What’s the Difference Between a Contracting Officer and a Purchasing Agent?
Every year, the Department of Defense spends hundreds of billions of dollars on service contracts and contractors, around $400 Bn to $430 Bn. Facilitating this massive annual spending effort is a veritable army of individuals whose primary purpose is to ensure these transactions happen smoothly and legally. These individuals are known as contracting officers and purchasing agents.
A purchasing agent and a contracting officer are two distinct roles in the procurement process, with different responsibilities and requirements, despite their similar-sounding titles. Purchasing agents are responsible for procuring goods and services for an agency or specific organization within an agency, while contracting officers are responsible for awarding and managing government contracts.
The role of a purchasing agent involves negotiating prices, reviewing requisition requests, and determining reasonable prices for goods and services. The catalysts are contracting officers who are responsible for ensuring that government contracts are awarded under applicable laws and regulations. We’re going to take a deep dive into the differences (and similarities) between these roles.
Introduction to Government Contracting
To put it plainly, the government would cease to function if it stopped outsourcing to contractors for service contracts and parts, supplies, and other durable goods.
The entire TRANSCOM mission would collapse in aviation alone, as all maintenance is handled through third-party contractors. This includes all C-12, C-26, UC-35, and C-37 missions, which would come to a halt. Also, the entire U.S. Army Rotary Wing training program would end, as all of the instructors are contractors. The U.S. Air Force UPT and U.S. Navy Flight School? Also done, since all maintenance is contracted.
Government contracting involves awarding contracts to vendors for the provision of goods and services to the federal government. For this article, we are primarily focusing on the Department of Defense and other federal agencies and their respective purchasing managers.
The federal government spends hundreds of billions of dollars annually on contracts, making it a significant business market. Again, the DoD alone spends around half a trillion dollars annually. With thousands of weapons systems (possibly even tens of thousands) in the collected inventory, the demand for contractors with knowledge and experience in these systems is consistently high.
Government contracts are subject to thousands of pages of laws and regulations, including those related to procurement, contracting, and vendor relationships. The People have a right to expect transparency and fairness in what the government buys, so the role of a contracting officer is sensitive and very important.
The General Services Administration (GSA) is one agency responsible for overseeing government contracting and providing guidance to contracting officers. Every agency has its contracting officers and trains them in its policies and procedures. The GSA primarily manages and awards government-wide acquisition contracts for common goods and services. The GSA establishes and tends to programs like the Federal Supply Schedule (GSA Schedule).
Why is this important? Most of the day-to-day materials used across the federal government need to be procured through or are procured more easily through a GSA Schedule contract. The intention here was to streamline the process and relieve some of the pressure on contracting officers.
Take a storage locker. The GSA pre-approves vendors to provide this item, and then it is made available on GSA Advantage! This way, these common items are approved for purchase, so a contracting officer does not need to vet suppliers and approve the buy. GSA Advantage and the GSA Schedule are huge efficiency boosters in that way.
Role of a Contracting Officer
Alright, now we're going to look at the contracting officer. A contracting officer is responsible for awarding and managing government contracts on behalf of a federal agency. Every agency has its own contracting officers who are familiar with the processes and laws/regulations pertinent to that agency.
The role involves ensuring that contracts are awarded by applicable laws and regulations, specifically those governing procurement and contracting. This goes back to earlier in the article, about the expectation of transparency. Contracting officers have specialized training and experience in government contracting, and as the old saying goes, there is no substitute for experience.
Besides the regulatory and legal aspects of the job, contracting officers have to negotiate prices and administer contracts, ensuring that the government receives the best value for its taxpayer dollars. Contracting officers are critical in ensuring government contracts are awarded fairly and transparently. This is paramount at all procurement levels, but consider the effects at the local level for something as seemingly benign as replacing a sidewalk.
The CO will have local bidders on the contract, which are small businesses that know each other, have employees who live in the local area, etc. It does not take much imagination to understand how important a fair contracting process is.
Purchasing Agent Responsibilities
While the name does sound similar, purchasing agents are in a different position. For one thing, the PA is oftentimes a secondary role for the PA rather than their primary position. Even a small organization may have several purchasing agents.
A purchasing agent is responsible for procuring goods and services for a company or organization. These people are also referred to as the “cardholders” and can make approved purchases, namely through GSA Advantage, where the purchase price is already predetermined and fixed.
The most important difference between a contracting officer and a purchasing agent is that the CO has the legal authority to bind the federal government to a contract, while the PA does not. The PA is responsible for executing a purchase that has already been authorized.
Government Contracting Process
The government contracting process is a complex and multi-step process, involving several key stages that include reviewing procurement notices, submitting proposals, and negotiating contracts.
Numerous laws and regulations govern the contracting process, including those related to procurement, contracting, and vendor relationships. This is one of the most delicate parts of every federal agency because a bad contract can and does result in legal action. Depending on the severity, impropriety can lead to severance and even prison. Getting contracts correct is a very big deal.
Government contracts are typically awarded through a competitive bidding process to guarantee that the government receives the best value for its taxpayer dollars. Notice, we said typically. Other types of contracts are not competitive, which we wrote about here.
The government contracting process is complex and time-consuming, requiring specialized training and experience. Remember, the CO is legally committing the federal government to a contract.
Small Business Opportunities
A few months back, we wrote the guide to the Small Business Administration, which you should take a look at. The federal government is a major supporter of small businesses, especially those in disadvantaged areas or demographics, minority and veteran-owned small businesses, and businesses in economically uncompetitive and rural areas.
- Small businesses can participate in government contracting by registering with the relevant federal agencies and submitting proposals for contracts. Read about these contracts here.
- The government has programs in place to support small businesses, including the Small Business Administration (SBA).
- Small businesses can also partner with larger companies to increase their chances of winning government contracts by working as subcontractors.
- Small businesses must demonstrate their ability to provide high-quality goods and services to succeed in government contracting. Also, there are funding opportunities for small businesses under the SBIR and STTR programs within the DoD.
Federal Contracting Regulation
Regulations are the frameworks that make sure contracting is conducted fairly and legally. These regulations outline the requirements and procedures for awarding contracts, including the competitive bidding process, and all agencies have their own internal regulation (i.e., Department of the Army, Department of Navy, and so on), and then down the Major Command level, and then at the installation level.
Contracting officers and purchasing agents must be familiar with and follow the regulations throughout the process. The regulations are subject to change and amendment, and contracting officers and purchasing agents must stay up-to-date on the latest developments. The Federal Acquisition Regulation (FAR) is the primary regulation governing federal contracting, but again, this is at the federal government level. There are a slew of regulations that are issued under the FARs, although a lot of them are copied and pasted from higher headquarters.
Either way, they must be followed.
Government Contract Management
The process is not over once the contract is approved, especially if it is a continuous contract. An example of this would be contracted grounds maintenance. Contracting officers are responsible for ensuring that contracts are managed effectively and that the government receives the best value for its taxpayer dollars.
This is a recurring theme. Fiduciary responsibility is a huge issue in the government, as is fairness in the procurement process. Both of these are the responsibility of the contracting officer and their chain of command. Federal contracts require diligence to execute lawfully, and the financial data is available to the public for scrutiny and review.
Price proposals should be accurate and negotiated to be fiscally responsible and within predefined parameters by the contracting office. This is not always completely feasible since some types of projects are more open-ended and hard to fully calculate beforehand. Obviously, market conditions play a part in these, and procuring the best-quality goods and services will cost more.
How Greenwood Aerospace Works with Both
Here at Greenwood Aerospace, we have been working hand in hand with contracting offices and purchasing agents for decades. We are your industry pros who understand the concerns of the buyers in your organization,
We are here to help you purchase what you need for your organization, from bottled water and hardware to complete engines, aircraft parts, and even ground support equipment. If you are ready to get the process started for your organization, you can email us or call us at (580) 762-2580. Or you can start an online quote right here!
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