PROJ6004 Contracts and Procurement

Acquisition Planning Fundamentals:

An acquisition planning can be considered as critical planning that is used for identifying and describing the approach of acquisition followed by a management program. This is mainly used for meeting the required objectives and managing the program risks. Regarding program execution and acquisition planning, it is very important (Soini, 2018). In this case, three distinct acquisition planning fundamentals include contracting strategy, sustainment, and business strategy. These are discussed in the following section.

Contracting Strategy:

Contract strategy is important to identify the analysis, explanation, and rationale behind the contracting strategy. Contracting strategy is crucial for identifying the importance of selecting some particular incentives so that the contractor can be motivated (Fazekas et al., 2018). This is very obvious that the motivated contractors will perform better as they will feel greater value due to the incentives. A motivated contractor means good service. Incentives will be provided depending on the supply of quality products and services (Kiengsiri et al., 2020). Therefore, by providing the motivational incentives, high-quality Piezoelectric Embedded Transducers (PET) can be obtained here. Also, different types of quality products can be achieved from different suppliers due to the provided incentives.

Sustainment:

Sustainment defines the acquisition strategy's ability to fulfill the arrangements that have been created at the time of contracting. For all of the acquisition strategies, it is important to provide an overview regarding the sustainability of the performance and contract. There are different types of conditions that are followed during an agreement. In this case, it is important that data and hardware be covered and performance measures are utilized, which needs to be used for assessment purposes. It is important for the contractor to provide appropriate evidence of how they will sustain the contract. In this case, the sustainability of the contractor will be considered if they prove their ability to maintain the contract to the end of the tender (Krahmann, 2017). Here, tenders should be provided to quality contractors who can provide proper products throughout the contract, so that any type of inconveniences and issues in the department can be avoided.

Business Strategy:

Business strategy is important to address the primary approach during the contract. This approach can include mechanisms for sought competition, source selection, contract type, and processes for promoting sustained competition (Yuan et al., 2020). Management of business strategy is dependent on the ability of the business for promoting and sustaining future competition and selecting proper sources from where import of Piezoelectric Embedded Transducers will be done. Business strategy also provides important guidance regarding the contract type and the process that needs to be followed to ensure better results (Carril & Duggan, 2020). An appropriate business strategy is required to ensure proper sourcing of PET.

Contract Type for the Deliverable Line Items:

Considering the current development, a procurement process will be the best suitable contract for delivering software, hardware, data, and support. A procurement process can be considered as an agreement where the buyer agrees to collect the services or product from the owner in exchange for consideration (Liu et al., 2019). Under the procurement process, a fixed-price contract should be used here. By using this type of contract, the seller of PET will sell them at a set price. It means that the price of the product will remain constant and will not fluctuate, which is a very important advantage here. If this contract is used properly, then it can be beneficial for both the seller and buyer. So, the fixed-price contract should be used here. These types of agreements are written agreements that define the obligation of each party regarding the transaction. The three specific performance factors which can affect the choice of contract type include financial changes, political changes, and technological advancement. These are discussed in the following section.

Financial Changes:

Changes in the financial condition can determine the obligation of the contract and the performance of PET. If any changes are made in the financial condition, then it will be reflected in the currency, which will have an adverse effect on the performance of PET. For this particular case, if the financials are in good condition then the total contract that has been given for the PET will provide a higher return on investment, but in case of instability in the financial condition, it may not perform as expected (Benlemlih et al., 2018). For this reason, economic surveys are required to analyze the financial situation. In this way, financial changes will directly affect the contracting process of PET.

Political Changes:

Governmental changes and international political changes can also affect the contracting process of PET. In the US, if any changes are done in the government then it can be the reason for changes in taxes during the procurement of PET. Also, policies might be changed depending on which the PET needs to be sold. International political changes can also affect the procurement process of PET, depending on which the contracting will be also changed (Katare et al., 2017). An increased amount of tax can lead to poor performance of PET sales. Also, changes in the government may provide aid to PET for expanding the existing market. In this way, political change can be both good and bad for PET contracting.

Technological Advancement:

Advancement in technologies can highly influence the performance of PET. Improved technology with time will influence the purchasing behavior of the consumers. Most of the customers prefer to purchase products, which are up-to-date in the technological department (Rashidi & Yusup, 2017). Therefore, advancement in technology will be beneficial for PET as more customers will prefer to purchase it. Technological advancement is not always good, as it can also lead to inefficiency of the PET developed by the organization. Therefore, in this way, technological advancement can also affect the contracting process in both bad and good ways.

References:

Benlemlih, M., Jaballah, J., & Peillex, J. (2018). Does it really pay to do better? Exploring the financial effects of changes in CSR ratings. Applied Economics, 50(51), 5464-5482.

Carril, R., & Duggan, M. (2020). The impact of industry consolidation on government procurement: Evidence from department of defense contracting. Journal of Public Economics, 184, 104141.

Fazekas, M., Ferrali, R., & Wachs, J. (2018). Institutional quality, campaign contributions, and favouritism in US federal government contracting. Working Paper series: GTI-WP/2018: 01. Government Transparency Institute.

Katare, B., Serebrennikov, D., Wang, H. H., & Wetzstein, M. (2017). Social-optimal household food waste: Taxes and government incentives. American Journal of Agricultural Economics, 99(2), 499-509.

Kiengsiri, J., Rieger, C., & Walsh, C. (2020). Analysis of the Multiple Award Contracting Strategy on US Government Husbanding Service Provider (HSP) Prices (Doctoral dissertation, Acquisition Research Program).

Krahmann, E. (2017). From performance to performativity: The legitimization of US security contracting and its consequences. Security dialogue, 48(6), 541-559.

Liu, C., Chen, W., & Mu, J. (2019). Retailer’s multi-tier green procurement contract in the presence of suppliers’ reference point effect. Computers & Industrial Engineering, 131, 242-258.

Rashidi, N. A., & Yusup, S. (2017). A review on recent technological advancement in the activated carbon production from oil palm wastes. Chemical Engineering Journal, 314, 277-290.

Soini, V. (2018). Is it transformative or not? The characteristics of private equity investors’ acquisition planning.

Yuan, Y., Lu, L. Y., Tian, G., & Yu, Y. (2020). Business strategy and corporate social responsibility. Journal of Business Ethics, 162(2), 359-377.

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