R 011753Z DEC 23 MID120000677991U
FM CNO WASHINGTON DC
INFO CNO WASHINGTON DC
MSGID/GENADMIN/CNO WASHINGTON DC/N8/DECEMBER//
SUBJ/UNITED STATES NAVY CONTRACT SERVICES GUIDANCE FOR FISCAL YEAR (FY)
NARR/REF A IS DEPARTMENT OF DEFENSE INSTRUCTION 5000.74.
REF B IS SECNAVINST 5000.2G ENCLOSURE (8).
POC/ANGELA TENNYSON/CIV/OPNAV/LOC: WASHINGTON DC/TEL: 240-925-4245/EMAIL:
POC/JOHN NORTH/CIV/USFF/LOC: NORFOLK, VA/TEL: 757-836-9508/EMAIL:
POC/KATHY ATOIGUE/CIV/UNIT: USPACFLT/LOC: PEARL HARBOR, HI/808-474-
POC/FRANCIS TISAK/CIV/DASN(P)/LOC: WASHINGTON DC/TEL: 703-614-9636/EMAIL:
GENTEXT/REMARKS/1. Purpose. This NAVADMIN updates Service Requirements
Review Board (SRRB) policy and provides SRRB guidance for the remainder of
Fiscal Year (FY) 2024 and looking ahead to FY 2025.
2. Background. The Department of the Navy (DON) had approximately $57
billion contractual services obligations in FY 2023 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. The Office of Secretary of Defense increased its interest in
acquisition of services in June 2023 by creating a cross-functional Services
Acquisition Executive Steering Committee (SAESC) at the senior leadership
level as well as a Services Acquisition Working Group (SAWG) to facilitate
communication and examine matters that come before the SAESC to include
disciplines related to Services Acquisition, Comptroller, and
Programming. In September 2023 the United States Government Accountability
Office singled out the DON among the military departments for its ability to
collectively prioritize service requirements, to aggregate SRRB data, to
identify broader efficiencies, and to free up funding for higher priorities
(GAO Report GAO-23-106123).
a. 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.
b. Requirement reviews shall include, but not be limited by, the
(1) Mission Need. Explanation of the mission need for the requirement
and the outcomes to be achieved from acquiring services.
(2) Strategic Alignment. How the requirement for services supports the
broader organizational mission.
(3) Issues and Risks. Both government and contractor issues and risks
impacting the successful execution of fulfilling the requirement.
(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."
(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.
(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
(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.
(8) Metrics/Tripwires. Performance management metrics and tripwires
shall be considered to the maximum extent practicable during the SRRB review
and approval process.
(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
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.
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.
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
d. Research and development (R&D) services (Product and Service Code
(PSC) Category "A").
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.
f. Construction services (PSC Category "Y") and Architecture and
Engineering - Construction (PSC Category "C1").
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.
h. Utilities services (PSC Category "S1").
i. Commercial subscription services including database and information
systems, periodicals, publications and educational course subscriptions.
j. As a point of clarification only, SRRBs are not required for
services requirements funded fifty percent or more by Foreign Military Sales.
Navy Marine Corps Intranet (NMCI) services or Global Installation Contract
4. SRRB Requirements
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
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.
c. The requiring activity is responsible for submitting service
requirements to the SRRB regardless of the source of funding.
d. Activities receiving funds from another command shall rely on the
originating command's SRRB validation; an additional SRRB review is not
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.
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.
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
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.
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.
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.
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.
g. 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 usn.mechanicsburg.navsuphqmech.mbx.doncmpo-
7. Expect additional or updated guidance for FY 2025 SRRBs.
8. Released by direction Neil W. T. Hogg, SES, Assistant DCNO for
Integration of Capabilities and Resources (N8B).//