Entrepreneurial Company, the U.S. Air Force contractor- Case Stud

This is a fictional case study developed for the class. It focuses on the Entrepreneurial Company by pinpointing the objectives of a procurement, scope, key stakeholders, procurement strategy, and the context which may include legislations, external elements, and standards, policy relevant to objectives, timeframe, and lessons learned.

Entrepreneurial Company is a third-party logistics provider (3PL) supplying parts to the United States Air Force. On an annual basis, Entrepreneurial Company procures over $5 million in spare parts for various air frames such as fighters and cargo planes.

The objectives of each procurement are to acquire and deliver required parts to the Air Force within 30 days of notification. Key stakeholders are the Entrepreneurial Company Procurement Office and Air Force Supply Chain Management personnel. The Air Force is limited, by contract, to a maximum of $5 million of parts being provided by any individual 3PLs on an annual basis.

The procurement strategy is to continuously order, replenish, and deliver the spare parts for air frames throughout the fiscal year (1 October - 30 September) to keep the prices low for their parts. Unfortunately, with the pandemic affecting suppliers and causing delays in the global supply chain, the parts reordering, replenishment, and delivery to the Air Force has been disrupted. No one saw this pandemic coming and virtually every legal and policy decision made by the U.S. Government negatively impacted the domestic supply chains.

To exacerbate these supply chain issues, the acquisition "freeze" placed on the parts ordering will be lifted for the Air Force in July, and there will be a surplus of funds available for Enterprise Company to purchase as many required parts as possible. Unfortunately, the end of the fiscal year is fast approaching (30 September) and the $8 million the Air Force wants to buy in parts must be spent by 30 September. The Entrepreneurial Procurement Office knows they will exceed their contract "ceiling" because they have already procured and delivered $3 million in parts to the Air Force so far this year.

This is a hypothetical case study, but unfortunately, similar circumstances often take place each year in the Federal Government.

Questions:

1. The contract ceiling will have to be raised above the current $5 million for Entrepreneurial in order for the Air Force to use its $8 million in surplus of funds by 30 September; however, revenue above $5 million will cause Enterprise Company to lose its contractor status as a small business and the ability to compete for contracts under the small business category going forward. What do you believe are the best procurement practices for Entrepreneurial to avoid this risk while also succeeding in its procurement strategy to serve the Air Force?