Acquisition and Planning Strategy for Obtaining a Contract

Answer

Introduction

Information technologies have contributed to the digitalization and automation of business processes. As a result, it has enhanced the effectiveness of managing different activities across businesses. This trend is not only noted in private enterprises but also across public sectors. This is the case with the government’s introduction of the GSA SmartPay program, which is useful in electronic contracting across different government agencies. According to GSA (2020), the smart pay program is the largest government payment solution globally. It has more than three million integrated accounts, purchase, travel, and fleet accounts that support the acquisition and planning of contracts. This program is applied in Navy contracts and other government dealings. This is the case with Floor Refinishing Inc., which seeks to enter into a contract with the Navy to provide specialty coating products, make applications, and conduct regular maintenance. Against this backdrop, this paper creates an acquisition and planning strategy that uses an electronic contracting program to help a company obtain a contract.

Acquisition and Planning Strategy

According to Kendall (2017), an acquisition plan strategy provides a roadmap for the investment life-cycle acquisition segment. It describes the approach taken to acquire capabilities required to fulfill a contract's obligations, especially those involving capital investment. For this particular document, it outlines the factors, assumptions, and approaches that guide acquisition decisions. The acquisition plan is aimed at identifying risks and tradeoffs required to mitigate the risks.

Background and Objectives

Investment Title and Description

Floor Refinishing Inc. acquisition and planning strategy for providing specialty coating products for marble floors and ceramic tiles to Navy at the local base.

Investment Objective

The investment is intended to facilitate the production, application, and maintenance of the specialty coating product for tiles and floors. The second objective is to acquire and train five more employees to help in production and maintenance activities. These two objectives will enable Floor Refinishing Inc. to achieve its strategic and financial goals. These goals are to enhance the efficiency of production, application, and maintenance. The financial goals are to reduce operating costs and optimize profit margins.

Statement of Need

After patenting the specialty coating product, more customers will certainly gain interest in the product. It is anticipated that the company will experience an increase in demand, which creates a need for more production units and application and maintenance. Delays in these activities could negatively impact the reputation of Floor Refinishing Inc. Therefore, the best controls to put in place to ensure that these needs are met is to introduce an Enterprise Resource Planning System that will automate the process and give real-time updates and feedback on the progress of each of the activities.

Business Strategy

The most appropriate business strategy entails sourcing raw materials and processing the finished product at the Floor Refinishing Inc. enterprises. However, in the future, these activities can be licensed to other companies in foreign countries to ease internationalization.

Contracting Strategy

This section of the plan outlines the contracting approaches used when making an offer to the Navy. Glas, Schaupp, and Essig (2017) note four types of contracts in the construction industry. Given that floor refinishing is a part of this industry, it could apply cost-plus contracts, fixed-price contract types, time and material contracts, or unit pricing contracts. Patrucco et al. (2017) explain that fixed-price contracts charge a one-time cumulative price for construction-related activities. Cost-plus contracts entail payment of actual costs and expenses arising from the construction activities. Time and materials contracts use daily or hourly rates to estimate expenses and costs. It is used when the scope of projects is not clearly defined. The unit pricing contracts are preferred by federal agencies where prices are set during the bidding process. Companies tendering for contracts have to specify each item's prices to be supplier per quantity and quote additional costs such as labor and maintenance. For this federal project, the unit pricing contract is preferable since the Navy will be charged for the units sold and the other services supplied according to predetermined unit cost for delivering the service.

Major Contracts

Floor Refinishing using specialty coating product is a new and highly innovative product. As a result, there are no competitors yet. The company will be the sole source of the product; however, it competes against other alternative products such as laminate and vinyl sheets, which require different products for coating and improvement. Once Floor Refinishing Inc. conducts intensive marketing, it will attract customers using marble floors and ceramic tiles. However, at the moment, its key target is the Navy.

Incentives

The main incentives to be derived from the contract is its focus on electronic contracting under the Technology Development Strategy (TDS). This strategy will perfectly align with Floor Refinishing Inc.’s ERP system.

Technical Data Management

The Acquisition Category (ACAT) strategy will be used in programs I and II to assess the system's long-term data needs. Besides, the GSA SmartPay Program will be used in electronic contracting processes. Federal agencies prefer this program since it provides commercial payment solutions and supports official contracts by the government agencies. Second, it facilitates the streamlining of payment, procurement, and ordering procedures. Third, it enables the government and contracted firms to reduce administrative costs since it simplifies operations. Fourth, it improves operations by the government by simplifying financial processes. Fifth, the GSA SmartPay Program allows greater accountability in government operations. These attributes are beneficial to entities such as Floor Refinishing that are seeking to secure a government contract.

Sustainment

This section details the performance-based agreements and sustainment-related contracts between contracted firms and government agencies. It describes how integrated product support packages can be acquired through the system. The sustainment of the contract for Floor Refinishing Inc. should be more than one year. This will ensure the contract provides long-term benefits for both the government agency and the firm providing the specialty coating product and associated services.

Conclusion

This paper details the acquisition plan strategy used by Floor Refinishing Inc. to win over the Navy's government contract. The company provides specialty coating products and associated services. This document begins with a background and objectives section, which states the title and description of the investment, its objectives, statement of need, and assessment of its criticality and capabilities. This section is followed by explaining the business strategy, contracting strategy, major contracts, incentives, technical data management, and sustainment. The technical data management section details how ERP and GSA SmartPay Program and other electronic contracting programs can help companies obtain government contracts.