidelines is: (a) to standardize entity level internal control reviews of
agency acquisition functions that are required by Office of Management and Budget (OMB)
Circular A-123 through use of an acquisition assessment template (See Appendix 1) and (b) to
integrate entity level acquisition reviews into agencies’ existing internal control review and
reporting processes that are used to support annual OMB Circular A-123-related assurance
statements, as appropriate.
2. AUTHORITY
The guidelines are based on the following authorities:
Federal Managers’ Financial Integrity Act of 1982 (FMFIA) (31 U.S.C. 3512)
FMFIA requires the heads of executive agencies to establish internal accounting and
administrative controls to reasonably ensure, among other things, that assets are safeguarded
against waste, loss, and misuse.
OMB Circular A-123, Management's Responsibility for Internal Control

OMB Circular A-123 implements FMFIA and makes agency management responsible for
establishing and maintaining internal control to achieve the objectives of effective and efficient
operations, reliable financial reporting, and compliance with applicable laws and regulations.
The circular applies not only to accounting and financial management, but also to program,
operational, and administrative areas. (See Section I of OMB Circular A-123) The circular
addresses evaluation of internal control at the entity level as well as transactional or process
level.
Services Acquisition Reform Act (SARA) of 2003 (41 U.S.C. 414)

SARA requires agency Chief Acquisition Officers (CAOs) to monitor the performance of
acquisition activities and acquisition programs, evaluate the performance of those programs on
the basis of applicable performance measurements, and advise the agency regarding the
appropriate business strategy to achieve the mission of the agency.
3. BACKGROUND
Agencies conduct internal control reviews of acquisition and program management in a variety
of ways, such as through self-evaluations, surveys and transaction reviews. Many reviews do
not give sufficient attention to those factors that have the greatest influence on the efficiency
and effectiveness of the acquisition function.
MAY 2008 Page 1 of 52

GUIDELINES FOR ASSESSING THE ACQISITION FUNCTION
The guidelines provide a template to help agencies conduct a comprehensive and standardized
assessment for entity level reviews. The template has been adopted from the Government
Accountability Office (GAO) Framework for Assessing the Acquisition Function at Federal
Agencies (framework) (GAO-05-218G) and consists of four interrelated areas, i.e. cornerstones,
that are essential to an efficient, effective and accountable acquisition process: (1)
organizational alignment and leadership; (2) policies and processes; (3) human capital; and (4)
information management and stewardship. These four areas are most material to effective
mission support. Concentrating review in the four cornerstone areas will assist senior
management and accountable organizations in identifying areas requiring greater management
attention and/or more focused follow-up work. It will also contribute to a more holistic
assessment of the acquisition function and better inform CAOs in evaluating appropriate
business strategies to achieve agency missions.
Entity level reviews conducted using the template are designed to be easily aligned and
integrated into agencies’ existing internal control review processes under OMB Circular A-123.
OMB Circular A-123 provides guidance to Federal managers on improving the accountability
and effectiveness of Federal programs and operations by establishing, assessing, correcting, and
reporting on internal control. Under Circular A-123, agencies: (1) perform risk assessments on
a defined control environment and implement control activities; (2) develop corrective action
plans for material weaknesses and other significant deficiencies in the design or operation of
internal controls; (3) track progress on corrective action plans; (4) incorporate material
weaknesses in annual assurance statements in accordance with FMFIA; and (5) report the
material weaknesses Performance and Accountability Reports prepared for OMB and Congress.
The Circular also calls for ongoing communications between managers and other stakeholders
to build and sustain support for an effective control environment.
Traditionally, OMB Circular A-123 assessments have focused resources on accounting and
financial management systems within agencies. Use of the template will enable agencies to
leverage existing resources by implementing an integrated management approach to internal
control that focuses equally on the financial, program, operational and administrative functional
areas of an agency, including acquisition.
4. GUIDING PRINCIPLES
To enhance the quality of entity level acquisition reviews, agencies must ensure assessments
required by OMB Circular A-123 are consistent with the following guiding principles.
Standardization. As part of their responsibility for monitoring the performance of acquisition

activities and programs required by SARA, and as managers under OMB Circular A-123,
CAOs must employ a standardized assessment methodology that, at a minimum, includes
consideration and evaluation of acquisition activities and programs in the template’s four
cornerstone areas. CAOs must use the template to evaluate the acquisition function as part of
the internal control assessments conducted at the entity level.
Integration. CAOs must integrate entity level assessments of the acquisition function into
agencies’ existing internal control review and reporting processes established pursuant to
Circular A-123. Accordingly, activities conducted pursuant to these guidelines shall support the
establishment, assessment, and correction of internal controls for acquisition. In addition,
CAOs shall collaborate with other responsible senior officials within their agency, as necessary
and appropriate and in accordance with agency policy, to consider whether the results of an

acquisition assessment need to be addressed in an annual assurance statement required by the

Circular.
5. AGENCY RESPONSIBILITIES
The agency CAO, or equivalent, in collaboration with the Chief Financial Officer (CFO), and in
accordance with agency internal control policy and processes is responsible for:
Determining the scope of the acquisition assessment, i.e., those acquisition activities and
programs to be covered by the assessment;
Ensuring that assessment objectives are clearly communicated throughout the

agency/component;
Ensuring that assessments are adequately document and carried out in a thorough, effective,
and timely manner;
Incorporating the template into the design, methodology and format of the assessment;
Determining the frequency of reviews/assessments based on risk;
Ensuring that adequate policies and methods are in place to document the assessment
design, methodology and results;
Analyzing the results of testing and assessment;
Reporting on the results of the assessment in accordance with existing agency internal
control directives;
Developing and implementing corrective actions for identified deficiencies;
Monitoring the progress of corrective action implementation; and
Updating the Office of Federal Procurement Policy (OFPP) on corrective actions taken to
address weaknesses or deficiencies identified as a result of assessments.
6. DEFINITIONS
Acquisition. Acquisition means the process of acquiring, with appropriated funds, by contract
for purchase or lease, property or services (including construction) that support the mission and
goals of an executive agency, from the point at which the requirements of the executive agency
are established in consultation with the CAO of the executive agency; and include:
the process of acquiring property or services that are already in existence, or that must be
created, developed, demonstrated, and evaluated;
the description of requirements to satisfy agency needs;
solicitation and selection of sources;
award of contracts;
contract performance;

contract financing;
management and measurement of contract performance through final delivery and payment;
and
technical and management functions directly related to the process of fulfilling agency
requirements by contract. See Section 1411 of the Services Acquisition Reform Act (P.L.
108-136)
Acquisition workforce. The acquisition workforce includes individuals who perform various
acquisition-related functions to support the accomplishment of the mission of an agency,
including requirements definition, measurement of contract performance, and technical and
management direction. See OFPP Policy Letter 05-01, Developing and Managing the
Acquisition Workforce, April 15, 2005.
Control activities. Control activities include policies, procedures and mechanisms in place to
help ensure that agency objectives are met. Several examples include: proper segregation of
duties (separate personnel with authority to authorize a transaction, process the transaction, and
review the transaction); physical controls over assets (limited access to inventories or
equipment); proper authorization; and appropriate documentation and access to that
documentation. See Section II of OMB Circular A-123
Control deficiency. Exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. See Section IV of OMB Circular A-123
Internal controls. Internal controls are the organization, policies, procedures, actions, and
activities that management implements to achieve results and safeguard the integrity of their
programs. Internal control is an integral component of an organization’s management that
provides reasonable assurance that the following objectives are being achieved:
effectiveness and efficiency of operations;
reliability of financial reporting; and
compliance with applicable laws and regulations.
Internal controls may be assessed at the entity level as well as at the process, transaction, or
application level. Entity level refers to the highest organizational level in which the internal
controls have an overarching or pervasive effect on the agency. Specific areas of internal
control that should be evaluated at the entity level include the control environment, risk
assessment, control activities, information and communication, and monitoring. See OMB
Circular A-123

APPENDIX 1: ACQUISITION ASSESSMENT
TEMPLATE
OVERVIEW
The acquisition assessment template is designed to help agencies conduct comprehensive and
standardized assessments of the effectiveness of agency acquisition functions. The template
is comprised of cornerstones, elements, critical success factors and assessment guideposts.
Agencies must use the template for entity level reviews and may use the template for other
reviews at their discretion.
Cornerstones
The template consists of four interrelated cornerstones: (1) organizational alignment and
leadership; (2) policies and processes; (3) human capital; and (4) information management
and stewardship. The cornerstones represent the broad areas that have the greatest impact on
the efficiency and effectiveness of the acquisition function. The four cornerstones lay the
foundation for assessing and evaluating the acquisition function.
Elements and Critical Success Factors
Each of the template’s four cornerstones is broken down into elements. Each identified
element is integral to effective stewardship at an organization and is dependent on a number
of critical success factors. Critical success factors focus on outcomes, program results and
mission accomplishment and collectively contribute to defining success for the associated
element and, ultimately, the cornerstone. Conversely, deficiencies in, or the absence of
critical success factors, increases risk and the need for greater attention by management. The
presence of critical success factors enhances the likelihood of achieving desired outcomes.
Assessment Guideposts
The template provides assessment guideposts to help reviewers discover whether
organizations are employing critical success factors. Each guidepost consists of a series of
critical questions, indicators of success and indicators of potential weaknesses.
Consider: Look for: Beware of:
z What to ask when + Indicators of practices ↓ Indicators of practices
trying to identify the and activities that and activities that hinder
presence or absence of facilitate good good acquisition outcomes.
critical success factors. acquisition outcomes.
The assessment guideposts are a starting point for analysis and may be supplemented to
consider agency-specific programs, processes and/or initiatives. Reviewers may also wish to
consider questions from the GAO framework, as appropriate.
The cornerstones, elements and critical success factors that make up the template are
summarized in the Template Roadmap on the following page. Page numbers have been
included as a quick reference to locate the cornerstones, elements and assessment guideposts
for each critical success factor in the template. Supplementary information on the
cornerstones, elements and critical success factors can be found in Appendix 2. Additional
resources are listed in Appendix 3.
APPENDIX 1 ACQUISITION ASSESSMENT TEMPLATE
TEMPLATE ROADMAP
CORNERSTONES ELEMENTS CRITICAL SUCCESS FACTORS
I. Organizational A. Aligning Acquisition with 1. Assuring Appropriate Placement of the Acquisition Function (pg. 7)
Alignment and Agency Mission and Needs 2. Organizing the Acquisition Function to Operate Strategically (pg. 8)
Leadership (pg. 7)
(pg. 7) 3. Clearly Defining and Integrating Roles and Responsibilities (pg. 9)
B. Commitment from 1. Clear, Strong and Ethical Executive Leadership (pg. 10)
Leadership (pg. 10) 2. Effective Communications and Continuous Improvement (pg. 12)
II. Policies and A. Planning Strategically 1. Partnering with Internal Organizations (pg. 14)
Processes (pg. 14) 2. Assessing Internal Requirements and the Impact of External Events
(pg. 14) (pg. 15)
B. Effectively Managing the 1. Empowering of Cross-Functional Teams (pg. 17)

Acquisition Process 2. Managing and Engaging Suppliers (pg. 18)
(pg. 17)
3. Monitoring and Providing Oversight to Achieve Desired Outcomes
(pg. 20)
4. Enabling Financial Accountability (pg. 21)
C. Promoting Successful 1. Using Sound Capital Investment Strategies (pg. 23)

Outcomes of Major a. Integrating Organizational Goals into the Capital Decision-making Process
Projects (pg. 23) (pg 23)
b. Evaluating and Selecting Capital Assets Using an Investment Approach
(pg 25)
c. Balancing Budgetary Control and Managerial Flexibility (pg. 26)
2. Employing Knowledge-Based Acquisition Approaches (pg. 26)
III. Human Capital A. Valuing and Investing in 1. Commitment to Human Capital Management (pg. 28)
(pg. 28) the Acquisition Workforce 2. Role of the Human Capital Function (pg. 29)
(pg. 28)
B. Strategic Human Capital 1. Integration and Alignment (pg. 29)

Planning (pg. 29) 2. Data-Driven Human Capital Decisions (pg. 30)
C. Acquiring, Developing, 1. Targeted Investments in People (pg. 32)

and Retaining Talent 2. Human Capital Approaches Tailored to Meet Organizational Needs
(pg. 32) (pg. 33)
D. Creating Results-Oriented 1. Empowerment and Inclusiveness (pg. 33)

Organizational Cultures 2. Unit and Individual Performance Linked to Organizational Goals (pg.
(pg. 33) 34)
IV. Information A. Identifying Data and 1. Tracking Acquisition Data (pg. 35)
Management & Technology that Support 2. Translating Financial Data into Meaningful Formats (pg. 36)
Stewardship Acquisition Management
3. Analyzing Goods and Services Spending (pg. 37)
(pg. 35) Decisions (pg. 35)
B. Safeguarding the Integrity 1. Ensuring Effective General and Application Controls (pg. 38)
of Operations and Data 2. Data Stewardship (pg. 38)
(pg. 38)

APPENDIX 1 CORNERSTONE I
CORNERSTONE I: ORGANIZATION ALIGNMENT AND LEADERSHIP

This cornerstone focuses on two elements and five critical success factors that can be used to
assess the placement of an agency’s acquisition function, the effectiveness of its leadership and the
extent to which roles and responsibilities of stakeholders are clearly defined.
A. Aligning Acquisition with Agency Mission and Needs
1. Assuring Appropriate Placement of the Acquisition Function
CONSIDER LOOK FOR BEWARE OF
• Where is the acquisition function + The acquisition function ↓ Disconnects exist between
currently placed in the (including its competition where the acquisition
agency/component? advocate) has been assigned function is placed in the
• What are the roles and the appropriate degree of organization’s hierarchy
responsibilities of the acquisition responsibility and authority and its actual role in
function and acquisition for strategic planning, achieving the component’s
personnel? management, and oversight mission or supporting its
of the component’s operations.
• Is the acquisition function
fragmented?
purchases of goods and ↓ Lack of coordination
services, and this across the contracting
• Are staffing support, experience, responsibility is consistent activity results in
and effort applied to contract with the significance of redundancy, inconsistency,
formation and award balanced acquisition to the and an inability to leverage
with those needed for contract component’s and agency’s resources to meet common
administration? mission. or shared requirements.
• Is the acquisition function in a + Management views the ↓ The acquisition function is
position where it can plan and acquisition function as a viewed merely as an
provide strategic support to the strategic asset in support of administrative support
component and agency, e.g., core mission and business function rather than as a
does it maintain Centers of processes. business partner.
Excellence?
+ Management and staff view ↓ Organization managers and
• Is the acquisition function seen the acquisition function as a other stakeholders tend to
(and used) by management as a business partner rather than work around or circumvent
business partner in supporting a support function. standard acquisition
mission needs?
+ Acquisition of goods and processes/functions.
• Is the agency’s competition services is viewed from an ↓ The agency competition
advocate strategically positioned agency-wide perspective. advocate is not positioned
so that he/she may Acquisition is planned from where he/she may
independently review a corporate perspective independently review
requirements and question rather than on a transaction- requirements and question
impediments to competition? by-transaction/unit-by-unit impediments to
basis. competition.

CORNERSTONE I: ORGANIZATION ALIGNMENT & LEADERSHIP (CONTINUED)
2. Organizing the Acquisition Function to Operate Strategically

• Has the agency/component + The acquisition function’s ↓ Leadership lacks a clear
assessed the current structure of mission is well-defined and definition or understanding
the acquisition function and its goals and strategies are of the acquisition
related controls? If so, what consistent with and support function’s mission, goals,
were the results of the the agency’s overall mission. or strategies, and/or its
study/assessment? potential as a business
+ The acquisition workforce is
• Have there been recent or aware of the acquisition partner.
significant changes within the function’s mission, goals ↓ Acquisition workforce
component or agency affecting and strategies. lacks a consistent
its acquisition function that understanding of the
require adaptation/re-
+ The current structure of the
acquisition function has been acquisition function’s
organization/change, e.g., new mission, goals and
assessed and appropriate
mission requirements, changes strategies.
changes made in response to
in budget, workforce,
technology?
changes, such as in the ↓ The component and/or
mission, operating agency has not assessed or
• Does the agency/component environment, budget, made changes to the role of
have mechanisms to anticipate, workforce, or technology. the acquisition function in
identify, and react to risks response to significant
presented by changes in
+ Outcome-oriented
performance measures are changes.
conditions that can affect
agency-wide or acquisition-
used to assess the success of ↓ There is no continuous
the acquisition function. review or trend analysis to
related goals?
Measures are designed and ensure effectiveness and
• Does the agency/component used that gauge the efficiency of service
make appropriate use of contribution that the delivery.
technology and to reduce or
mitigate organizational
acquisition function makes ↓ Performance measures are
to support the not used to evaluate the
fragmentation? agency/component’s mission usefulness of the
• Is the number of contracting and goals. acquisition function to
officer warrants in the support sub-unit and
agency/component appropriate? agency-wide mission.
• Does support to field units
overly extend the central
contracting activity staff’s
workload?
• Could goods and services be
acquired more efficiently
through a more strategic or
corporate approach? Does the
agency/component take
advantage of Government-
wide/agency-wide strategic
sourcing opportunities?
• Are acquisition-related
performance plans and metrics
established, understood, and
realized in a consistent manner
within the organization?
• Does the acquisition staff see
itself as an active contributor to
agency mission support?

• Does the agency/component use

its strategic and annual
performance plan to document
the contribution that agency
officials expect the acquisition
function will make to the
agency’s mission, strategic
goals, and annual goals?
3. Clearly Defining and Integrating Roles and Responsibilities

• Are there organizational + Each stakeholder in the ↓ The role of the acquisition
“stovepipes” within the acquisition process has function is unclear.
organization and/or within its
acquisition function that inhibit
clearly defined roles and ↓ Acquisition and other
responsibilities. functional offices do not
effective coordination with
customers/stakeholders?
+ There is a shared clearly communicate and
understanding of each cooperate.
• Does the acquisition function
clearly understand and articulate
participant’s role in ↓ There is little integration of
acquisition activities. acquisition planning
its role and potential in
supporting mission-critical
+ Acquisition managers among the different entities
support the with a role in acquisitions.
functions to management,
program offices, and peers in
component/agency’s ↓ Conflicts among
strategic planning and stakeholders are left
finance, human capital,
decision-making needs. unresolved, thereby
information technology (IT) and
other disciplines? resulting in inefficient
operations.
• What are the roles and
responsibilities of stakeholders ↓ The acquisition office is
in the agency’s acquisition frequently bypassed in
process? component/agency
planning and decision-
• Are the acquisition function’s
making.
roles and responsibilities clear
and understood by its
customers/stakeholders, e.g.,
contracting officer’s role in
selecting the proper contractual
instrument and procurement
approach?
• How active is the acquisition
function in advance planning of
requirements?
• How are stakeholders held
accountable for their actions?
• Are organizational conflicts of
interest on the part of agency
contractors and subcontractors
avoided? Are there processes in
place to avoid them?

B. Commitment from Leadership
1. Clear, Strong, and Ethical Executive Leadership

• Does the agency have a CAO (or + The agency has a CAO (or ↓ There is no CAO (or
comparable position for non- comparable position for non- comparable position for
CFO Act agencies) who is CFO Act agencies). All non-CFO Act agencies) or
responsible for the agency’s levels of the acquisition the various levels of the
acquisition program and organization are aware of the acquisition organization
activities? CAO (or equivalent) and are not aware of who the
• Has senior leadership articulated his/her roles, responsibilities CAO (or equivalent) is and
a strategic, integrated and and expectations related to his/her roles,
agency-wide vision for the acquisition. responsibilities and
acquisition function? + Senior leadership provides expectations related to
• Is senior leadership actively direction and vision, acquisition.
involved in pursuing changes, if facilitates the development ↓ Senior leadership has not
appropriate, to how the of common processes and defined a common
agency/component acquires approaches and is involved direction or vision for the
goods and services? in identifying and assessing acquisition function.
• Are managers at all levels held risks associated with ↓ Senior leadership does not
accountable for their meeting acquisition continually support efforts
contributions to the acquisition objectives. to develop common
process? + Improvement initiatives processes and approaches.
• Does leadership promote involve stakeholders from ↓ Agency’s ethical tone is
integration and coordination across the agency or not articulated. Risk and
among the agency’s budgetary component. The CAO (or opportunity for unethical
processes and human capital, equivalent) promotes behavior are not identified
acquisition, and financial interdisciplinary and addressed.
communication and
management functions?
collaboration.
↓ Senior leadership has not
• Does management set a tone that comprehensively identified
recognizes the unique + Senior leadership promotes a and mitigated risks, e.g.
contributions that the acquisition strategic, integrated and through establishment and
function can make to component/agency-wide continuous monitoring of
agency/component decision- approach to acquisition, as internal controls.
appropriate.
making? ↓ Management does not have
• Are assignments and duties + Senior leadership and adequate resources and
properly separated? (The management set a positive support to implement
collateral duty environment may and supportive attitude common processes and
lend itself to a higher degree of toward internal control. approaches.
risk because clear lines of + Senior leadership and ↓ Agency personnel do not
responsibility or separation of management support understand the importance
functions is obscured.) monitoring to assess the of developing and
• Does component management quality of internal control implementing good
support agency-wide acquisition performance and to ensure internal controls.
that issues are promptly
initiatives?
resolved.
↓ The agency has not
• Does management have a established and
positive and supportive attitude + Senior leadership and implemented policies
towards internal control to management routinely assess communicating appropriate
identify and mitigate risk? risks the agency/component ethical standards, such as a
faces from external & code of conduct and/or
internal sources in relation to ethics training program.
acquisition objectives.

• Do internal control activities + Actions taken to address

exist at every level of the risks are effectively
acquisition function, e.g., in- implemented.
process quality control
techniques such as contracting
officer review, contract
clearance review, compliance
monitoring and oversight?
• Does management have an OMB
Circular A-123 plan that
includes a risk assessment?
• Does management require the
submission of annual work plans
prior to conducting program
/procurement management
reviews?
• Is the work plan coordinated
with the appropriate
stakeholders?
• Has agency/component
management recently reviewed
its key acquisition-related
internal controls? If so, what
were the results? Are all aspects
of the acquisition program
covered in the internal control
review?
• Does the oversight program
ensure that sample sizes are
representative of
agency/component
procurements, including
assessing all methods of
procurements? Does oversight
include all methods of
procurements, e.g. simplified
acquisitions, contracting by
negotiation and special
methods?
• Have there been any GAO, OIG,
or internal audits/reviews within
the last three years? If so, have
they been reviewed to ensure
that corrective action has been
implemented? Does review of
current transactions indicate that
the same findings are still
present?
• Are field level acquisition
activities reviewed in
accordance with agency policy?
• Are corrective action plans
developed, implemented and
actively monitored?

• Does management take a

proactive stance to correct any
deficiencies identified in its
acquisition-related internal
controls?
• Has the agency established and
implemented policies
communicating appropriate
ethical standards, such as a code
of conduct and/or ethics training
program?
2. Effective Communications and Continuous Improvement

• How does agency/component + Metrics used by leadership ↓ There is inadequate
leadership communicate the are targeted at demonstrating communication from
agency’s mission, values, and the impact and value of the leadership regarding the
guiding principles, as well as the acquisition function and effectiveness of the
vision and expectations for the provide useful feedback to acquisition function and
acquisition function to identify areas for how it supports the
agency/component personnel? improvement. component/agency’s
• Have agency/component + Management expectations mission.
personnel been asked for their for acquisition are clearly ↓ There is no mechanism in
views on the effectiveness of and periodically place for stakeholders to
communication? communicated within the provide suggestions for
• Does leadership facilitate and organization. improvements to the
support clear lines of + Processes are in place to acquisition process.
communication among all continuously gather ↓ Little change is made to
parties? stakeholder feedback acquisition processes based
• Are stakeholders asked for their regarding the effectiveness on the needs and concerns
views on the effectiveness of the of the acquisition process expressed by affected
existing acquisition process and and identify areas needing parties.
areas needing improvement? improvement. ↓ Internal control monitoring
• Are control activities (i.e. the + Revisions to processes (e.g. peer review,
policies, procedures and reflect appropriate checklists,
mechanisms) in place to address incorporation of affected procurement/program
or mitigate risk and to help parties’ needs and concerns. management reviews) does
ensure internal control + Control activities are an not occur in the course of
objectives are continuously met? integral part of the normal operations, is not
Are these control activities an component/agency’s performed continually or is
integral part of the planning, implementation, not ingrained in the
component/agency’s planning, review, and accountability operations of the
implementation & review of activities to ensure results contracting activity.
accountability activities to and proper stewardship of ↓ The agency/component has
ensure results and proper assets. inadequate policies,
stewardship of government procedures, techniques,
resources?
+ Control activities are
continuously monitored for and mechanisms in place to
• How actively are control their effectiveness at ensure effective
activities monitored for their ensuring acquisition implementation of agency
effectiveness at ensuring objectives are met. and component
acquisition objectives are met? management directives.

• What metrics does the ↓ The agency/component has

agency/component use to not implemented a program
demonstrate the impact and to continuously measure
value of the acquisition function and assess the performance
in supporting the mission of the of the acquisition function
agency/component? in supporting the
• What process does the component/agency’s
agency/component use to mission or achieving
develop these metrics? acquisition goals.
↓ Performance measures for
the acquisition function
have not been developed
and/or communicated.
↓ Performance measures are
in place but are not
consistently utilized or
communicated.
↓ Performance metrics are
not meaningful,
measurable or are
inconsistently understood
and applied within the

APPENDIX 1 CORNERSTONE II
CORNERSTONE II – POLICIES AND PROCESSES

This cornerstone focuses on three elements and eight critical success factors that can be used to
assess the effectiveness of the policies and processes of an acquisition function.
A. Planning Strategically
1. Partnering with Internal Organizations

• Do end-users of the goods and
services acquired work with the + Agency/component ↓ There is no early, active
acquisition office to discuss management has empowered and/or ongoing
requirements for meeting end- stakeholders and hold them involvement between
user needs? accountable for acquisition and
coordinating, integrating, stakeholders.
• Are Federal Procurement Data
System (FPDS) product/service
and implementing effective ↓ There is little evidence of
acquisition decisions. advance acquisition
and competition data (including
data related to the award of task + Acquisition planning and planning.
and delivery orders), small strategy development ↓ Stakeholders do not clearly
business program support the communicate their needs or
accomplishments, past component’s/agency’s work together to identify
performance evaluations, and mission rather than focus on solutions.
the needs of individual
other related information
units/transactions.
↓ Lack of integration across
reviewed to inform plans for the acquisition function
meeting end-user needs? + FPDS product/service and results in redundancy,
• Do stakeholders work together competition data (including inconsistency, and an
to develop a joint strategy for data related to the award of inability to leverage
acquisitions? task and delivery orders), resources to meet shared
small business program requirements.
• How receptive are stakeholders accomplishments, past
to evaluating different
performance evaluations and
↓ No processes in place for
acquisition approaches and the prior review of
other related information are
solutions and making trade-off interagency transactions by
reviewed to inform plans for
decisions? contracting officers to
meeting end-user needs.
• How does the ensure compliance with
+ Stakeholders work on an applicable guidelines and
agency/component promote ongoing basis to define key
coordination among assure that interagency
business and acquisition action is the best
stakeholders as an acquisition drivers to understand each procurement strategy.
moves through the various steps other’s needs.
in the process? ↓ Requiring and receiving
+ The component/agency has agencies’ roles and
• Do stakeholders work together structures in place that
to understand each other’s responsibilities are not
require appropriate clearly articulated and
needs?
coordination among understood related to the
• Does the acquisition community stakeholders developing and award and administration
provide well informed business implementing acquisition of interagency transactions.
guidance to project managers strategies.
regarding market research, ↓ Acquisition and financial
+ Management encourages and management officials do
requirements definition, supports appropriate and
competition, small business not partner to develop a
timely coordination among shared vision.
programs and contract type as a stakeholders in acquisition
means of mitigating risk? planning.
+ Lessons learned are
identified and shared among
stakeholders.

CORNERSTONE II: POLICIES AND PROCESSES (CONTINUED)
• Are roles and responsibilities + Proposed interagency ↓ The acquisition community

defined clearly and followed transactions are reviewed by does not participate or is
throughout the requirements contracting officers to ensure not included early enough
planning and development compliance with applicable in the requirements
process? guidelines and assure that definition and planning
• Is acquisition concentrating on interagency action is the best process to provide well
individual and possibly procurement strategy. informed business
redundant transactions rather + Roles and responsibilities of guidance to project
than taking a strategic approach requiring and receiving managers regarding market
to identifying repetitive agencies are clearly research, requirements
requirements and leveraging articulated and understood definition, competition,
buying power? for interagency transactions. small business programs
• Are contracting officers given an and contract type as a
opportunity to review proposed means of mitigating risk.
interagency contracting actions
prior to funding being
transferred to the receiving
agency to assure that proper
procurement guidelines
applicable to the
component/agency are being
followed and that the
interagency action is the best
enterprise procurement strategy?
2. Assessing Internal Requirements and the Impact of External Events
• Does the agency/component + Adequate and relevant ↓ The agency/component

strategically assess its needs and acquisition related data, e.g. lacks a strategic acquisition
develop acquisition approaches contract type and plan.
to help it meet those needs? product/service
↓ There is little evidence of
• Does the agency/component requirements, available and
advance acquisition
leverage purchasing volume by used to make strategic
acquisition plans and planning. Acquisition
identifying component/agency-
decisions. planning is completed on a
wide acquisitions of goods and
contract-by-contract basis
services? + The acquisition function rather than with
• Does the agency/component appropriately selects among consideration of
systematically identify and contracting tools available, corporate/agency-wide
analyze component/agency-wide including commercial item needs.
acquisitions planned in the next acquisition, performance-
based contracting, and ↓ The agency/component
12 to 24 months? lacks data on the types of
purchase cards to best meet
• Are needs identified in the contracts used on
end-user needs in a cost-
budget request submission procurement actions.
effective manner.
consistent with planned ↓ Data are not periodically
acquisition strategies? + The acquisition function
considers recurring monitored or analyzed for
• Does the agency/component acquisition planning and
purchases and develops or
track the types of acquisition decision-making.
participates in
methods used for acquiring ↓ Frequent emergency, time
component/agency-
goods and services to ensure it is and materials, and/or sole-
wide/Government-wide
employing the most appropriate source purchases are made
acquisition plans that best
contract type? to meet routine or recurring
leverage these acquisitions.
needs.

• Does the agency/component + Before awarding an ↓ Before awarding

have a mechanism to review interagency contract, the interagency contracts, the
planned acquisitions and identify agency/component conducts agency/component does
opportunities for suppliers from research and evaluates what not conduct research and
the small, veteran, woman- is already available evaluate what is already
owned and small disadvantaged Government-wide. The available Government-
business communities? Has the agency/component wide. The
agency/component achieved its understands the market that agency/component does
goals in each of the socio- might be available to the not understand the market
economic acquisition proposed interagency that might be available to
categories? contract that is not already the proposed interagency
• If acquisition plans anticipate absorbed by others. Business contract that is not already
contract bundling, or contract cases are prepared for absorbed by others, thereby
consolidation in the case of the proposed interagency promoting redundancy.
Department of Defense, have contracts. Clear roles and Business cases are not
written justifications for these responsibilities are prepared for proposed
actions and appropriate analyses developed and defined for interagency contract
been developed? parties to the interagency vehicles. Clear roles and
• Has the agency/component contract. responsibilities are not
achieved its competition + Adequate and relevant data developed and defined for
goals/targets? are available and used to parties to interagency
contracts.
• Does the agency/component make strategic decisions
have a process in place for about what work the ↓ The agency/component
determining the type or extent of agency/component should fails to achieve competition
work that is and should be perform in-house and to and socioeconomic goals.
performed in-house and which identify opportunities to Data are not monitored on
could be contracted out? compete work with the an on-going basis.
• Has the agency/component
private sector. ↓ Contract bundling or
assessed its core competencies + The agency/component contract consolidation, in
and identified opportunities to monitors achievements on an the case of the Department
compete commercial-type on-going basis, identifies of Defense, is not
activities? opportunities for small, supported by written
veteran, woman-owned and justifications for these
• Do agency/component officials small disadvantaged actions and the
track new or pending legislation
businesses and consistently development of appropriate
that might affect acquisition
achieves socioeconomic analyses.
policies and processes, training
and/or workload?
goals. ↓ Little knowledge exists of
+ Acquisition plans that what work is contracted
• How recently have
anticipate contract bundling out and what work is
agency/component officials
or contract consolidation, in performed in-house.
assessed whether their
acquisition processes are capable
the case of the Department ↓ The agency/component has
of Defense, consistently not assessed its core
of responding to unforeseen
include written justifications competencies or identified
external events and
for these actions and opportunities to compete
emergencies?
appropriate analyses are commercial-type activities.
• Do agency/component officials developed.
carefully, and on an on-going ↓ The agency/component
+ The agency/component makes frequent changes to
basis, consider how to meet
competition advocacy acquisition plans due to
competing demands on the
program is active in unforeseen expenses or
acquisition system?
identifying obstacles to budgetary shortfalls.
• Before awarding an interagency competition early in the
contract, does the requirements development
↓ The function is ill-
agency/component research and equipped to purchase
process, and identifies
evaluate what is already goods and services needed
competitive opportunities.
available Government-wide? to respond to emergency
situations.

• Does the agency/component + The agency/component ↓ Contract types do not

understand the market that might consistently achieves mitigate risk and/or reflect
be available to their proposed competition goals/targets. inadequate requirements
interagency contract that is not planning and development.
already absorbed by others? Is a
+ Strategic acquisition plans
business case prepared for the
are current and reflect ↓ Acquisition plans are
anticipated budgetary incomplete, not compliant
proposed interagency contract?
resources. with FAR Part 7 and
Are clear roles and
+ There is an awareness of otherwise demonstrate a
responsibilities developed and
current and pending general lack of effective
defined for parties to the
legislation, policy, and plans advance planning and
interagency contract?
and their potential coordination.
implications on the
+ The agency/component has
assessed and incorporated
changes, as appropriate, to
enable its acquisition
processes to better respond
to unforeseen external events
and emergencies, e.g. use of
pre-positioned contracts.
+ There is awareness within
the acquisition community
of the agency’s long-term
budgetary outlook.
B. Effectively Managing the Acquisition Process
1. Empowering Cross-Functional Teams

• To what extent does the + The agency/component uses ↓ The agency/component
agency/component use cross- cross-functional teams to makes limited use of cross-
functional teams/Integrated plan for and manage functional teams.
Project Teams/integrated
business teams in performing
projects. These teams ↓ Acquisition function
develop a project plan to representatives do not
acquisition activities? Are staff implement projects effectively participate as
from field offices involved at effectively. members of Integrated
any level? How?
+ Project performance is Project Teams nor do they
• Are roles and responsibilities systematically monitored feel empowered to
clearly defined, are team and controls and incentives contribute to project team
members invested in the are established for decisions.
project’s outcome, and do they
feel empowered to make
accountability. ↓ COTRs, contracting
decisions?
+ Contracting Officer’s officers, and PMs are not
training is current and adequately trained,
• Does the agency/component use compliant with Federal appropriately certified,
integrated business teams (e.g., Acquisition Certification in assigned to acquisition at
program management, finance, Contracting Program (FAC- appropriate level, and/or
contracting, legal) to C) or DAWIA equivalent continuous learning
systematically identify and level of certification is requirements have not been
acquisitions planned for the next appropriate to the acquisition met.
12 to 24 months? to which he/she is assigned.

• Do teams use a project plan to + Contracting Officers ↓ Contracting Officers

manage and control project Technical Representatives’ Technical Representatives
implementation? training is current and and contracting officers do
• Does the project plan include continuous learning not communicate on an
performance measurement requirements are compliant ongoing basis throughout
baselines for schedule and cost, with the Federal Acquisition the period of performance
major milestones, and target Certification for Contracting of the project/contract.
dates and risks associated with Officer Technical ↓ Project performance is not
the project? Representatives (FAC- systematically monitored,
• Is performance-based acquisition COTR). and controls and incentives
emphasized and used in an + Contracting Officer are not properly established
appropriate manner, e.g. use of Technical Representative for accountability.
cross-functional teams to (COTR) and Program ↓ Teams fail to use key
determine results to be achieved, Manager (PM) work closely elements of good project
market research, metrics for with the contracting officer. management techniques,
achieving success and managing + Project Manager assigned to including monitoring
performance? major acquisitions are project performance and
• Do individuals outside the current in training and establishing controls and
project team regularly review compliant with Federal incentives to meet project
the status of cost, schedule, and Acquisition Certification for goals.
performance goals, e.g. Earned Program and Project
Value Management data? Managers (FAC-P/PM) or
• How are teams held accountable DAWIA equivalent and
for meeting cost, schedule and level of certification is
performance goals? appropriate to the acquisition
to which he/she is assigned.
• Is there good a communications
process among stakeholders? + Open, honest, and clear
communication is
encouraged among all
parties including team
members, program officials,
and contractors.
2. Managing and Engaging Suppliers

• Does the agency/component + The component/agency ↓ Knowledge of
have a process to identify key trains its acquisition suppliers/contractors is not
suppliers, especially with regard personnel on how to manage shared across the
to products/services supporting supplier relationships, e.g. component/agency.
Government-wide initiatives,
e.g. environment/greening,
various tools, processes and ↓ Agency/component does
practices that support not have a strategic
reduced energy consumption and strategic sourcing among sourcing plan.
section 508/accessiblity? other initiatives.
• Does the agency/component ↓ Plans are not in place to
+ Plans are in place to provide provide maximum
train its acquisition workforce maximum practicable practicable opportunities
on effective use of tools and opportunities for small for small business both in
practices for managing supplier businesses in subcontracting prime contracting and
relationships? and prime contracting. subcontracting.

• Has the agency/component + Contracting Officers ensure ↓ The function continues to

established an effective that contractors have a code select the same suppliers
communication and feedback of ethics and business without periodically
system with its suppliers to conduct, establish and assessing whether the
continually assess and improve maintain specific internal goods and services offered
its own and its suppliers’ controls to detect and are competitive in terms of
performance? prevent improper conduct in price, quality and/or
• Are meaningful and measurable connection with the award or performance.
performance metrics used to performance of government ↓ The function continues to
ensure that expectations are contracts or subcontracts and use time and materials
established and understood? notify contracting officers contracts without
• Are awards and incentives without delay whenever they periodically assessing
properly applied and based on become aware of violations whether requirements are
measurable results, e.g. of Federal criminal law with sufficiently stable to use
schedule, cost and/or regard to such contracts or another type of contract
performance? subcontracts. vehicle, e.g. firm fixed
• How actively is past + Past performance price contract.
performance evaluated and evaluations are routinely ↓ Statements of
results shared among the prepared in accordance with work/performance work
acquisition workforce? the procedures outlined in statements/statements of
FAR Part 42 and used.
• Are processes in place for objectives, including those
soliciting and evaluating + The contracting community in task and delivery orders
contractor feedback on an on- has established an effective are issued without: (a)
going basis? communication and sufficient information that
feedback system with its is clearly stated so that
• Are plans in place to provide suppliers. offerors may make
maximum practicable
+ The acquisition staff informed business
opportunities for small
effectively utilizes IAE tools decisions on whether to
businesses both in prime
in conducting market respond and perform the
contracting and subcontracting?
research, soliciting due diligence necessary to
• Do statements of propose the best solutions
competition and making
work/performance work possible and (b) clear
contracting decisions.
statements/statements of performance measures and
objectives, including those in + Meaningful and measurable expectations related to
task and delivery orders have: performance metrics are
quality, responsiveness,
(a) sufficient information that is developed and implemented
timeliness and cost.
clearly stated so that offerors for contracts.
↓ The acquisition staff lacks
may make informed business + Statements of the skills, knowledge, and
decisions on whether to respond work/performance work
expertise to develop
and perform the due diligence statements/statements of
meaningful and measurable
necessary to propose the best objectives, including those
performance metrics and
solutions possible and (b) clear in task and delivery orders
manage supplier
performance measures and have: (a) sufficient
relationships effectively.
expectations related to quality, information that is clearly
responsiveness, timeliness and stated so that offerors may ↓ The acquisition staff does
cost? make informed business not effectively use IAE
tools in conducting market
• Does the agency/component decisions on whether to
research, soliciting
have a process in place to respond and perform the due
diligence necessary to competition and making
identify and prevent acceptance
propose the best solutions contracting decisions.
of nonconforming products from
suppliers? possible and (b) clear ↓ Past performance
performance measures and evaluations are not
expectations related to routinely prepared,
quality, responsiveness, reviewed and used in
timeliness and cost. accordance with FAR Part
42.

+ Contract awards and ↓ Contract awards and

incentives are based on incentives are not based on
measurable results and are measurable results and as a
properly applied. result are improperly
+ Processes are in place to applied.
identify and prevent ↓ The agency/component has
acceptance of not established an effective
nonconforming, suspect or communication and
counterfeit products from feedback system with its
suppliers. suppliers, such as (a) using
integrated teams to
facilitate sharing of
information (b)
establishing an objective
basis for providing
feedback by setting
performance measures and
expectations in terms of
quality, responsiveness,
timeliness and cost and (c)
providing periodic “report
cards” and meeting
formally with key suppliers
to discuss issues.
↓ The agency/component
does not review supplier
quality assurance plans and
does not have processes in
place to identify, prevent or
detect nonconforming,
suspect or counterfeit
products from suppliers.
3. Monitoring and Providing Oversight to Achieve Desired Outcomes

• Does the agency/component + The agency/component has ↓ Personnel responsible for
track the types of acquisition undertaken workforce contract management have
methods used for acquiring planning to ensure that skills and knowledge gaps
goods and services to assess individuals who award, that inhibit their ability to
workload and training manage and monitor properly oversee the types
requirements? contracts have clearly of contracts used.
• What tools, processes and defined roles and ↓ There are no processes in
controls does the responsibilities and have place for monitoring
agency/component use to ensure appropriate workload, skills whether contracts meet
effective oversight of contractor and training to perform their cost, schedule,
performance? jobs effectively. performance and quality
• What tools, processes and + The agency/component requirements.
controls does the employs contract monitoring ↓ The component/agency
agency/component use to ensure plans or risk-based strategies does not assign clear roles
effective oversight of employees and tracks contractor and responsibilities for
making purchases? performance. overseeing contracts.

• Does the agency/component + The agency/component’s ↓ The acquisition oversight

clearly define the roles and acquisition workforce and process is not regularly
responsibilities for those who project managers are reviewed; areas needing
perform contract management adequately trained in and improvement are not
and oversight? knowledgeable of earned properly identified and
• What actions has the agency value management. They corrective action plans are
taken to ensure that it has ensure that suppliers have not consistently established
adequate staff with the right established earned value and implemented.
skills, knowledge and training to management systems and the ↓ Earned value data is
implement policies and agency/component verifies unavailable or unreliable
processes to oversee contractor that it and its suppliers and earned value
performance? effectively use earned value management principles are
• Do agency personnel or external management processes and not properly understood
parties with appropriate procedures on all applicable and implemented.
programs.
knowledge, skills and ↓ A significant percentage of
responsibilities monitor internal + The acquisition oversight contracts fail to meet cost,
control over the acquisition process is regularly schedule, performance
process on a continuous basis? reviewed, areas needing and/or quality
• Are contracting and project improvement are identified requirements.
and corrective action plans
management staffs adequately
are established and
↓ There are material
training in and knowledgeable of weaknesses and/or
earned value management and implemented. For example,
reportable conditions
do they require their contractors field level reviews are
related to acquisitions in
to use earned value management conducted in accordance
the agency/component’s
as an investment planning and with agency requirements.
performance and
control tool? Commonalities among
accountability report.
review findings are
periodically analyzed and
contracting activity/agency-
wide corrective are actions
taken.
4. Enabling Financial Accountability

• Does the acquisition workforce + The acquisition workforce ↓ Acquisition and financial
have access to and use timely has ready access and uses management staff lack
contractual financial information information on obligated and access or fails to
to monitor and oversee expended funds with effectively use critical
individual acquisitions? sufficient information to information, including
• Is the agency/component’s assure proper oversight and fiscal year,
financial management system accounting at the contract appropriation/Treasury
integrated with its contract level. fund symbol, organization
management system? + Entries are made to the code, cost center, object
• Does the financial management financial management classification, estimated
system report frequently enough system by appropriate amount, project code,
to provide reasonable assurance personnel that update the program code, transaction
of accountability in acquisitions? contract management and date, action code, subject-
to-funds availability
• Are financial data resulting from property accountability
indicator, asset identifier
new contracts, task orders, and systems.
code, contractor
contract modifications clear and + The quality, accuracy and code/name, award date and
recorded properly? frequency of reporting by
amounts increased and/or
the agency/component
decreased.
ensures accountability in the

• Does the agency/component + Adjustments to contract ↓ Acquisition and financial

measure/monitor how often accounting records are management staff
erroneous or improper payments clearly reported and accurate independently update the
are made? Is a risk assessment and such adjustments same types of data into
process in place to address represent a low percentage independent financial and
improper payments? of financial transactions. contract management
• Does the financial management + Erroneous and improper systems. Standard systems
system consistently record payments and cost overruns are not used.
interagency transactions to are tracked and are not a ↓ Financial management
include a consistent naming significant problem. systems fail to provide
convention of the agency to transaction details to
which funds are transferred; the
+ Contracting and financial
officials take appropriate support account balances
specific purpose of the funds or identify the method of
corrective action when
transferred; if the transfer is for acquisition, lack of
contractors are not meeting
assisted contracting or if the evidence that the
expectations for cost,
receiving agency is performing contractor’s final invoice
schedule or performance.
the requirement in-house; and has been submitted and
the amount of fee charged by the paid or fail to perform
receiving agency? other transaction process
and routine accounting
activities adequately.
↓ Inadequate transaction
processing, particularly
improper payments, occur
frequently.
↓ Failure to properly capture
and identify taxpayer
identification number for
contractor identification
and incoming reporting and
debt collection purposes.
↓ Critical information is not
being captured, and
duplicative actions on the
part of acquisition and
financial management
staffs are required to
independently update data
into the various systems
thereby significantly
increasing the probability
of erroneous data entry.
receives a qualified,
disclaimed or adverse audit
opinion, which may
indicate poor
accountability.
↓ Auditors note weaknesses
in the
agency’s/component’s
acquisition or financial
management function in
the agency/component’s
audit report.

↓ There is a significant
number/backlog of
undelivered orders.
↓ The financial management
system does not
consistently record
interagency transactions to
include a consistent
naming convention of the
agency to which funds are
transferred, the specific
purpose of the funds
transferred, if the transfer
is for assisted contracting
or if the receiving agency
is performing the
requirement in-house and
the amount of fee charged
by the receiving agency.
C. Promoting Successful Outcomes of Major Projects
1. Using Sound Capital Investment Strategies

a. Integrating Organizational Goals into the Capital Decision-making Process

• Are the agency/component’s ↓ Capital investment
capital investments linked to and + Capital asset and major decisions are made without
driven by its mission and acquisitions are clearly
strategic consideration of
strategic goals/plan? linked to strategic plans.
what assets the
• Has the agency clearly defined + The agency has a clear agency/component already
what constitutes a “major definition of what constitutes has and what it needs or
acquisition” for both IT and non- a major acquisition as the resources needed to
IT acquisitions? related to IT and non-IT fulfill its long- term and
projects.
• Has the agency/component short-term goals and
completed a comprehensive + The agency/component has objectives.
capital investment needs completed a comprehensive ↓ The agency/component
assessment? needs assessment that does not have a clear
considers the overall mission
• Does the agency/component definition of what
and identifies the resources constitutes a major
thoroughly consider alternatives
needed to fulfill immediate acquisition as related to IT
to capital investments (e.g., see
requirements and anticipated and non-IT projects.
“Three Critical Questions,”
future needs.
Alternatives to Capital ↓ Capital asset and major
Investments, section 1.4, OMB + Gaps between current and acquisitions are not linked
Circular A-11, Part 7, Capital needed capabilities are to strategic plans.
identified.
Programming Guide, V 2.0, June ↓ The acquisition staff does
2006)? + The agency/component not participate as a member
• Does the agency/component tracks the use and of program Integrated
perform a periodic needs performance of existing Project Teams.
assessment on large capital assets and facilities.
investment projects lasting more
than one year?

• Does the agency/component + Sustainable design principles ↓ The acquisition strategies

have an asset inventory? If so, required under section 109 used in the
does it contain assessments of of the Energy Policy Act of component/agency’s
the condition of the assets? 2005 are applied to the project business cases are
• How does the citing, design and developed without
agency/component ensure that it construction of new and appropriate coordination
has the necessary resources replacement buildings. with the acquisition
available before beginning + The agency/component function.
investments in capital projects? routinely evaluates ↓ There is little consideration
alternatives, including non- of alternatives to satisfy
capital options, and repair agency/component needs.
and renovation of existing ↓ Sustainable design
assets before choosing to principles required under
purchase or construct a section 109 of the Energy
capital asset or facility. Policy Act of 2005 are not
+ The agency/component applied to appropriate
periodically assesses capital projects.
investment projects lasting
more than one year to assess
the continued viability, need
and size of the project.
+ The agency/component has
an asset inventory that
includes condition
assessments.
+ The agency/component
ensures it has adequate time,
money, technology and other
resources in place before
beginning major projects.
+ The acquisition function
actively participates as a
member of the Integrated
Project Team and the in the
development of acquisition
strategies used in the
component/agency’s project
business cases.

1. Using Sound Capital Investment Strategies (continued)

b. Evaluating and Selecting Capital Assets Using an Investment Approach

• Does the agency/component + The agency/component has a ↓ No framework/policies are
have processes in place for the processes in place for the in place to ensure
development of decision or development of investment appropriate levels of
investment packages, such as packages that include management review,
business cases, to justify capital common categories of analysis and approval for
project requests? information, such as links to capital investment projects
• Are Project Managers organizational objectives; before projects are
appropriately assigned and solutions to organizational initiated.
trained in compliance with FAC- needs; project resource ↓ Projects are selected
P/PM or DAWIA equivalent? estimates and schedules; and without using pre-
• Does the agency have a standard project costs, benefits, and established criteria and
process for identifying or a risks. without consideration of
standard definition for what + The agency/component’s project risks.
constitutes a major acquisition policy and processes require ↓ Year-to-year changes are
for both IT and non-IT appropriate levels of made without
investments? management review and consideration of strategic
• Does the agency/component approval and are supported decisions.
by proper financial,
have pre-established criteria and
technical, and risk analyses.
↓ Agency has no standard
a relative ranking of investment definition of or means of
proposals? Does it maintain + Processes for ranking and identifying major
Review Boards for business case selecting projects are based acquisition for IT and non-
decision-making? on pre-established criteria, a IT investments.
• Does the agency/component relative ranking of
↓ Tools such as earned value
develop and maintain capital investment proposals and
management systems are
planning documents at various trade-offs and an
not used to track project
levels of detail that define understanding of potential
cost and schedule and
capital asset decisions? project risks.
mitigate risk.
• Does the agency develop a long- + Capital planning documents
are developed and
↓ Project Managers are not
term capital plan that defines appropriately assigned and
capital asset decisions? maintained at various levels
trained in compliance with
of detail to guide
• Are earned value or other project implementation of
FAC-P/PM or DAWIA
management techniques being equivalent.
organizational goals and
properly applied to major
objectives and helps decision
acquisitions and major systems
makers establish priorities.
acquisitions?
+ Agency has a process or
policies in place to identify
major acquisitions for both
IT and non-IT investments.
+ Earned value management
and other tools are properly
applied in the planning and
execution of major
acquisitions and major
systems acquisitions.
+ Project Managers are
appropriately assigned and
trained in compliance with
FAC-P/PM or DAWIA
equivalent.

1. Using Sound Capital Investment Strategies (continued)

c. Balancing Budgetary Control and Managerial Flexibility

• Does the agency/component + The agency/component ↓ Capital projects are not
budget for useful segments of budgets projects in useful funded in useful segments,
capital projects? segments. which lead to acquisitions
• Do managers have the necessary + Information and data that may not be fully
information to plan for capital systems are coordinated, in analyzed or justified,
investment projects? For place and are used to cancellation of major
example, does the develop estimates of the full projects and the loss of
agency/component have and use cost of a project or segment associated sunk costs.
systems to estimate the full cost early in the life of a project. ↓ Agencies/components lack
of projects? or do not use timely
• Are alternatives to full up-front objective, information to
funding considered when they make strategic capital
may be in the best interest of the investment decisions, e.g.,
Government? earned value management
systems.
2. Employing Knowledge-Based Acquisition Approaches
• Is a knowledge-based approach + The agency/component ↓ The agency/component

used to develop new products? embodies a knowledge- does not use a knowledge-
• What technologies does the based approach to based process for
agency use to match end-users’ acquisition that is reinforced developing new products.
requirements with the in its policies, implemented ↓ The agency/component
technology resources available in its processes, reflected in does not use the necessary
and the program’s ability to individual acquisition controls, such as
meet cost and schedule decisions and demonstrated demonstrating knowledge-
predictions? through knowledge-based based deliverables, to
• Does the agency/component deliverables. gauge whether adequate
have an established metric or + At knowledge point 1* or an knowledge has been
benchmark, such as the equivalent milestone, the attained before deciding to
percentage of engineering agency regularly matches move a product to the next
drawings complete or similar requirements and technology phase of development.
criteria, to demonstrate that the resources before beginning
product’s design is stable? product development.
• Is there an established metric or + At knowledge point 2* or an
benchmark, such as having 100 equivalent milestone, agency
percent statistical control over policy requires the developer
key manufacturing processes to to demonstrate that the
demonstrate that the product can design is able to meet
be reliably produced and with requirements. To do so, the
high quality? agency uses an established
• Do program managers quantify benchmark, such as the
the extent to which development release of at least 90 percent
efforts fail to achieve established of its engineering drawings
benchmarks and assess whether as a criterion.
those shortcomings are critical
and correctable during the next
phase?

• Does the agency/component + At knowledge point 3* or an

measure the extent to which new equivalent milestone, agency
product development activities policy requires the developer
meet the baseline cost, schedule to demonstrate that the
or performance requirements of production process is mature
the activities? and uses an established
• Does the agency use lessons benchmark, such as 100
learned from programs that did percent statistical control of
not meet their baseline key manufacturing
requirements to improve the processes, as its criteria.
agency’s acquisition processes?
*
See Appendix 2, pages 44
and 45, for a discussion
knowledge points 1, 2 and 3.

APPENDIX 1 CORNERSTONE III
CORNERSTONE III – HUMAN CAPITAL

This cornerstone focuses on four elements and eight critical success factors that can be used to
assess the effectiveness of human capital policies and practices in relation to the acquisition
function.
A. Valuing and Investing in the Acquisition Workforce
1. Commitment to Human Capital Management

• How does the + Acquisition officials, ↓ Agency/component
agency/component’s leadership including the ACM, play a leadership views people as
demonstrate commitment to the significant role in costs rather than as assets.
acquisition workforce? developing the ↓ Agency/component
• What is the role of acquisition agency/component’s overall leadership makes decisions
officials in developing the human capital strategy and about the workforce
agency/component’s human ensure that it reflects the without considering how
capital strategic plans? goals of the acquisition the decisions affect mission
• Does the agency/component function. accomplishment, e.g.
have performance expectations + Acquisition officials contracting officer
for senior leaders and managers develop, implement, and warrants and workload.
to foster collaboration within evaluate human capital ↓ Agency/component
and across organizational approaches designed to leadership & management
boundaries and demonstrate a ensure accountability, meet are not held accountable
commitment to lead and customer needs, and for effectively managing
facilitate change? improve overall business the acquisition workforce.
• How are senior leaders and performance.
↓ Acquisition officials
managers held accountable for + Acquisition officials including the ACM do not
effectively managing the collaborate with and secure contribute in developing
acquisition workforce? the support of managers at the agency/component’s
all levels for human capital overall human capital
approaches. strategy and ensure that it
+ Acquisition officials are held reflects the goals of the
accountable for managing acquisition function.
the acquisition workforce ↓ Business decisions proceed
effectively. without consideration of
+ Acquisition employees are human capital needs or
provided with resources for human capital approaches
continuous learning efforts, necessary for success.
competency-based appraisal ↓ Acquisition-related
systems and retention and performance standards and
reward programs. expectations do not
cascade throughout the
contracting organization.

CORNERSTONE III: HUMAN CAPITAL (CONTINUED)
2. Role of the Human Capital Function

• What are the roles and + Human capital professionals ↓ Agency/component
responsibilities of human capital partner with the leadership views human
officials with respect to the agency/component’s leaders capital management as a
acquisition workforce? and managers. support or overhead
• How do acquisition managers + Human capital professionals function.
collaborate with human capital use streamlined personnel ↓ Acquisition and human
personnel to make hiring and processes and other means to capital officials do not
staffing decisions and how do meet customer needs, coordinate with each other.
they engage in strategic human including hiring and
capital planning? retaining an acquisition
workforce with the right
skills.
B. Strategic Human Capital Planning
1. Integration and Alignment

• Do agency/component managers + Comprehensive ↓ The agency/component
recruit, hire and manage their agency/component-wide does not fully recognize
contracting support in a unit- workforce planning efforts. the link between its human
centric human capital approach capital approaches and
that allows for consideration of
+ A strategic workforce plan
that reflects the needs of the organizational performance
how well the unit’s contracting objectives.
acquisition function,
function supports Government-
wide qualification requirements
including consideration of ↓ The unit adopts human
which functions to maintain capital approaches without
or agency-/component-wide
in-house. considering how well they
goals or strategies? Or do
+ Strategies for recruiting, support organizational and
agency/component managers
retaining, and developing acquisition goals and
develop or follow a corporate
acquisition staff, including strategies or how these
approach to recruiting, hiring
performance measures to approaches may be
and managing its contracting
evaluate the contribution interrelated.
support?
these strategies make in
• Does the agency/component
supporting the
have a strategic human capital
agency/component’s
plan that incorporates the needs
acquisition function and
of the acquisition function? If
achieving its mission and
not, does the acquisition
goals.
function have its own plan?
Has/Is the agency + The agency/component has
participated/participating in the inventoried its acquisition
Office of Personnel workforce and identified
Management’s human capital current and future
survey/initiative for acquisition? weaknesses and needs in
acquisition skills (i.e.,
• Does the agency/component’s
conducted a skills gap
strategic human capital plan
analysis).
address the use of contractors
that provide commercial-type
services to the
agency/component?

• Does the agency’s succession

planning and management of its
acquisition workforce receive
active support from top
leadership, link to strategic
planning, identify people with
critical skills, emphasize
development assignments in
addition to formal training and
address such human capital
challenges as diversity,
leadership capacity and
retention?
ensure that teams developing
plans for the acquisition
workforce consist of all
stakeholders, such as customers
or end-users, contracting
officers, representatives from
budget and finance, legal
counsel and human capital
personnel?
• How does the
agency/component track the
effectiveness of human capital
strategies for its acquisition
workforce?
2. Data-Driven Human Capital Decisions

• Who is included in the + Data on the ↓ Officials lack or do not use
acquisition workforce? agency/component’s critical information with
• How does the acquisition workforce are which to create a profile of
agency/component track data on reflected in strategic the acquisition workforce
its acquisition workforce? For workforce planning or to evaluate the
example, how does the agency documents. effectiveness of human
use the Acquisition Career + Data are available on staff capital approaches.
Management Information development, including the ↓ Data are not accurate,
System (ACMIS) or DoD number of people receiving timely and/or used to
equivalent to support human training, money spent on evaluate and improve the
capital decisions? training and measures to effectiveness of training
• How does the determine the real impact on and development
agency/component determine the agency’s goals and programs.
the appropriate size of its objectives, e.g., increased ↓ Performance measures and
acquisition workforce? productivity, enhanced goals for
• Is the mix of entry-level, mid- customer satisfaction, agency/component human
level, top-level executives, and increased quality, reduced capital programs,
contract formation and costs and errors. especially as they link to
administration resources + Acquisition workforce data programmatic outcomes,
appropriate given the agency/ are used for planning and have yet to be identified.
component’s mission and role of decision-making.
the acquisition function?

• What training and professional + The agency/component uses ↓ The agency/component has
certifications have current data to evaluate and little knowledge of what
acquisition employees attained? continuously improve the work is contracted out and
• How does the effectiveness of training and what work is performed in-
agency/component track the development programs. house.
workload of the acquisition + The agency/component sees ↓ Agency/component does
staff? value of and is committed to not use the annual FAI
• Does the agency/component completing accurate timely Report.
have a skills inventory for the acquisition workforce data.
acquisition workforce? How is it
used to make human capital
decisions?
• How long does the recruitment
process take?
• What has the attrition rate been
for the acquisition workforce?
conduct exit interviews with
departing acquisition workforce
employees to determine why
people are leaving? If so, how
are lessons learned used?
• What is the acceptance rate of
applicants offered positions?
• How are training and
development programs and
results evaluated, and how does
the agency/component tack,
report and use this information?
• Does the agency/component use
the annual FAI Report on
acquisition workforce
data/trends? (www.fai.gov)
• Has/Is the agency
implemented/implementing
results from the Office of
Personnel Management’s human
capital survey/initiative for
acquisition?

C. Acquiring, Developing, and Retaining Talent
1. Targeted Investments in People

• Does the agency/component + The CAO designated an ↓ An agency ACM has not
have a method for determining agency ACM in accordance been designated by the
the appropriate level of spending with OFPP Policy Letter 05- CAO.
on training, recruiting and
retention efforts?
01 (April 15, 2005). ↓ Training and other human
+ The agency/component has a capital expenditures are
• Does the agency/component current acquisition minimized rather than
have a current acquisition workforce plan that includes viewed as an investment.
workforce plan that includes
contracting officers, COTRs,
contracting officers, COTRs, ↓ The agency/component
PMs and others that the does not have a current
PMs and others that the CAO CAO includes in the acquisition workforce plan
includes in the acquisition acquisition workforce. that includes contracting
workforce?
+ The agency/component has officers, COTRs, PMs and
• Are individual training plans prioritized the most others that the CAO
established for all employees? important training includes in the acquisition
Are model career paths charted initiatives; secured top-level workforce.
for acquisition staff? commitment and provided/is ↓ Funding decisions are
• Is continuous learning providing resources; made without clearly
emphasized and opportunities obtained and considered defined objectives or
provided? For example, input on training and adequate consideration of
attending meetings, seminars resource needs from how they will impact the
and summits to hear about best management and staff; workforce.
practices or otherwise stay up- identified those needing
to-date on issues in the training and set
does not establish
workforce’s field? requirements; tailored
priorities, provide adequate
• What are the training training to meet the needs of
funding or track
requirements for new and the workforce; tracked
investments in human
current acquisition staff and training to ensure it reaches
capital.
related positions? the right people at the right
time; and measured the ↓ Individual training plans
• How is staff trained regarding are not established for all
effectiveness of training.
new practices in acquisition? employees.
• Does the agency/component use targets investments in human ↓ There is little or no
a comprehensive training evidence of succession
capital to help it attract,
management system that can planning.
develop, retain and deploy
track the delivery of training?
talented high-performing ↓ A general lack of
• Do managers consistently staff to accomplish its certifications and
provide resources (funds, mission. These investments workforce policies.
people, equipment and time) to may include training and
support training and professional development,
development priorities for the recruiting bonuses, retention
acquisition staff? allowances and skill-based
• Does the agency/component pay.
have a succession plan? + Goals, expectations and
criteria for investments in
human capital development
are clearly defined,
transparent, consistently
applied & based on expected
improvement in results.

+ Agency/component training
investments are monitored
and evaluated for
effectiveness.
2. Human Capital Approaches Tailored to Meet Organizational Needs

• What human capital flexibilities + The agency/component has a ↓ Managers view
have agency officials used over human capital strategy for improvements in the
the past few years and with what the acquisition workforce acquisition workforce as
results? and it is based on the improbable.
• What laws, regulations or agency/component’s ↓ Managers fail to fully
policies, if any, do officials view mission. explore the range of tools
as limiting flexibility in human + The agency explores and flexibilities available
capital approaches? opportunities to increase its under existing laws and
• Does the agency/component use competitiveness as an regulations.
state-of-the-art recruiting employer and eliminate
techniques to attract new barriers to building an
employees to the acquisition effective skilled acquisition
workforce? workforce and takes
• Does the agency/component appropriate action.
deploy sound marketing
techniques in promoting the
acquisition field as an attractive
career option to potential
employees?
• Does the agency explore
retention and turnover issues
(i.e. prognosticators of potential
staff loss or morale indicators)?
D. Creating Results-Oriented Organizational Cultures
1. Empowerment and Inclusiveness

• Does management seek ideas + Management obtains ↓ Employee ideas are not
from the acquisition workforce? employees’ ideas, involves sought by management and
Do employees feel a sense of employees in planning and employees are not involved
ownership about policies and sharing acquisition in planning and sharing
procedures? performance information acquisition performance
• Does management conduct new and incorporates employee information within the
employee orientation, “climate feedback into new policies organization.
surveys” and exit interviews? Is and procedures. ↓ Employees do not feel a
this information used to improve + The agency/component has sense of ownership about
empowerment and established a communication policies and procedures.
inclusiveness? strategy to create shared ↓ High turnover rates that
• Do managers involve employees expectations about the could impact mission
when planning and sharing acquisition function and to accomplishment.
acquisition performance report progress.
information?

• Has the agency/component ↓ The agency/component has

established a communication not established a
strategy to create shared communication strategy to
expectations about the create shared expectations
acquisition function and to about the acquisition
report progress? function and to report
progress.
↓ Substantial time and
resources are consumed by
reacting to workplace
disputes and long-standing
sources of conflict.
2. Unit and Individual Performance Linked to Organizational Goals

• Has the agency/component + Individual performance ↓ Performance expectations
recently assessed whether its expectations are aligned with are not aligned with
performance management organizational and cross- organizational goals.
systems for the acquisition
workforce adequately meet its
cutting goals. ↓ The agency/component
needs?
+ Performance information is does not use performance
routinely used to track and information to track
• What efforts, if any, are plan follow-up actions to progress at meeting
underway to review or improve address organizational organizational priorities.
existing performance
management systems?
priorities. ↓ Individual performance
+ Competencies are used that expectations are not
• Does the agency/component’s enable fuller assessment of articulated in a timely
performance management performance. manner.
system provide (a) candid and
constructive feedback to help
+ Meaningful distinctions in
performance are made.
individuals understand their
contributions and help the + Roles and responsibilities
organization achieve its goals, are defined and enable staff
(b) objective information to to maintain a consistent
reward top performers and (c) focus on programmatic
documentation and information priorities even during
to deal with poor performers? organizational transitions.

APPENDIX 1 CORNERSTONE IV
CORNERSTONE IV – INFORMATION MANAGEMENT AND STEWARDSHIP

This cornerstone focuses on two critical elements and five critical success factors that focus on
data essential to making good acquisition decisions.
A. Identifying Data and Technology that Support Acquisition Management Decisions
1. Tracking Acquisition Data

• What acquisition-related data + Acquisition managers ensure ↓ The agency/contracting
does the agency/component that employees are aware of activity has not collected
collect? Are data kept current? the importance of timely and the full set of information
• Are the agency/component’s accurate transaction or data to make effective
financial (including budgetary), reporting and provide and fact-based decisions.
acquisition, operating and training to ensure data ↓ Incomplete data prevent
management information quality. the agency/component
systems integrated? Do the + Transaction data are reported from maximizing
systems provide timely, accurate timely and accurately. information tools for
and relevant information? strategic acquisition
+ Transaction data are
• Do stakeholders believe the regularly monitored for planning and analysis.
agency/component’s information accuracy and completeness. ↓ Data are not current,
systems meet their business reliable, complete or
needs?
+ Transaction data are
credible, reliable and timely, accurate.
• How does the and is used to make ↓ Transaction data are not
agency/component make needed informed decisions. regularly monitored for
data available to stakeholders accuracy and/or
within the acquisition process,
+ Contract management
information tracks events completeness. There is no
such as program officials and regularly scheduled data
throughout the life of a
contracting officers? review and certification.
contract, e.g. contract award,
• How does the period of performance, ↓ The agency/component
agency/component manage modifications and close-out. does not make needed data
institutional knowledge and accessible to decision
identify and share best
+ Financial data, e.g.
budgetary resources and makers leading them to
practices? rely on informal ad-hoc
funds availability, status of
• Has the agency/component obligations and expenditures systems to make
established specific goals and on individual contracts, acquisition decisions.
metrics and collected data in outstanding purchase ↓ Decisions are not
support of those metrics to requests and payments for supported by demonstrable
assess the performance of the the receipt of goods and underlying information.
acquisition function? services are readily available ↓ Lack of integration among
• Does the agency/component to stakeholders. systems hinders a user’s
annually review and certify its + Finance executives work ability to access
FPDS data quality, accuracy and with acquisition executives acquisition-related
timeliness? For example, has and managers on an ongoing information in a timely
the agency/component basis to determine business manner.
implemented an annual FPDS
verification and validation plan
and acquisition information ↓ Metrics established
needed to manage and measure only inputs rather
that complies with OFPP oversee the than outputs.
guidance? agency/component’s mission
and objectives.

CORNERSTONE IV: INFORMATION MANAGEMENT & STEWARDSHIP (CONTINUED)
• Has the agency implemented + Relevant financial ↓ Measurements taken in

OMB’s guidance on future data information pertaining to support of metrics are not
submissions under the Federal acquisition is presented with credible leading to
Funding Accountability and suitable detail in an disagreements over
Transparency Act (FFATA) (See understandable format. numbers and the value of
OMB Memorandum M-08-12)? the assessment process.
+ Contracting personnel make
regular use of data and spend ↓ Agency does not have an
analysis techniques to acceptable FPDS
support strategic planning verification and validation
efforts. plan.
+ The agency/contracting
activity knows how much it
is spending using purchase
cards and has considered this
information in its spend
analysis.
+ The agency/contracting
activity uses a variety of
information, including
financial data to conduct a
spend analysis.
+ Agency has an acceptable
FPDS verification and
validation plan.
2. Translating Financial Data into Meaningful Formats

• Do finance executives work with + Finance and acquisition ↓ Financial information
acquisition executives and executives and managers pertaining to acquisition is
managers to determine their work together on an on- not of the proper scope,
information needs? going basis to determine level of detail, timing,
• What types of financial data or business and acquisition content and presentation
reports are regularly provided to information needed to format to provide real
acquisition officials? manage and oversee the value to users.
• To what extent do acquisition agency/component’s mission ↓ Acquisition information
personnel use financial and objectives. received by financial
information to support + Relevant financial management staff is not
acquisition decisions? information pertaining to clear and understandable
acquisition is presented with impairing efficient
suitable detail in an processing of the
understandable format. information into
Multiple levels of detail are management reports.
available to provide
complete and consistent
obligation and expenditure
information for an
agency/component’s overall
contracting activities and for
individual contracts.

+ Financial management staff

and officials receive
feedback from acquisition
staff and officials to ensure
that the reporting needs of
the acquisition function are
being met.
3. Analyzing Goods and Services Spending

• Does the agency/component + The agency/component ↓ The agency/component
regularly conduct and make use makes regular use of spend does not conduct or make
of spend analyses for key goods analysis techniques to regular use of spend
and services? support strategic planning analysis.
• What processes does the and sourcing efforts. ↓ The agency/component
agency/component use to + The agency/component information and financial
conduct a spend analysis? knows how much it is management systems are
• Does the agency/component spending using purchase unable to provide credible,
include purchases made with cards and has considered this reliable and timely data
purchase cards in its spend information in its spend needed to conduct spend
analysis? analysis. analysis.
• If spend analyses have been + The agency/component uses ↓ Information is not
conducted, how were the results a variety of information, maintained in a
used? including financial data to standardized format or is of
conduct a spend analysis and poor quality, thus
it is reflected in the hampering efforts to use
agency/component’s data to more effectively
strategic sourcing plan. At manager the spending of
minimum, the goods and services.
agency/component’s spend ↓ Spend analysis is not
analysis identifies what reflected in the
types of goods and services agency/component’s
are being acquired, how strategic sourcing plan.
many suppliers for a specific
good or service the
agency/component is using,
how much they are spending
for that good or service, in
total and with each supplier,
which units within the
agency are purchasing the
goods and services and what
goods and services have
been or could be purchased
to meet socio-economic
supplier goals.
participates in strategic
sourcing partnerships and
shares its strategic planning
and sourcing information
internally and with other
agencies.

B. Safeguarding the Integrity of Operations and Data
1. Ensuring Effective General and Application Controls

• When was the last information + Evidence in general controls ↓ The agency/component has
systems control review that the structure, policies not recently reviewed the
performed? and procedures, which apply internal controls governing
• What documentation exists on to all or a large segments of its acquisition and financial
the reviews? the agency/component’s systems.
• What issues or problems did the information systems help to ↓ The agency/component has
reviews identify? ensure proper operation, data not addressed all identified
integrity and security.
• How were the issues and major internal control
problems addressed? + Evidence in application issues or established
controls that the structure, corrective action plans.
• What are the unresolved issues
policies and procedures that
or problems?
apply to individual
• What is the impact of the application systems, such as
unresolved issues and problems? contract writing systems,
• What practices and procedures inventory systems produce
does the agency/component use outputs that are complete,
to ensure that hardware and accurate, authorized,
software are reliable, secure and consistent, timely, relevant
user-friendly? and useful for its intended
purpose.
2. Data Stewardship

• How does the + Sufficient resources are ↓ System and data
agency/component ensure that dedicated to ensuring that reviews/tests do not take
data reflected in its knowledge users are provided with place on a routine basis.
and information management
systems have the following
proper system support and ↓ Insufficient support is
use. provided to administer
properties?
+ Systems and data are systems and assist users.
- Integrity of data; routinely monitored and ↓ Corrective actions are not
- Synchronization of data tested for quality and taken in a timely manner to
collection; reliability. address identified
- Reduced data redundancy; + Corrective actions are taken weaknesses.
- Accessibility of data; in a timely manner to ↓ System access rights are
address any identified not sufficiently monitored.
- Transferability of data; and
weaknesses.
- Flexibility in the data ↓ Internal controls are
+ System access rights are insufficient to provide
management process
closely monitored. reasonable assurance that
• Is acquisition system
+ The agency/component’s data are accurate,
administration/support provided
internal controls provide complete, timely and
as a collateral duty?
reasonable assurance that reliable.
• Are systems and data routinely data are accurate, complete, ↓ Data are redundant.
monitored for quality and timely and reliable. Inconsistencies are not
reliability?
eliminated.

• Are corrective actions taken in a + There is consistency among ↓ Data are not accessible to
timely manner when areas of data definitions, sources, authorized users when
weakness are identified? controls and edit routines. needed.
• Are system access rights closely + Managers group data into ↓ Data are unreliable,
monitored? logical categories and collect incomplete or unsuitable
• Are acquisition officials required data according to commonly for efficient and effective
to certify acquisition system data accepted reporting management decisions.
accuracy? timeframes. ↓ Users have little or no
+ Data are redundant only confidence in the
when necessary. credibility of the data and
Inconsistencies are outputs from information
eliminated. systems.
+ Data are accessible to ↓ Management does not
authorized users when periodically test the
needed. reliability of its data.
+ Data can be transferred to
other systems for
operational, analytical and
forecasting processes.

APPENDIX 2: SUPPLEMENTARY
INFORMATION
This appendix discusses three components of the acquisition assessment template -

cornerstones, elements and critical success factors. Discussion focuses on the purpose or
goal of each component of the template.
CORNERSTONE I: Organization Alignment and Leadership

Organizational alignment is the appropriate placement of the acquisition function in the organization, with stakeholders
having clearly defined roles and responsibilities. Executive leadership is key to obtaining and maintaining organizational
support for executing the acquisition function. Executive leadership determines the relationship between the various
functional departments and is key to strengthening the interaction between the agency’s management and employees.
ELEMENTS CRITICAL SUCCESS FACTORS
A. Aligning Acquisition with Agency Mission 1. Assuring Appropriate Placement of the Acquisition
and Needs Function
The end goal of organization alignment is to ensure that There is no single optimal way to organize an acquisition function
the acquisition function enables the agency to meet its in an agency. However, effective organization alignment enables
overall mission and needs. The acquisition function organizations to implement a coordinated and strategically
needs proper management support and visibility within oriented approach to acquisition activities. Agency/component
the organization to meet that goal. assessments of the current placement of its acquisition function
help to determine whether the needs of the agency/component are
being met in an effective manner vis-à-vis acquiring needed
goods and services, supporting strategic decision-making, and
ultimately contributing to the component’s and agency’s overall
business performance.
2. Organizing the Acquisition Function to Operate

Strategically
How an activity organizes and manages its acquisition function
affects its ability to operate strategically. Fragmented business
units tend to reduce the quality and consistency of overall agency
or corporate support.

APPENDIX 2: SUPPLEMENTARY INFORMATION (CONTINUED)
3. Clearly Defining and Integrating Roles and

Responsibilities
An acquisition function that is successful at effectively and
efficiently meeting the agency’s mission generally reflects a
consistent, cross-functional and multi-disciplinary approach. This
approach requires engagement by all relevant stakeholders,
including representatives from program offices, contracting
officials, financial managers, human capital officials, information
technology officials, and other appropriate participants. An
integrated approach helps agencies better define their needs and
identify, select, and manage providers of goods and services.
Agency management at each level of the organization is
responsible for development of an environment that encourages
the establishment of interaction and effective communication
among disciplines that recognizes roles and clear lines of
responsibility.
B. Commitment from Leadership 1. Clear, Strong and Ethical Executive Leadership

Leadership is critical to providing direction and vision This factor will help agencies assess the acquisition function’s
and, if necessary, changing the culture of the direct support from and access to leadership in identifying and
organization. Leaders have the responsibility to set the mitigating risk and promoting the role of acquisition as a
corporate agenda, define and communicate the values strategic business resource in accomplishing mission
and culture of the organization and remove barriers that requirements.
block organizational changes.
2. Effective Communications and Continuous
Congress recognized the critical role leaders play in Improvement
providing direction and vision by requiring certain Management needs to effectively communicate to employees the
civilian agencies to designate a Chief Acquisition mission, values and expectations for the component/agency
Officer to take primary responsibility for managing acquisition function. This can be done through the development,
acquisitions. These responsibilities include evaluating application and active monitoring of meaningful metrics to
the performance of acquisition programs, advising the measure the effectiveness of the acquisition function and to
agency head on business strategies, and directing provide a foundation for continuous improvement.
acquisition policy for the agency.

CORNERSTONE II: Policies and Processes
Policies and processes embody the basic principles that govern the way an agency performs the acquisition function. Ideally,
policies and processes clearly define the roles and responsibilities of agency staff, empower people across the agency to work
together early and effectively to:
develop requirements;
procure desired goods and services;
establish expectations for stakeholders to effectively plan acquisitions; and
proactively manage the acquisition process.
To be effective, policies and processes must be accompanied by controls and incentives to ensure that they are translated into
practice. For the acquisition function, agency/component policies and processes should:
ensure that regulations, federal policies, clauses/provisions, technological processes and procedures are bei
implemented properly and timely;
implemented and used consistently throughout the organization; and
ensure transaction quality and compliance.

Refer to agency internal control guidance for information on requirements and standards related to review processes and
procedures.
A. Planning Strategically 1. Partnering with Internal Organizations

Planning strategically requires attention to the larger Federal Acquisition Regulation (FAR) Subpart 7.102 requires
context within which acquisitions occur. First, it agencies to perform acquisition planning and conduct market
requires identifying and managing relationships among research for all acquisitions in order to promote and provide for:
the parties involved in the acquisition process. Second, (1) acquisition of commercial items to the extent suitable; and (2)
sufficient attention should be given to analyzing full and open competition to the maximum extent practicable.
aggregate agency needs and devising strategic Section 7.102(b) states that:
acquisition plans to meet those needs. Acquisition
planning should also take into consideration the effects This planning shall integrate the efforts of all personnel
of the appropriations process and other external factors responsible for significant aspects of the acquisition. The purpose
on the timing and execution of major contracts. of this planning is to ensure that the Government meets its needs
in the most effective, economical, and timely manner.
This factor assesses the strength and timeliness of the acquisition

function’s engagement with stakeholders from various
disciplines, e.g., finance, legal, program offices, and other
appropriate participants in identifying needs, assessing
alternatives, developing cost-effective acquisition approaches,
allowing for appropriate competition, addressing small business
program requirements and needs and helping to ensure financial
accountability.

2. Assessing Internal Requirements and the Impact of

External Events
Successful acquisition strategies require sufficient attention to
analyzing component/agency needs. Past acquisitions should be
reviewed to identify trends and opportunities for consolidating
similar acquisitions planned in the coming year to leverage
buying power and reduce administrative burdens. Acquisition
planning should take into consideration the effects of the
appropriations process on the timing and execution of major
contracts. Additionally, contracting personnel must be aware of
component/agency strategic plans, congressional mandates,
socioeconomic/small business policy objectives, and other
factors. Acquisition processes should also be sufficiently flexible
to address unforeseen external events and emergencies, e.g. fires,
hurricanes, disasters, etc. This factor will help agencies assess the
acquisition function’s success in monitoring and effectively using
transaction data, strategic planning, and awareness of external
factors and requirements and the ability to manage them.
B. Effectively Managing the Acquisition 1. Empowering of Cross-Functional Teams

Process Using cross-functional teams with the right mix of knowledge,
This element acknowledges the fact that the role of the technical expertise and credibility helps organizations better
acquisition function does not end with the award of define their needs and identify, select and manage providers of
contracts. Acquisitions that help the agency meet its goods and services, which in turn helps support strategic sourcing
needs require continued involvement throughout initiatives and ensures that users’ needs are met at the lowest total
contract performance and close-out. In other words, costs to the organization. Teams generally include representatives
agency processes need to ensure that contracted goods from acquisition, internal users of goods and services and the
and services will be delivered according to the schedule, budget or finance office. They are responsible for analyzing spend
cost, quality and quantity specified in the contract. data, identifying and prioritizing potential opportunities for more
Factors that can help an organization effectively manage detailed review, defining internal needs and requirements and
its acquisition process include empowering cross- conducting market research. Timely establishment of cross-
functional teams, managing and engaging external functional teams and defining clear roles and responsibilities are
suppliers, providing effective monitoring and oversight vital to the acquisition processes, e.g. establishing Integrated
and implementing sound financial accountability Project Teams.
measures.

2. Managing and Engaging Suppliers

One of the 24 initiatives under the President’s Management
Agenda E-Gov program is the Integrated Acquisition
Environment (IAE), which provides Government contracting
personnel with ample opportunity to conduct on-line market
research and monitor suppliers through tools including the
Central Contractor Registration (CCR); Past Performance
Information Retrieval System (PPIRS), which provides timely
and pertinent contractor past performance information to the
Federal acquisition community for use in making source
selection decisions; Excluded Parties Lists System (EPLS),
which identifies those parties excluded throughout the U.S.
Government (unless otherwise noted) from receiving Federal
contracts, certain subcontracts, or financial assistance;
FedBizOpps.gov, the single government-wide point-of-entry for
Federal government procurement opportunities over $25,000; and
the On-line Representations and Certifications Application
(ORCA) designed to replace the paper-based representations and
certifications process.
This factor assesses the acquisition community’s awareness and

use of these tools to identify suppliers and manage supplier
relationships thereby encouraging competition, enhancing price
analysis, contractor quality and performance. In addition, it
supports consideration of how well the agency/component
establishes meaningful and measurable performance metrics,
proper application of awards and incentives, past performance
evaluation and reporting and processes for soliciting and
evaluating contractor feedback.
3. Monitoring and Providing Oversight to Achieve

Desired Outcomes
This factor assesses the quality of the agency/component’s
monitoring and oversight processes by evaluating the tools (e.g.
earned value management), processes and controls the function
uses to ensure effective monitoring of contractor performance
and of employees making purchases. This factor will help
agencies answer the following questions about those who
monitor and provide oversight of contracts: Are the roles and
responsibilities of those who perform contract management and
oversight clearly defined? Do these individuals have the right
skills and training to ensure that contractors provide the needed
goods and services?

4. Enabling Financial Accountability

Throughout the acquisition process financial information should
be tracked and communicated in a way that enables effective
evaluation and assessment of acquisition activities. When
financial data are not useful, relevant, timely or reliable, the
acquisition function, as well as other functions across an
organization, is at risk of inefficient or wasteful business
practices.
Standardized on-line procurement systems such as FPDS and

CCR can provide acquisition staffs with access to critical
financial and vendor information. Procurement systems with
financial interfaces eliminate the need for independent entry of
the same data by acquisition and financial staffs. This factor
assesses the acquisition function’s access to, and most
importantly, use of financial information.
C. Promoting Successful Outcomes of Major 1. Using Sound Capital Investment Strategies

Projects a. Integrating Organizational Goals into the Capital
The federal government spends billions of dollars each Decision-making Process
year on major physical capital investment projects and Capital decision-making begins by defining the organization’s
to research, develop, and produce large custom projects. mission in comprehensive terms and results-oriented goals and
Capital investments and custom projects are generally objectives. This process enables managers to identify resources
expensive, span multiple years, and are crucial to the needed to satisfy program requirements based on program goals.
agency’s strategy. Capital investments therefore usually This factor will help agencies assess the extent that capital
require more analysis, support, and review than projects decision-making supports organizational goals.
that cost less, have shorter time frames, or have less
agency-wide impact. Particular attention must be given b. Evaluating and Selecting Capital Assets Using an
Investment Approach
to these long-term, capital-intensive projects.
An investment approach builds on an agency’s assessment of
To ensure an effective capital investment strategy where it should invest its resources for the greatest benefit over
leading organizations: (a) integrate organizational goals the long term. Projects that are expensive, span multiple years
into the capital decision-making process, (b) evaluate, and are crucial to the agency’s strategy generally require more
select, and control capital assets using an investment analysis, support and review than projects that cost less, have
approach and (c) balance budgetary control and shorter timeframes or less agency-wide impact. This factor will
managerial flexibility when funding capital projects. help agencies assess the effectiveness of its investment approach.

Early and active participation by the acquisition c. Balancing Budgetary Control and Managerial
Flexibility
function in developing acquisition strategies as part of
an Integrated Project Team is crucial to the capital In the federal environment, to mitigate the risks of unplanned
planning effort. Numerous studies and reports have changes in future budgets, agencies may budget for “useful
identified the root cause of capital asset and major segments” of capital projects. [NOTE: The OMB has defined a
acquisition failures to include: “useful segment” as a component that (1) provides information
that allows the agency to plan the capital project, develop the
Lack of defined benchmarks design, and assess the benefits, costs, and risks before
Ineffective prioritization and resource proceeding to full acquisition (or canceling the acquisition) or
allocation (2) results in a useful asset for which the benefits exceed the
costs even if no further funding is appropriated. See OMB
Poor alignment between authority, Circular A-11, Supplement to Part 7, Capital Programming
accountability and responsibility Guide.] This factor assesses whether agencies’ are employing
Insufficient staffing, inadequate skills, best practices for managing the budgets of capital projects.
inadequate training 2. Employing Knowledge-Based Acquisition
Approaches
Which cause:
The Federal government spends billions annually to research,
Poor front-end planning before establishing develop and produce large custom projects. Undesirable
project baselines acquisitions occur, however, because agencies/components
Poor risk identification, assessment, and/or proceed further into development or production without obtaining
management sufficient knowledge that the product will be able to meet
established cost, schedule, performance and quality targets. The
Poor acquisition strategies and planning risk of undesirable acquisition outcomes can be significantly
Contract awards before independent reduced by employing a knowledge based acquisition approach.
estimates
GAO has identified three discrete points in the development
Inadequate ownership/accountability process at which obtaining certain levels of knowledge promote
successful outcomes. The attainment of each successive
This element, as well as other elements and critical
knowledge point builds on the preceding one, as follows:
success factor help agencies to identify contributing
factors that lead to weaknesses in the capital asset and Knowledge point 1: A match between resources and needs occurs
major acquisition process. when the customer’s requirements and the available resources,
which are knowledge, time and funding – correspond. Achieving
a high level of technology maturity at the start of development is
an important indicator of whether this match has been made.
Knowledge point 2: Design stability occurs when a program

determines that a product’s design is stable, that is, it will meet
customer requirements and cost and schedule targets.
Knowledge point 3: Production process maturity occurs when it

has been demonstrated that the product can be manufactured
within cost, schedule and quality targets and that the process is
repeatable and sustainable.

CORNERSTONE III: Human Capital
Human capital policies and practices should support an organization’s overall mission and performance goals. Human capital
permeates virtually every effort within an agency, including successfully acquiring goods and services and executing and
monitoring contracts. Effective human capital management ensures that an agency has the right staff in the right numbers
applying skills where needed to accomplish the mission effectively.
A. Valuing and Investing in the Acquisition 1. Commitment to Human Capital Management

Workforce This factor assesses the commitment of component/agency
Successful acquisition efforts depend on agency management in valuing and investing in its acquisition
leadership and management valuing and investing in the workforce. NOTE: Performance metrics/results, surveys, and
acquisition workforce. interviews are especially important in supporting assessment in
this area.
2. Role of the Human Capital Function

The human capital function should incorporate a strategic
approach for accomplishing the agency/component’s mission and
programs. This requires the agency/component to ensure that
human capital professionals are considered and used as trusted
advisors and partners of senior leaders and acquisition managers.
To accomplish this, agency/component leaders need to ensure
that human capital professionals have the appropriate authority,
competencies and experience.
B. Strategic Human Capital Planning 1. Integration and Alignment

By focusing on recruiting, hiring, training and This factor assesses the agency/component’s success in
professional development, strategic workforce planning developing strategic human capital plans that incorporate the
outlines ways to help the agency fill gaps in knowledge, needs of the acquisition function. This factor will assess whether
skills and abilities. managers take a corporate approach versus a unit-centric human
capital approach to recruit, hire, and manage their contracting
support. Unit-centric human capital approaches tend not to show
consideration of how well the unit’s contracting function
supports Government-wide qualification requirements or
agency/component-wide goals or strategies.
2. Data-Driven Human Capital Decisions

A fact-based performance-oriented approach to human capital
management is crucial to maximizing the value of human capital
and managing risk. This factor assesses the adequacy of data and
the effectiveness with which it is used in making human capital
decisions related to the acquisition workforce.

C. Acquiring, Developing, and Retaining 1. Targeted Investments in People

Talent This factor assesses the adequacy of the agency/component’s
Recent trends in hiring and retirements in the federal investment in and enhancement of the value of their acquisition
government will leave many agencies with workforce staff. Investing in training for the acquisition workforce is
imbalances in terms of skills, knowledge and critical to ensuring that better informed business guidance is
experience. Without sufficient attention given to provided and adequate oversight of the quality, cost and
acquiring, developing and retaining talent, federal timeliness of goods and services delivered by third parties.
agencies could lose a significant portion of their
contracting knowledge base. 2. Human Capital Approaches Tailored to Meet
Organizational Needs
Existing laws, rules and regulations provide agencies with
flexibility to offer competitive incentives to attract skilled
acquisition employees, to create performance incentives and
training programs. This factor assesses agency/component use of
these flexibilities to build and maintain their acquisition
workforce.
D. Creating Results-Oriented Organizational 1. Empowerment and Inclusiveness

Cultures This factor assesses management’s success in getting acquisition
Leading organizations foster a work environment in employees at all levels of the organization involved in the
which people are empowered and motivated to planning process to develop mission goals and objectives from a
contribute to continuous learning and mission front-line perspective.
accomplishment.
2. Unit and Individual Performance Linked to
Organizational Goals
This factor assesses whether the agency/component employs an
effective performance management system, through which,
among other things, acquisition employee performance plan
metrics are clear and consistent, and provide a “line of sight”
between individual activities, organizational requirements, e.g.
OMB Circular A-123 compliance, Government, agency or
component management initiatives and organizational results.
For example, do senior management performance requirements
cascade to employee performance plans in a clear and consistent
manner?

CORNERSTONE IV: Information Management & Stewardship
Information management and stewardship refers to a variety of technologies and tools that help managers and staff make
well-informed acquisition decisions. Such decisions have a direct impact on many levels, including program and acquisition
personnel who decide which goods and services to buy, project managers who receive the goods and services from
contractors, commodity managers who maintain supplier relationships, contract administrators who oversee compliance with
the contracts, and the finance department, which pays for the goods and services. They all need meaningful data to perform
their respective roles and responsibilities in an effective manner.
A. Identifying Data and Technology that 1. Tracking Acquisition Data

Support Acquisition Management Decisions
There is a wealth of acquisition data available to contracting
Leading organizations gather and analyze data to identify
personnel from a variety of sources. Some of the data provided
opportunities to reduce costs, improve service levels,
from these sources identify what the agency/contracting activity
measure compliance with supplier agreements and
buys, how much it buys, and the procurement methods used.
provide better management of service providers.
The data can be used for many purposes including the
Information systems help managers learn how much is
elimination of redundancies, identification of strategic sourcing
being spent with which service provider and for what
opportunities, internal control monitoring purposes, highlighting
supplies or services. Additionally, data collected in
areas where additional/supplementary training is necessary and
support of meaningful metrics can assist agencies track
workload management (office to agency-wide). This factor
achievements in comparison with plans, goals and
assesses how accurately transaction data are reported and the
objectives. They can also allow agencies to analyze
effectiveness with which the data are used.
differences between actual performance and planned
results. Generating meaningful data, however, requires 2. Translating Financial Data into Meaningful Formats
good data stewardship. New technology tools can generate volumes of data, but the data
are meaningless unless they can be translated into relevant
understandable formats for acquisition officials. Financial
information is meaningful for acquisition officials when it is
relevant, timely and reliable enabling the information can
enable managers to manage costs, measure performance and
make program funding decisions. This factor will help agencies
assess whether they are using meaningful data.
3. Analyzing Goods and Services Spending

Leading organizations continually analyze their spending on
goods and services to answer basic questions about how much is
being spent and where dollars are going. When organizations
complete spend analyses they often realize they are buying
similar goods and services from numerous providers often at
greatly varying prices. Conducting a spend analysis is also the
first step in developing a comprehensive strategic sourcing plan.
This factor will help agencies assess whether they are
effectively using data to analyze spending trends for goods and
services.

B. Safeguarding the Integrity of Operations and 1. Ensuring Effective General and Application
Data Controls
Internal controls, such as policies and procedures, This factor addresses both general and application controls.
promote efficiency, reduce the risk of asset loss, help General control applies to all information systems and includes
ensure that financial and acquisition management systems agency/component-wide security program planning,
issue reliable reports and that the organization is in management control over data center operations, system
compliance with laws and regulations. It is essential that software, acquisition and maintenance, access security and
acquisition management systems contain appropriate, application system development and maintenance. Application
cost-effective controls to safeguard assets, ensure control is designed to help ensure the completeness, accuracy,
accurate aggregation and reporting of information and authorization and validity of all transactions during application
support the accomplishment of organizational objectives. processing.
Internal control actions and activities occur throughout General and application controls over computer systems are
organizational programs and operations and on an on- interrelated. General control supports the functioning of
going basis. The element addresses how well application control and both are needed to ensure complete and
management balances safeguards with the need to make accurate information processing.
accessible, timely and accurate data available to
managers and others needing acquisition information. 2. Data Stewardship
This factor helps agencies evaluate the effectiveness of their
There are two broad groupings of information systems data stewardship internal controls. Effective data stewardship
controls that help safeguard the integrity of operations ensures that data captured and reported are accurate, accessible,
and data: general controls and application controls. timely and usable for acquisition decision-making and activity
Assessing general and application controls is a technical monitoring. Effective stewardship provides the structure,
analysis and requires the assistance of persons oversight and assurance that data can be accurately translated
knowledgeable in computer systems evaluation. into meaningful information about organizational activities.
Taking the time to manage quality of data ultimately helps
support the agency/component’s acquisition management needs.

APPENDIX 3: RESOURCES AND
REFERENCES
The following is a list of suggested resources and references that can be helpful in preparing for and
conducting reviews/assessments using the template:
OMB Circular A-123 (Revised);
Agency internal control guidance;
Government Accountability Office’s Framework for Assessing the Acquisition Function at

Federal Agencies (GAO-05-218G) and Internal Control Management and Evaluation Tool
(GAO-01-1008G);
OMB Circular A-11, Capital Programming Guide (V. 2.0) (June 2006);
Headquarters staff knowledge gained from on-going day-to-day work within the
agency/component acquisition function;
Review and analysis of acquisition data as reported to the Federal Procurement Data System
(FPDS), e.g. competition trends, small business program and accomplishments and amounts
spent on products/services;
Acquisition performance metrics used by the agency/component and accomplishments;
Functional/performance review reports for acquisition;

Review/sample of acquisition transaction files;
Annual agency report on performance and accountability;
Agency/component strategic plan;

Agency/component capital planning and investment control policy;
Agency/component Administrative Manual [pertinent parts and chapters];
Staffing and organization charts/descriptions for the acquisition organization under review;
Federal Acquisition Certification in Contracting (FAC-C), Federal Acquisition Certification

for Program and Project Managers (FAC-P/PM), Federal Acquisition Certification for
Contracting Officer Technical Representatives (FAC-COTR) and/or Defense Acquisition
Workforce Improvement Act (DAWIA);
ACMIS data for the acquisition organization under review;
Supervisory contracting officer and staff annual performance plans;

Copies of draft and final acquisition management review reports of field level activities;
Pertinent Office of Inspector General and Government Accountability Office reports;

APPENDIX 3 RESOURCES AND REFERENCES (CONTINUED)
Agency/component directives, policies, handbook and descriptions of procedures involving

the acquisition function;
Agency/component acquisition inter/intranet sites;
Interviews with stakeholders;

Agency/component annual competition reports;
Agency/component reports related to socio-economic contracting accomplishments;
Agency/component guidance/supplements to FAC-C, FAC-P/PM, FAC-COTR or DAWIA

equivalents;
Agency/component acquisition-related performance metrics;
Agency/component human capital studies including skills gap analyses related to

acquisition workforce;
FAI Annual Report (www.fai.gov);
OMB Policy Letter 91-3, Reporting Nonconforming Products

FPDS verification and validation plan; and
OMB’s Guidance on Future Data Submissions under the Federal Funding Accountability
and Transparency Act (FFATA), dated March 6, 2008) (OMB Memorandum M-08-12)

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EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

May 21, 2008

MEMORANDUM FOR CHIEF ACQUISITION OFFICERS

FROM: Paul A. Denett

SUBJECT: Conducting Acquisition Assessments under OMB Circular A-123

In 2005, the Government Accountability Office (GAO) developed a framework to promote

A number of agencies, including the Departments of Defense, Energy, Homeland Security,

cc: Senior Procurement Executives

GUIDELINES FOR ASSESSING THE ACQUISITION FUNCTION

APPENDIX 1: ACQUISITION ASSESSMENT TEMPLATE…..…….…………5

APPENDIX 2: SUPPLEMENTARY INFORMATION….....…………..…………..40

APPENDIX 3: RESOURCES & REFERENCES………..………………………….51

OMB Circular A-123, Management's Responsibility for Internal Control

Services Acquisition Reform Act (SARA) of 2003 (41 U.S.C. 414)

MAY 2008 Page 1 of 52

Standardization. As part of their responsibility for monitoring the performance of acquisition

MAY 2008 Page 2 of 52

acquisition assessment need to be addressed in an annual assurance statement required by the

 Ensuring that assessment objectives are clearly communicated throughout the

 Determining the frequency of reviews/assessments based on risk;

 Monitoring the progress of corrective action implementation; and

 the description of requirements to satisfy agency needs;

 solicitation and selection of sources;

MAY 2008 Page 3 of 52

 effectiveness and efficiency of operations;

 reliability of financial reporting; and

 compliance with applicable laws and regulations.

MAY 2008 Page 4 of 52

CORNERSTONES ELEMENTS CRITICAL SUCCESS FACTORS

B. Effectively Managing the 1. Empowering of Cross-Functional Teams (pg. 17)

C. Promoting Successful 1. Using Sound Capital Investment Strategies (pg. 23)

B. Strategic Human Capital 1. Integration and Alignment (pg. 29)

C. Acquiring, Developing, 1. Targeted Investments in People (pg. 32)

D. Creating Results-Oriented 1. Empowerment and Inclusiveness (pg. 33)

MAY 2008 Page 6 of 52

CORNERSTONE I: ORGANIZATION ALIGNMENT AND LEADERSHIP

A. Aligning Acquisition with Agency Mission and Needs

1. Assuring Appropriate Placement of the Acquisition Function

CONSIDER LOOK FOR BEWARE OF

MAY 2008 Page 7 of 52

2. Organizing the Acquisition Function to Operate Strategically

CONSIDER LOOK FOR BEWARE OF

MAY 2008 Page 8 of 52

• Does the agency/component use

3. Clearly Defining and Integrating Roles and Responsibilities

CONSIDER LOOK FOR BEWARE OF

MAY 2008 Page 9 of 52

B. Commitment from Leadership

1. Clear, Strong, and Ethical Executive Leadership

CONSIDER LOOK FOR BEWARE OF

MAY 2008 Page 10 of 52

• Do internal control activities + Actions taken to address

MAY 2008 Page 11 of 52

• Does management take a

2. Effective Communications and Continuous Improvement

CONSIDER LOOK FOR BEWARE OF

MAY 2008 Page 12 of 52

• What metrics does the ↓ The agency/component has

MAY 2008 Page 13 of 52

CORNERSTONE II – POLICIES AND PROCESSES

1. Partnering with Internal Organizations

Ensuring that assessment objectives are clearly communicated throughout the

Determining the frequency of reviews/assessments based on risk;

Monitoring the progress of corrective action implementation; and

the description of requirements to satisfy agency needs;

solicitation and selection of sources;

effectiveness and efficiency of operations;

reliability of financial reporting; and

compliance with applicable laws and regulations.