1. Effective Contract Management Planning
For Performance-Based Contracting

2. It’s a Different Contracting World!
Performance-Based Acquisition fundamentally changed contract formation and administration
Objectives structured into contracts and multiple incentive arrangements
Contractors and Federal staff adjusting to a cultural change

3. When does Contract Management start?
Old View
Started at contract award
Embodied a post-award orientation
New View
Effective contract administration starts early with contract management planning
Begins during the acquisition planning phase
Recognizes the performance-based elements of the contract
The Contract Management Plan is in place before or shortly after the time of award

4. The Performance-Based Contract
What are the elements of Performance-Based Contracting?
Government Protocols Require:
Establish requirements in a results oriented manner
Ensure that Contract measures and expectations are measurable and correspond to work requirements
Ensure that Quality Assurance Surveillance Plans are tailored to contract objectives
Incorporate cost constraints or cost incentives
Acquisition Guide
Performance Based Contracting Guides – provides guidance on structuring effective incentives

5. The Performance-Based Contract
What are the elements of Performance-Based Contracting? (cont.)
In 1997 Rules mandated that PBCs
Requirements are structured in a results or outcome oriented manner
Positive and/or negative incentives are included
Quality Assurance Surveillance Plans are required

6. Other Contracting Rules Require:
What are the Contracting Officers Responsibilities in Performance-Based Contracting?
Other Contracting Rules Require:
Ensure that performance-based contracting used to the maximum extent practicable.
Use contract types that best fits the work and likely to motivate contractors.
Use positive or negative performance incentives to the maximum extent practicable.
Quality assurance surveillance plan shall contain measurable inspection and acceptance criteria corresponding to the performance standards of the SOW.

7. Get Results!
Results
Identify incentives that support program and site priorities
Project specific
Integrated efforts (intra-site or inter-site)
Technology Development
Infrastructure/Facilities Maintenance
Contractor Motivation (fee, more work, Peer recognition, past performance assessments)
Incentivize Results! Review lessons learned!

8. Contract Management at Governement Entities
Government Agencies major site and facility contracts are usually long-term and involve a complex mix of sponsors and stakeholders
Integrated Team Members
Government Contract Management Focus Areas
Project Management, change control, baseline management, technology, performance, quality assurance, fee and incentive management, contractor human resources, etc.

9. Key Contract Management Responsibilities and Focus Areas
Ensuring performance of all necessary actions for effective contracting
Ensuring compliance with the terms of the contract,
Safeguarding the interests of the contractual relationships,
Requesting and considering advice of specialists in audit, law, engineering, and other fields, as appropriate,
Monitoring Performance, and
Enforcing the Government’s rights when necessary.

10. The Contract Management Team
Success Depends on an Integrated Team!
Contracting Officer (CO), Project Director, etc.
Effective administration of PBCs relies heavily on the integration efforts of groups of people representing many functional areas, customers, and stakeholders
Past problems can be traced to lack of an integrated effort in managing contract performance
Manage the contract not the people or the process

11. Key Tools of Contract Management
Quality Assurance Surveillance Plan
Contract Management Planning
Earned Value Management

12. Ensuring the Quality of Performance
QASP
Develop early - during the early stages of the RFP (SOW)
Tool to evaluate contractor’s performance
Provides a structured approach to performing quality inspections and surveillance
Establishes frequency and types of inspections
Focuses on results - quality and timeliness
QASP linked with Performance Evaluation Management Plans (PEMPs)
PEMPs establish the performance evaluation process and fee determination process
PEMPs may be used to fulfill QASP requirement

13. Contract Management Planning
Why Plan for Contract Management?
Challenges by GAO, IG and internal DOE reviews
More sophisticated contracting models
Performance-based contracting
More rigorous contract types, i.e. CPIF
DOE Contract Administration Study
Little interface between all parties managing the contract
Infrastructure/culture not keeping pace with PBCs
Lack of “game plan” for managing contracts
To develop a “corporate oversight strategy” for ensuring contract success

14. Contract Management Planning
When is a Contract Management Plan (CMP) Required?
For all M&O & Major Site and Facility Contracts
Contracts subject to Government Regulation
Desirable for service contracts that are complex., high risk with a high $$ value
How do we develop an effective corporate oversight strategy/CMP?
Begin planning during the earliest stages of the RFP preparation
Review the contract and identify key governmental responsibilities (equipment, receiverships, etc.)

15. Contract Management Planning
How do we develop an effective corporate oversight strategy/CMP? (cont.)
Get input from the contractor to ensure critical areas are identified
Identify key contract vulnerabilities or performance risk areas that are inherent in the contract
Develop a strategy for managing unique terms and conditions (award term, incentives, etc.)
Develop a proactive approach for managing the governmental responsibilities and for mitigating any identified risk areas
Formally identify the key contract management team, include their names, responsibilities, authorities and limitations

16. Contract Management Planning
How do we develop an effective corporate oversight strategy/CMP? (cont.)
Develop training and guidance to help the culture (infrastructure/people) evolve if site is managing a new contract type (CPIF),
Develop an approach for managing the incentive fee arrangements of the contract, and
Ensure that other critical focus areas are included - management of contractor litigation, partnering agreements, records management, and other site specific challenges.

17. Contract Management Planning
How can we use the CMP to ensure successful contract performance?
Coordinate and solicit input from all staff involved in contract management
Conduct a special session with the contractor on the goals and objectives of the CMP and name the individuals (CO, COR, TM, etc.) responsible for its implementation
Meet with all concerned parties on a regular basis to address issues
Track performance and assess progress against the QASP
Address performance risks or deficiencies early
Update the CMP as necessary

18. Assessing Contractor Performance
Earned Value Management
Contractor use EVM to control cost and schedule performance as well as report progress against the contract
DOE uses EVM to:
Monitor and verify progress on contract costs and schedule performance
Monitor and validate contractor accomplishments on specific fee and PBI incentives
Early warning system to identify deficient progress

19. Contract Management Planning
What is the CO - Contracting Officer’s role in EVM?
The CO is responsible for ensuring that EVM is a requirement in the RFP (when applicable)
After award, the CO is responsible for receiving the contract performance reports, approving changes to the system, and generally ensuring that the system requirements are being met
The CO relies on subject matter experts for advice on the integrity of the system
The CO is responsible for enforcing the terms of the contract and requesting corrective action as necessary

20. Thanks and Kindest Regards, AAPM