• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Performance Based Contracting -- "Performance-Based Service ...
 

Performance Based Contracting -- "Performance-Based Service ...

on

  • 1,543 views

 

Statistics

Views

Total Views
1,543
Views on SlideShare
1,543
Embed Views
0

Actions

Likes
0
Downloads
30
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • SEVERE DEDUCTIONS AND UNREASONABLE RISKS PLACED ON THE CONTRACTOR ARE COUNTER-PRODUCTIVE AND CAN DESTROY THE PARTNERING RELATIONSHIP. WE MUST REMEMBER TO PROVIDE A WORK SCHEDULES - THESE ARE NECESSARY FOR THE QAE TO KNOW WHERE , WHAT AND WHEN TO EVALUATE WORK.

Performance Based Contracting -- "Performance-Based Service ... Performance Based Contracting -- "Performance-Based Service ... Presentation Transcript

  • Performance-Based Service Contracting BearingPoint
    • Proposed Deliverables:
      • Performance Management Framework
      • Methodology and Approach
      • Guiding Principles
      • Check List
      • Templates
        • Sample Blueprints
        • Performance Management Plan
        • Incentive Plan
  • Best Practices – As an example - NASA
    • Use incentives to motivate contractor performance
      • Award term
      • Measurable, outcome-based award fee
    • Establish teaming arrangement with the contractor
      • Use partnering
      • Establish common and organization specific goals
    • Update Quality Control, Quality Assurance programs
    • Require contractor QC program (I.e., ISO 9000)
    • Re-evaluate existing government QA program
      • Use predictive technologies
      • Evaluate contractor processes vs. detailed inspections
      • Use outcome-based metrics to gauge contractor success
  • What’s Industry Doing?
    • DOD increasing reliance on PBCs; see policy and guidelines at (http://www.abm.rda.hq.navy.mil/navyaos/content/view/full/139)
    • Air Force utilizes PBC see market research web site at http://www.afcesa.af.mil/search/index.asp
    • Navy launching full scale effort to overhaul Facility Service Contracting
    • Private sector uses PBC, usually with preferred vendor in long term relationships
  • Monetary Incentives
    • Fixed-price contracts, by their nature, include positive monetary incentives. If it costs the contractor less to perform, his profit margin goes up. A negative incentive can also be included in case the desired results are not achieved (deduction should be equal to the value of the service lost).
    • Cost-plus-incentive-fee (CPIF) or fixed-price-incentive-fee (FPIF) contracts can be used when there is some latitude in achieving the desired results. The ability to succeed or fail is controlled by the Contractor; the Government’s ability to influence contractor performance is limited to specific areas.
      • CPIF with multiple incentives contracts include setting a target cost, along with minimum and maximum values for cost, fee, technical performance, and schedule. Funds available for fees are divided into pools so that there is no overlap.
  • Monetary Incentives (Continued)
    • Cost-plus-award-fee (CPAF) and fixed-price-award-fee (FPAF) contracts are used when a mechanism to motivate a contractor is desired, but performance cannot be measured objectively or where the Government’s performance objectives can only be stated in general terms. Both types require an award-fee plan as a part of the contract. Incremental adjustments to the criteria in work authorizations can be made.
    • Share-in-savings.
  • Non-Monetary Incentives
    • Revised schedule
    • Reduced oversight
    • Positive performance evaluation
    • Automatic extension of contract term or option exercise (FAR Part 17 still applies)
    • More frequent payments
    • Lengthened contract term (award term contracting) or purchase of extra items (award purchase)
    • Publish article(s) in agency newsletter or speak at agency seminars
    • Letters of appreciation to individual employees may translate to bonuses
    • Use trade space for licensing, access to agency officials, etc.
    • Use those FAR clauses that can be negotiated to your advantage
  • Development of practical, meaningful, and measurable metrics improves the PBC process for the Government and its Contractors.
    • Develop metrics definitions based on industry best practices with performance target ranges based on historical averages
    • Include business impact measures as well as operations measures
    • Quantifiable and verifiable metrics ensure the quality of the measurements
    • Don’t raise the bar higher then a level which we can perform
  • Minimum Suggested Government Requirements for a Public Sector Solicitation
    • Performance requirements that define the work in measurable, mission­related terms.
    • Performance standards (i.e., quality, quantity, timeliness) tied to the performance requirements.
    • Government quality assurance (QA) plan that describes how the contractor's performance will be measured against the performance standards.
    • If the acquisition is either critical to agency mission accomplishment or requires relatively large expenditures of funds, positive and negative incentives tied to the Government QA plan measurements.
  • Minimum Suggested Government Requirements for a Public Sector SOW
    • Proposed statement of work and the satisfaction of all objectives set forth in the Statement of Objectives
    • Performance measures and metrics and the correlation of the performance measures and metrics to the achievement of the Statement of Objectives
    • Incentives and/or disincentives and their correlation to the achievement of the Statement of Objectives
    • The methodology for tracking and reporting results from the system of measures and metrics
    • The approach to continuous performance improvement, and
    • The approach to minimizing the burden to the Government of administering the performance based system
  • Regulations
    • The Interagency Task Force on Performance-Based Service Acquisition modified the Federal Acquisition Regulation (FAR) to give agencies flexibility in applying PBSA. This is recommendation number one of six:
      • Recommendation: Modify the FAR Part 2 to include definitions for: 1) performance work statement, 2) quality assurance surveillance plan, 3) statement of objectives, and 4) statement of work to support changes to Part 37. Modify FAR Parts 11 and 37 to broaden the scope of PBSA and give agencies more flexibility in applying PBSA to contracts and orders of varying complexity .
  • Contractor Risk
    • Try not to take severe punishments-contrary to partnering
    • Put as much work as possible into Firm Fixed Price
    • Use our work schedule to plan QAE evaluation locations
    • Work can slip without QAE presence
    • Need dedicated QAE’s -full time
    • Ensure QAE’s are trained
    • Partnering helps the QA process
    • QAE issue resolution matrix is important
    • Electronic QA input does save QAE time
    • Insure Quality Management Plan addresses QC and QA
  • Government Risk
    • Need Government Insight not Oversight
    • Government needs to develop consistent, uniform service metrics
    • Government culture can hamper trust and true partnership with Contractors