When employed during the source selection process, due diligence is a fact-based analysis of the offeror’s technical, organizational, and strategic constraints and objectives that is used to gather relevant information to assist the selection authority (SA) in choosing the winning offeror. The analysis of the offeror’s financial condition, which includes: percent of profit derived by the type of contract and the contract terms and conditions (time and materials, fixed cost, life cycle management and upgrades, incentives), is a critical part of the acquisition decision process, as these are the primary drivers of corporate behavior and influence how the offerors respond to a Request For Proposal.  Other critical factors are included such as: press releases on contract awards and other programs in which they are a lead or subcontractor and management changes. These identify potential conflicts of interest and “lock in” as a supplier based on other programs, which have dependencies on each other.

Due diligence not only provides the military service with a framework for the evaluation of the offeror’s proposal in terms of the technical and management risks it provides an assessment of the offeror’s ability to achieve the program’s cost and schedule targets. In addition it provides the military service the ability to predefine a number of organizational and issue resolution processes which, if not defined prior to contract award, can significantly impact a program’s performance. Examples of these are: a defined set of the service’s Program Management’s intra- and inter organizational processes and  “chain of command” decision authorities for issue resolution; the offeror’s inter-organizational processes for issue resolution; scope of authority within each party’s organizational and reporting structure of both entities; the decision-making methods, processes, and organizational structure within each of the program teams and between the Program Managers of the military service and the offeror;  the metrics on which the program evaluation will be based, the critical decision points and the modification process whether that be mutually agreed upon within the terms and conditions of the contract or if and when a contract modification is required.

Due diligence provides a baseline of standardized quantitative and qualitative metrics, which insure traceability from program capabilities definition, to the instructions to the offerors, to the evaluation factors for award, to the contract incentive provisions and program control and the performance evaluation from pre milestone A to Milestone B System Development and Demonstration (SDD) of competitive prototypes through to Milestone C LRIP and the supporting framework for the Full Rate Production Decision Review. The service’s ability to hold the supplier accountable is significantly increased when Due diligence is implemented.

CommerceBasix provides due diligence services for its DoD clients. It assembles a team of independent, third party subject matter experts who are uniquely qualified to provide technical, management, financial, andeconomic analysis to the client. The team's analysis addresses all four of evaluation domains: technical merit, cost, management team, and pastperformance. The analytical work product complements the work performed by the Source Selection Evaluation Board (SSEB) during its evalution of offeror's proposals.