No. 7.000 Rev. 0
Make or Buy Policy
2.0
Effective Date 1/1/99
3.0
Scope
This policy addresses the appropriate use of "make or buy" decisions to maintain appropriate skills and expertise within the laboratory.
4.0
Applicability
This policy applies to all Fermilab employees.
5.0
Policy
In keeping with its research mission, Fermilab does not routinely engage in the type of operations (i.e., manufacturing) requiring "make-or-buy" decisions. It is the general policy of the Federal Government to rely upon the private sector for goods and services and to avoid competition with the private sector. It is likewise the general policy of Fermilab to procure needed products from the private sector at the most economical cost and not to fabricate an item or component in-house unless the item is not available (quality, quantity, delivery, and other essential factors considered) from a private source at equal or lower prices. Since circumstances may exist, however, where it is necessary and beneficial to utilize in-house facilities and labor, the Laboratory recognizes the need to maintain and support efficient in-house facilities and capabilities in program-critical areas.
When the requester of a product indicates that in-house sources (chargeback organizations) should be used and where the estimated value added would exceed $50,000, he or she shall prepare a justification which addresses the applicable factors from the following list. A description of the work to be performed and the justification shall then be submitted to the responsible Division/Section Head for concurrence. The Head of the Business Services Section will then review and approve this justification. When the estimated value exceeds $100,000, the Directorate will also review and approve the justification.
Factors to be Considered
The technical nature of the item, future maintenance and repair requirements, engineering, tooling, start-up costs, market conditions, and the availability of personnel and material.
The competence, abilities, experience, and operational capacities available from in-house and outside sources.
The effects on the employment levels, capacity, workload and capital investments of the in-house organization capable of providing the required product or service.
The maintenance of a well-trained work force to perform services not readily available from commercial sources; i.e., repair of radioactive components.
The environmental, safety, health, and/or legal ramifications associated with outside sources.
The impact of the product or service on the program schedule and/or criticality of operations.
The anticipated number and technical complexity of design changes inherent to the product.
General considerations such as the quantity, quality, delivery, and overall cost of the required item(s).