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CHAPTER XI: KEY TOPICS
PART B: COMPETITION
Purpose: This section addresses competition, an issue which must be addressed at several points in a program or
system's acquisition. It can be a major stumbling block in Acquisition Planning Document approval, and it can be
a powerful and beneficial method of contracting.
Background: Consideration of competition in contracting is required by law (Competition in Contracting Act
(CICA) of 1984), regulation, and policy. To procure using other than competition requires obtaining specific
exception authority, and in most cases, approval in the form of a J&A or D&F (NAVAIRINST 4200.31C).
Discussion: In the life cycle of a system acquisition, there are two basic types of competition - design competition
and production competition. Design competition occurs early in the acquisition's life cycle (during concept
exploration, demonstration/validation, and possibly E&MD). The objective of design competition is risk reduction,
which can be achieved by selecting the one system or concept that will best meet the Government's needs from the
competing alternative approaches proposed. Design competition involves two or more contractors competing
separate designs without sharing information. Production competition occurs later, when the design specification
is stable or when two or more contractors are producing similar or identical systems. Competing contractors may
be proposing to the same Government provided specifications. The objective is generally to obtain the required
item at a lower cost or price.
Design competition is expensive and the longer design competition is continued the more expensive it becomes.
If the demonstration/validation phase is structured so prototypes of competing systems are produced and tested, it
is possible to make design selection before starting Engineering and Manufacturing Development (E&MD). One
design would provide considerable savings over the cost of taking two or more systems into E&MD.
Whereas design competition is relatively short-lived, production competition may be beneficial throughout the
production and maintenance phases, until a final competitive buy-out occurs. Production competition frequently
requires competitors to build the same system and to share data and know-how. This often results in contractors
teaming with one another, enhancing the maintenance of a competitive base.
A single, integrated procurement planning agreement should be developed that addresses all critical issues,
including:
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Funding
Schedule
Configuration management
Technology transfer
Non-Developmental/Commercial Items
Contractual arrangements
Second source qualifications
Conversion from CFE to GFE
Several detailed references on competition exist, including the Federal Acquisition Regulations (FAR), the DoD
supplement to the FAR (DFARS), the Navy supplement to the FAR (NAPS), DoD Directive 5000.1, DoDINST
5000.2, NAVAIRINST 4200.39, and various implementing Navy and NAVAIR instructions, including
SECNAVINSTs 4210.6A and 5000.2A and NAVAIRINST 4200.5C. Also helpful are "The Navy Competition
Handbook" issued April 1989 by the Competition Advocate General of the Navy in the Office of the
ASSTSECNAV, the Defense Systems Management College (DSMC) Handbook "Establishing Competitive
Production Sources", DSMC PM Notebook Fact Sheets 3.1.3 and 6.2.2, and the "Naval Aviation Systems Team
Competition Handbook" issued May 1994.
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