A Short Course in PBA and Proper PWS Formatting

A Short Course in Performance Based
Acquisition & The Proper use of PWS
Formatting for Beginners
By Robert Knauer, CPCM CPPO
The Acquisition Institute, Inc.
Copyright 2013
copyrighted material 2013 by TAI
Inc.

Introduction
At the end of this course you will be able to:
•Understand Basic concepts of Performance Based
Acquisition (PBA)
•Understand why formatting is so important for a
Performance Work Statement (PWS)
•How to properly format a PWS
•What the contents are in all seven sections of a PWS
and why you don’t want to leave anything out
•Finally -what a PWS can do for your agency
Inc.

Basic PBA Components include:Basic PBA Components include:
1.Performance Work Statement (PWS)
2.Statement of Objectives (SOO)
3.Quality Assurance Surveillance Plan (QASP),
4.Service Level Agreement (SLA)
5.Both 3 and 4 above
6.Use of correct Performance-Based Metrics,
7.Contractual incentives (positive and/or negative), and
8.The right pricing arrangement (contract type).
Inc.

Benefits of Performance Based Contracting
– Increased likelihood of meeting mission
– Focus on intended results-not process
– Better value and performance
– Less performance risk
– No more detailed specifications are required
– Contractor flexibility with solutions
– Better competition, not just more vendors but solutions!
– contractor buy-in and shared interests
– Fewer protests
– Surveillance is more meaningful and less frequent
– Many solutions from which to chose…
Inc.

Performance Work Statement (PWS)Performance Work Statement (PWS)
Federal Acquisition Regulations (37.605) say
agencies shall, to the maximum extent
practicable –
(1) Describe the work in terms of the required results rather
than either “how” the work is to be accomplished or the
number of hours to be provided;
(2) Enable assessment of work performance against
measurable performance standards;
(3) Rely on the use of measurable performance standards
and financial incentives in a competitive environment to
encourage competitors to develop and institute innovative and
cost-effective methods of performing the work.
Inc.

Should I use a PWS or SOO?
• Performance Work Statement (PWS)
–Complete Statement of Outputs with Performance Metrics
–Assumes Government has the ability to create the PWS
–Review the “Guide to Developing a PWS & QASP for
service contracts” by Robert Knauer
• Statement of Objectives (SOO)
–Emerging method that permits contractors to do for the
Government what it cannot for itself- “write a PWS”
–Topical in nature-should not be detailed like a PWS
–Contents: (1) Purpose; (2) Scope; (3) Period and place of
performance; (4) Background; (5) Performance objectives;
and (6) Performance rating constraints
•Refer to FAR 37.602copyrighted material 2013 by TAI
Inc.

WHAT DOES A PWS REALLY DO?
•Maximizes Accountability on the KTR
•Better Defines the Risks for All Parties
•Provides Greater Flexibility
•Promotes Productivity and Innovation
•Facilitates Contract Administration
•Spells out performance outputs to be
measured for success rather than steps
Inc.

Why is Government issuing SOO’s?
–Lack of Government resources
–Reliance on contractors to develop PWS, QASP
and other products
–Government gets to select best value
–Government ends up with a better contract
Inc.

A Quality Assurance Surveillance PlansA Quality Assurance Surveillance Plans
(QASP) contain:(QASP) contain:
• A statement of the plan’s purpose;
• The names of the technical representative;
• The specific authority and responsibilities of the COR;
• Instructions on how to use the plan;
• A surveillance schedule;
• The surveillance methods that will be used;
• The performance requirements summary (PRS)
• Sampling guides for each task to be sampled; and
• Deduction and incentive formulas as appropriate.
Inc.

Every Service Contract should have one because:
• It is contractually binding on both parties
• It becomes part of the binding contract.
• It includes not just the Government’s Quality
Assurance expectations on deliverables, but the
contractor’s QC processes and expectations. It
helps to bring about greater performance through a
more collaborative process built on mutual respect
and understanding “corrective work actions” when
needed, and continued performance improvement
throughout the life of the contract.
• There is something in it for both sides!!
Service Level Agreement (SLA)Service Level Agreement (SLA)
Inc.

Work together to develop an appropriate Performance Work Statement
(PWS) or Statement of Objectives (SOO) and be creative
Jointly develop an appropriate Quality Assurance Surveillance Plan
(QASP) or Service Level Agreement (SLA)
Jointly develop appropriate performance-based measures, metrics,
key performance indicators, and incentives to apply
Make incentives challenging yet attainable by the vendor
Negotiate a fair and reasonable pricing arrangement to achieve high-
performance results
Identify any and all constraints
Develop a surveillance schedule for either the QASP or SLA
Review and agree on success determinants
Select only a few meaningful measures on which to judge success
Best Practices in Performance-Based Contracting
Inc.

Next we’ll discuss:Next we’ll discuss:
The Seven Steps to becoming performance basedThe Seven Steps to becoming performance based
using a standardized PWS formatusing a standardized PWS format
Inc.

“The Seven Steps”
1. Establish an integrated solutions team (IST)
2. Describe the problem that needs solving
3. Examine private and public-sector solutions
4. Develop a Performance Work Statement (PWS)
or a Statement of Objectives (SOO)
5. Decide how to measure & manage performance
6. Select the right contractor
7. Managing performance
Inc.

1. Establish an integrated solutions team (IST)
Performance-based acquisition is a
collective responsibility that involves
experts from budget, technical,
contracting, logistics, legal, the program
office, etc….
Inc.

2. Describe the problem needing solving
The Team must determine...
What is the problem the agency needs to
solve?
What do I need?
When do I need it?
Where do I need it?
What minimum Capability?
What minimum quality?
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You must Baseline Current Performance
Determining the current level of performance or
operations against which future performance will
be measured.
Creates a valid measure of comparison
2. Describe the problem needing solving
Inc.

3. Acquisition Planning
Market research is the process of collecting
information on the commercial marketplace; its
capabilities, technologies, and competitive forces.
Market research is essential to the government's
ability to buy best-value products and services that
solve mission-critical problems.
Market research is easy to do with links to
catalogs, vendor websites, GOOGLE, etc…
Inc.

• Update Past Market Research by others
• Review Similar Market Research Reports on File
• Issue Surveys and Questionnaires (Sources Sought & RFI)
• Conduct Site Visits
• Perform Internet Searches (using Google or Bing)
• Host Industry Days
• Contact Small Business/Source Development Office
• Review Trade Journals
• Contact Professional Societies
• Attend Trade Shows
• Cold Calling (Yellow Pages)
• Contact Professional Contacts
3. Acquisition Planning
Inc.

4. Develop a PWS or SOO
There are two ways to develop a specification
for a performance-based acquisition. You can
either use a-
• Performance Work Statement (PWS) or a…
• Statement of Objective (SOO).
Inc.

PWS is a document that states the technical,
functional and performance characteristics of the
work to be performed or delivered, it…
• Identifies essential functions to be performed (outputs)
• Performance standards (quality standards)
• Key performance indicators (KPI)
• Identifies the location of the work, the units of work, the
quantity of work units, and the quality and timeliness of
the work units.
Inc.

• Developing the PWS begins with collecting and
gathering lots of data that defines the present
operation.
• Sources of data can include information
management systems (MIS), cost accounting data,
current and projected workload estimates, files, log
books, customer records and internal or external
interviews with managers and subject matter
experts (SME)
• The process is more difficult that most realize,
but it doesn’t have to be when working with a team.
• Review the Guidebook by Robert Knauer entitled, “A guide to PWS
and QASP Development” available at www.AcquisitionInstitute.com
Inc.

You must create at “Work Breakdown
Structure” for a PWS is often found in
the agency, department, branch or
division’s mission statement
Inc.

Creating and using a WBS will
help you create a PWS that
should focus on defining desired
results (Outputs) and acceptable
levels (AQLs) for all the major top-
level tasks listed in your contract
(CWBS)
Inc.

Inc.

RFP’s are used to solicit contractor
proposals that will tell how they propose to
accomplish work (the outputs) requested
in the PWS that will meet your agency
minimum standards…
How to propose is up to contractors
Inc.

Now, the FAR only says to:
■ Describe requirements in terms of results or
outputs, rather than processes used.
■ Use measurable performance standards and
quality assurance surveillance plans to
measure performance results.
■ Provide for reductions of fees or price for failed
performance, and...
■ Include performance incentives as appropriate,
therefore much can be overcome by using an
SLA.
Inc.

• A Solicitation/Contract Form
• B. Supplies/Services and
Prices/Costs
• C. SOW/Specifications
• D. Packaging and Marking
• E. Inspection and Acceptance
• F. Deliverables or
Performance
• G. Contract Administration
Data
• H. Special Contract
Requirements
• I. Contract Clauses
• J. List of Attachments
• K. Representations and
certifications
• L. Instructions to
Offerors/Bidders
• M. Evaluation Factors For
Award
Uniform Contract Format covers
what’s in the RFP
Inc.

Best Practice has resulted in adopting the following
outline for Section C with the following seven
sections covered in detail for you to know what
goes into a really good PWS document:
Section C-1 Background
Section C-2 Acronyms and Definitions
Section C-3 Government Furnished Property
Section C-4 Contractor Furnished Property
Section C-5 Task Descriptions (Outputs)
Section C-6 Technical Publications
Section C-7 Technical Exhibits
Inc.

Attachments (Technical Exhibits) should include
these documents and many more:
• Performance Requirement Summary (PRS)
• Statement of Objectives (SOO)
• Historical and Projected Workload
• Required Mandatory Reports, and possibly…
• Quality Assurance Surveillance Plan (QASP)
• Proposed Service Level Agreement (SLA)
• Other required and mandatory reports, or data
UNLESS… you are asking the contractor to propose on the basis of
your Statement of Objectives (SOO).
Inc.

A well written PWS, enables contractors to:
1. Determine what needs to be done (best way)
2. Determine the skill sets (capabilities), level of
expertise, and hours required
3. Develop realistic and reasonable equipment
and facility estimates for their price proposal
4. Compile a Technical & Cost proposal
Inc.

Please don’t restrict competition through tight specs,
and …
Please don’t prescribe manpower unless necessary.
You must jettison old concepts and approaches and
let contractor’s be creative on their own…that’s
what PBA is all about
Inc.

Job Analysis- 1st
Step
Creating a PWS-it’s a lot of work!
• Organizational Analysis
• Tree Diagram or Work Breakdown Structure draft
• Activity Analysis (Input-Work-Output)
• Performance Value Analysis (PVA)
• Workload Analysis (few realize how big this is!)
• Resource (property) Analysis
• Services Analysis
• Property Analysis
• Reports Analysis
• Forms Analysis
• Governing Directives Analysis
Inc.

This is the Flow for Developing a PWS
Requirement
JOB analysis
Activity Analysis
Input-Work-Outputs
Resource Analysis
PV Analysis
Disincentives/Incentive
P R S
P W S
Inc.

PWS Work & Quality Assurance
QASP is one-sided and Government only- not binding
= SLA
Inc.

The Work Breakdown Analysis
(some call it a Tree Diagram)
In a PWS, one performance based task
statement will be written for each main
task and any sub-tasks in the Work
Breakdown Structure (WBS) describing
the desired outputs to be achieved in your
PWS.
Inc.

5. You must decide how to measure and manage
contract performance
• QASP describes the procedures to be used by Government to
ensure that the service provider is meeting the minimum
requirements
• QASP includes the task requirement, performance indicator,
standard, acceptable quality level and method of inspection the
Government will use to verify acceptability.
• QASP is nothing more than a guide for surveillance of each task
by the COR. If you have a PWS you must have a QASP per the
FAR, but using it alone is really not enough.
• Using a SLA with the QASP is a better process.
Inc.

• A Quality Assurance Surveillance Plan is a
Government’s Contract Administration Plan (CAP) or
document used to describe what-when-where-and how
for the COR to inspect.
• The QASP only outlines what methods the COR should
follow in determining if the contractor meets the contract
specifications.
• A QASP can also be contractor developed, if requested.
• Service Level Agreement is a more performance based
solution, and can also be requested in the RFP.
Inc.

• A Service Level Agreement (SLA) is a negotiated
document that is proposed, negotiated, discussed and
accepted as part of the binding contract that covers both
QA/QC processes for both parties.
• A SLA document outlines what the government
expects; what the service provider must provide at
minimum to be acceptable and what incentives and
disincentives are built in.
• A SLA is a living document that promotes an ongoing
and collaborative dialogue between government and
industry, something a QASP cannot do.
• A SLA details what corrective actions the contractor and
Government are obligated to do, provide, and when
incentives, or givebacks will occur in the event of failure
or substandard performance.
Inc.

6. Select the Right Contractor
Your ability to select the right contractor comes
from the evaluation of their technical proposals,
and the source selection processes including Low
Priced Technically Acceptable (LPTA), Best Value
(BV) and Price Technical Trade Off (PTTO) or Cost
Technical Trade Off (CTTO)
Technical proposal are to be written in accordance
with the instructions stated in Section L of the
RFP, and evaluated per Section M criteria.
Inc.

• If the PWS includes a specific task, and
the contractor is not asked to actually
discuss their experiences in performing
that task or the process they’d use per
Section L then there is no way to evaluate
the contractor.
• You may end up with a
• Agency’s must make sure they think
through what they want demonstrated or
discussed in proposals.
Inc.

• Ensure that the individuals selected to
serve on the Source Selection Evaluation
Team have direct hands-on experience
with the kind of work being evaluated, for
failure can have grave consequences.
Inc.

Now you are going to
learn about the actual:
Performance Work Statement
Formatting
Inc.

The PWS & SOO
• Nobody has ever said that there is a best
format for Section C, but what we should be
is consistent within the agency.
• Does Your Agency Have its own format?
Fine, use it, but make sure it covers what is
required.
• Variations are OK, as long as it makes sense
• Government needs to be consistent in PWS
development, so the next section is our
Section C (suggestion to follow)
Inc.

The PWS & SOO
PWS Content & Format
• C1 – General (intro and scope)
• C2 - Definitions & Acronyms
• C3 - GFP and Services
• C4 - Contractor Furnished Items
• C5 - Specific Tasks (Performance Outputs)
• C6 - Applicable Directives
• C7 - Technical Exhibits
Inc.

The PWS & SOO
• C1 General typically includes things like:
– Scope (keep it related to the tasks)
– Background (keep it simple)
– Personnel (key and regular)
– Dress and Conduct, etc.
– ASK: Can this go in another part of the RFP?
If so, the Contracting Officer should put it there
and not in the PWS. We want to keep duplication
down to a minimum.
Inc.

The PWS & SOO
• C2 DEFINITIONS:
– STANDARD
• Contractual Definitions
• Program Office Definitions
– TECHNICAL
• Those Not Generally Understood
• Acronyms
• PMO (program management office)
Inc.

The PWS & SOO
• C3 GOVERNMENT FURNISHED
PROPERTY AND SERVICES:
– PROPERTY/FACILITIES
• EQUIPMENT (major and minor property)
• SUPPLIES/MATERIALS/REPAIR PARTS
– SERVICES
• Utilities (phone, water, etc.)
• Maintenance (facilities, equipment)
Inc.

The PWS & SOO
• C4 CONTRACTOR FURNISHED ITEMS:
– Say…“The Contractor Shall furnish all items
and services not listed as Government
furnished in Section C3.”
– Do specify Minimum Quality & Minimum Qty
Standards, if needed
– Government Reimbursement for Special Items
(General Purpose or Special Purpose Test
Equipment) when approved.
Inc.

The PWS & SOO
• C5 SPECIFIC TASKS:
– The Outputs = what you want accomplished
– Identify inputs (resources) needed.
– Identify required Government interactions
need for work to take place properly
Inc.

The PWS & SOO
• C5 is for SPECIFIC TASKS:
– USE “HOW TO” ONLY FOR ESSENTIAL:
• Safety and Health Issues
• Where only one process can possibly work
• For Interactions outside the SCOPE of work
– SPECIFIC PWS TASKS:
• Can Reference Directives or other documents
• It is Better if PWS Stands alone without too many
references.
Inc.

The PWS & SOO
Performance Requirements Summary
lists the PWS tasks = that = QASP
surveillance requirements listed
–Ties Inspection & Acceptance to
performance outputs, Acceptable Quality
Levels (AQL) using Key Performance
Indicators.
Inc.

The PWS & SOO
• C5 SPECIFIC TASKS
– Never forget secondary requirements
• Equipment Maintenance
– When repairs and maintenance must occur
• Emergency or Contingency Requirements
– Always consider timing
– Sequence of Events required, Phase 1, then 2
– Simultaneous ongoing work that conflicts with
other work
Inc.

The PWS & SOO
• C5 SPECIFIC TASK INFORMATON
Should talk to:
• Terms-both parties will operate under
• Conditions- both parties will adhere to
• Variances- permitted to one or both parties
• Historical work patterns
• Always reference in Section C
• This also applies to the SLA, if used
Inc.

The PWS & SOO
• C5 SPECIFIC TASKS-
Always Reference Supporting Documents in C-
7
(Technical Exhibits) go in Section J of the SIR
• Illustrations
• Drawings
• Diagrams
• Schematics
• Layouts
Inc.

The PWS & SOO
• C5 SPECIFIC TASKS- Locations
–Specify the work locations, such as:
• The City
• The buildings
• The rooms
• The Places of Performance
• Be specific!
Inc.

The PWS & SOO
• C5 SPECIFIC TASKS
– For Cost Reimbursement Work-
• List Task Categories of Work
• List Labor Categories
• Give Examples
• Discuss Integration of Tasks, Skills, Equipment, etc.
• Discuss Seasonal Variations
• Make sure you have a surveillance plan (Known as a
Contract Administration Plan (CAP))
Inc.

The PWS & SOO
• C6 GOVERNMENT DIRECTIVES & FORMS
– List applicable Directives
• Regulations, publications, instructions, orders,
notices, SOPs, etc.
– List required forms
• Host on a website (PDF fillable, if possible)
– Be specific (mandatory or optional)
– Specify who maintains the directives
Inc.

The PWS & SOO
• C7 TECHNICAL EXHIBITS or INDEX
– TE1–Performance Requirement Summary
– TE2-Estimated Workload
– TE3-Required Reports (CDRL)
– TE4-Maps & Layout of work area
– Etc…
•
Inc.

The PWS & SOO
Inc.

In Summary
You must have:
• A good and consistent format for any PWS
• Thorough documentation and exhibits
• Know what your performance outputs are
• Be able to measure your outputs
• Know the outputs are correct, and
• Have a solid QASP or SLA to work with
Inc.

The following Draft PWS was one that I had
developed back when I was at DOL. It contains
all Seven Sections of the C1 through C7 format
I just covered in this short course. This is a
very fine example of a PWS document that
contains all the required sections for Section
“C” (C-1, C-2, C-3, C-4, C-5, C-6 and C-7)
Make sure when you draft a PWS that it also
contains these same sections and you’ll be
on your way to a very good PWS.
Robert Knauer CPCM CPPO
Inc.

A Short Course in PBA and Proper PWS Formatting

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