UNITED STATES NAVY CONTRACT SERVICES GUIDANCE FOR FISCAL YEAR (FY) 2023:

CLASSIFICATION: UNCLASSIFIED// 
ROUTINE 
R 261932Z APR 23 MID120000008160U 
FM CNO WASHINGTON DC 
TO NAVADMIN 
INFO CNO WASHINGTON DC 
BT 
UNCLAS 
 
NAVADMIN 096/23 
 
MSGID/GENADMIN/CNO WASHINGTON DC/N8/APRIL// 
 
SUBJ/UNITED STATES NAVY CONTRACT SERVICES GUIDANCE FOR FISCAL YEAR (FY) 
2023// 
 
REF/A/DOC/DOD/24JUN21// 
REF/B/DOC/DON/08APR22// 
REF/C/DOC/DON/30SEP22// 
 
NARR/REF A IS DEPARTMENT OF DEFENSE INSTRUCTION 5000.74.   
REF B IS SECNAVINST 5000.2G ENCLOSURE (8).   
REF C IS DEPARTMENT OF THE NAVY SENIOR SERVICES MANAGER POLICY MEMORANDUM.//  
 
POC/ANGELA TENNYSON/CIV/OPNAV/LOC: WASHINGTON DC/TEL: 240-925-4245/EMAIL: 
ANGELA.L.TENNYSON.CIV@US.NAVY.MIL// 
POC/JOHN NORTH/CIV/USFF/LOC: NORFOLK, VA/TEL: 757-836-9508/EMAIL: 
JOHN.W.NORTH.CIV@US.NAVY.MIL// 
POC/KATHY ATOIGUE/CIV/UNIT: USPACFLT/LOC: PEARL HARBOR, HI/808-474-6414/ 
EMAIL: KATHY.R.ATOIGUE.CIV@US.NAVY.MIL// 
 
GENTEXT/REMARKS/1.  Purpose.  This NAVADMIN updates Service Requirements 
Review Board (SRRB) policy and provides SRRB guidance for the remainder of 
Fiscal Year (FY) 2023 and looking ahead to FY 2024. 
 
2.  Background. 
 
2.a.  The Department of the Navy (DON) had approximately $49.7 billion 
contractual services obligations in FY 2022 which accounts for approximately 
23% of the Navy's Total Obligation Authority.  The acquisition of services is 
a Command responsibility.  DON commanders are responsible for the 
appropriate, efficient, and effective acquisition of services in their 
organization. 
 
2.b.  The SRRB process shall be used to review, validate, and approve 
services requirements to accurately inform the budget and acquisition 
processes.  In accordance with reference (a), contract service requirements 
shall be vetted through an SRRB process as early in the services acquisition 
process as practical, but before the development of an acquisition strategy 
and before a procurement request package is transferred over to a contracting 
officer for execution. 
 
2.c.  Requirement reviews shall include, but not be limited by, the following 
considerations: 
 
2.c.1.  Mission Need.  Explanation of the mission need for the requirement 
and the outcomes to be achieved from acquiring services. 
 
2.c.2.  Strategic Alignment.  How the requirement for services supports the 
broader organizational mission. 
 
2.c.3.  Issues and Risks.  Both government and contractor issues and risks 
impacting the successful execution of fulfilling the requirement. 
 
2.c.4.  Workforce Analysis.  An analysis of the decision to insource or 
outsource, including any past decisions and why the requirement cannot be 
fulfilled with military or civilian personnel.  The analysis shall take into 
consideration OPNAVINST 1000.16L, Change 3 or succeeding document, "Navy 
Total Force Manpower Policies and Procedures." 
 
2.c.5.  Relationship to Other Requirements.  How the requirement for services 
impacts other requirements of the DoD Component (positively or 
negatively).  For information technology (IT) services, ensure requirements 
are consistent with enterprise IT strategies. 
 
2.c.6.  Prioritization.  A determination as to whether the requirement for 
services is a lower-priority requirement that can be reduced or eliminated 
with savings transferred to higher-priority objectives or mission 
requirements. 
 
2.c.7.  Contract Functions.  A review and identification of contract and work 
functions that may be prohibited or require heightened management attention, 
including, but not limited to inherently governmental Services, personal 
services, closely associated with inherently governmental functions and 
critical functions. 
 
2.c.8.  Metrics/Tripwires.  Performance management metrics and tripwires 
shall be considered to the maximum extent practicable during the SRRB review 
and approval process. 
 
2.c.9.  Product and Service Code (PSC) and Object Class Code (OCC).  Correct 
PSCs and OCCs are required and reported at the Contract Line Item Number 
level.  PSCs and OCCs are essential for spend and budget analysis, and as 
such, all personnel shall ensure the accuracy of PSCs and OCCs in both 
contracting and accounting systems. 
 
3.  Services Defined.  Service contracts are defined in the Federal 
Acquisition Regulation (FAR) Subpart 37.101 as a "contract that directly 
engages the time and effort of a contractor whose primary purpose is to 
perform an identifiable task rather than to furnish an end item of 
supply."  All services requirements and service contracts with an estimated 
cumulative value of the command's threshold or at $1 million or above 
(including pre-priced contract options) require SRRBs with the following 
exceptions: 
 
3.a.  Services listed in Subpart 37.502 of the FAR and services obtained 
under contracts with a total value of less than the command's threshold or 
less than $1 million. 
 
3.b.  Services in direct support of a contingency, humanitarian, or 
peacekeeping operation as defined in FAR Subpart 2.101.  This exemption shall 
apply to the response and initial deployment phase, but shall terminate as 
soon as practical based on conditions on the ground and a determination by 
the decision authority. 
 
3.c.  Services that are required to respond to and recover from an emergency 
or disaster directly supporting an emergency declaration or a major disaster 
declaration by the President.  This exemption shall apply to the response and 
initial recovery phase, but shall terminate as soon as practical during the 
sustainment phase managing reconstruction and recovery efforts based on 
conditions on the ground and a determination by the decision authority. 
 
3.d.  Research and development (R&D) services (Product and Service Code (PSC) 
Category "A"). 
 
3.e.  Services from DoD Federally Funded Research and Development Centers 
(FFRDCs), which are acquired in accordance with the management structure 
described in FAR Subpart 35.017 and DoDI 5000.77 and from DoD University 
Affiliated Research Centers (UARCs), which are acquired in accordance with 
the management structure described in the DoD UARC Management Plan. 
 
3.f.  Construction services (PSC Category "Y") and Architecture and 
Engineering - Construction (PSC Category "C1"). 
 
3.g.  Services that are managed and reviewed as part of defense acquisition 
programs under other Adaptive Acquisition Framework pathways (see https 
:(slash)(slash)aaf.dau.edu for additional information on the 
pathways).  Reference (a) and SRRB requirements may apply to services in the 
operations and support phase of these programs at the discretion of the 
Milestone Decision Authority. 
 
3.h.  Utilities services (PSC Category "S1"). 
 
3.i.  Commercial subscription services including database and information 
systems, periodicals, publications and educational course subscriptions. 
 
3.j.  Foreign Military Sales 
 
4.  SRRB Requirements 
 
4.a.  The SRRB is a requirement validation process; SRRB approval does not 
constitute a promise to fund or a promise to award a contract.  Final 
decisions related to contract execution, such as contract type, small 
business participation, and the extent of competition are reserved for 
contracting officers. 
 
4.b.  All headquarters staff and subordinate commands are required to conduct 
SRRBs as a means of reviewing, validating, approving, and prioritizing all 
applicable funded and unfunded services requirements with an estimated total 
cumulative value at $1 million or above.  Commands may have a lower threshold 
than $1 million for SRRB review processes.  This includes both base contracts 
and resulting task orders.  However, execution of pre-priced options do not 
require additional SRRB approval. 
 
4.c.  The requiring activity is responsible for submitting service 
requirements to the SRRB regardless of the source of funding. 
 
4.d.  Activities receiving funds from another command shall rely on the 
originating command's SRRB validation; an additional SRRB review is not 
required. 
 
4.e.  SRRBs shall be cross-functional with representation from the requiring, 
contracting, and financial management communities as they are available, and 
chaired by a Flag Officer, General Officer, or Senior Executive Service 
Member (FO/GO/SES).  Contractual services requirements at or above $1 million 
(or the Command threshold, whichever is lower) shall be approved via a SRRB 
chaired by a FO/GO/SES, or, for activities that do not have a FO/GO/SES 
member assigned, the first FO, GO, or SES member in the requiring activity's 
chain of command.  Chairmanship of SRRBs for contractual services 
requirements below $10 million may be delegated in writing to the O-6 or GS-
15 level. 
 
5.  SRRB Internal Controls. 
 
5.a.  SRRB approvals shall be documented by the SRRB Chair.  Shall the SRRB 
Chair require meeting minutes, action items, or recommendations, these shall 
also be documented as directed by the SRRB Chair.  Such documents shall also 
be made available for review during Services Acquisition Reviews and Training 
(SART) visits conducted by staff from the Office of the Deputy Assistant 
Secretary of the Navy for Procurement (DASN(P)), which is responsible for DON 
oversight of SRRB processes. 
 
5.b.  All Command staff and subordinate commands shall identify, document, 
and implement appropriate internal control processes (usually a SRRB 
identification number)to ensure that funding documents for contract service 
requirements are not submitted to contracting officers without SRRB 
validation. 
 
5.c.  Command Contractual Services Managers (CSMs) facilitate and help 
oversee the processes for Services Acquisition including SRRBs.  CSMs act as 
an action officer on all matters related to contractual services within their 
organization.  At the direction of the SRRB Chair, CSMs help develop and 
facilitate SRRB policies and procedures, document SRRB results, and conduct 
oversight to ensure compliance. 
 
5.d.  SRRB results shall be submitted annually by 30 October to DASN(P) 
Senior Services Manager IAW DASN(P) format.  This calls for Echelon III and 
below to submit their results to Echelon II NLT 15 October to allow adequate 
time to meet the DASN(P) annual 30 October deadline. 
 
5.e.  IAW Command policy and no later than FY 2024, the SRRB Chair shall 
certify that each contractual services requirement validated through the SRRB 
process is in compliance with the standard guidelines found in the DoD 
Handbook of Contract Function Checklists for Services Acquisition (May 2018 
or successor document), that all appropriate statutory risk mitigation 
efforts have been made, and that the purchase request does not include 
requirements formerly performed by DoD civilian employees (without further 
workforce analysis IAW paragraph 2.c.4.). 
 
5.f.  It is understood that the SRRB Chair is approving and certifying to the 
contractual services requirement as the facts and analysis are known at the 
time of SRRB review. 
 
5.f.  Rather than certifying each individual requirement, SRRB Chairs may 
make a single certification for all SRRB contractual actions which have been 
reviewed and approved during a single SRRB meeting or event.  This may be 
done through various ways, such as a cover page to SRRB meeting notes, quad 
charts, or other SRRB approval documents. 
 
6.  Category Management.  Commands shall employ management actions that align 
with Category Management principles.  Category Management refers to the 
business practice of buying common goods and services as an enterprise to 
help the DON eliminate redundancies, increase efficiency, and deliver more 
value and savings from the government's acquisition programs.  It requires 
participation during all phases of the acquisition process, and includes 
collection, sharing and analysis of data within and across commands, 
employing cross-departmental teams, and identification and distribution of 
best practices and lessons learned.  The DON Category Management Program 
Office at NAVSUP, working under the direction of DASN(P), is available to 
assist with Command Category Management initiatives.  They can be contacted 
via email at DONCMPOSOLUTIONS@navy.mil. 
 
7.  Expect additional or updated guidance for FY 2024 SRRBs. 
 
8.  Released by direction Neil W. T. Hogg, SES, Assistant DCNO for 
Integration of Capabilities and Resources (N8B).// 
 
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