Presentation on theme: "Effective Contract Management Planning"— Presentation transcript:
1 Effective Contract Management Planning For Performance-Based Contracting
2 It’s a Different Contracting World! Performance-Based Acquisition fundamentally changed contract formation and administrationObjectives structured into contracts and multiple incentive arrangementsContractors and Federal staff adjusting to a cultural change
3 When does Contract Management start? Old ViewStarted at contract awardEmbodied a post-award orientationNew ViewEffective contract administration starts early with contract management planningBegins during the acquisition planning phaseRecognizes the performance-based elements of the contractThe 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 mannerEnsure that Contract measures and expectations are measurable and correspond to work requirementsEnsure that Quality Assurance Surveillance Plans are tailored to contract objectivesIncorporate cost constraints or cost incentivesAcquisition GuidePerformance 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 PBCsRequirements are structured in a results or outcome oriented mannerPositive and/or negative incentives are includedQuality 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!ResultsIdentify incentives that support program and site prioritiesProject specificIntegrated efforts (intra-site or inter-site)Technology DevelopmentInfrastructure/Facilities MaintenanceContractor 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 stakeholdersIntegrated Team MembersGovernment Contract Management Focus AreasProject 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 contractingEnsuring 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, andEnforcing 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 stakeholdersPast problems can be traced to lack of an integrated effort in managing contract performanceManage the contract not the people or the process
11 Key Tools of Contract Management Quality Assurance Surveillance PlanContract Management PlanningEarned Value Management
12 Ensuring the Quality of Performance QASPDevelop early - during the early stages of the RFP (SOW)Tool to evaluate contractor’s performanceProvides a structured approach to performing quality inspections and surveillanceEstablishes frequency and types of inspectionsFocuses on results - quality and timelinessQASP linked with Performance Evaluation Management Plans (PEMPs)PEMPs establish the performance evaluation process and fee determination processPEMPs may be used to fulfill QASP requirement
13 Contract Management Planning Why Plan for Contract Management?Challenges by GAO, IG and internal DOE reviewsMore sophisticated contracting modelsPerformance-based contractingMore rigorous contract types, i.e. CPIFDOE Contract Administration StudyLittle interface between all parties managing the contractInfrastructure/culture not keeping pace with PBCsLack of “game plan” for managing contractsTo 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 ContractsContracts subject to Government RegulationDesirable for service contracts that are complex., high risk with a high $$ valueHow do we develop an effective corporate oversight strategy/CMP?Begin planning during the earliest stages of the RFP preparationReview 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 identifiedIdentify key contract vulnerabilities or performance risk areas that are inherent in the contractDevelop 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 areasFormally 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, andEnsure 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 managementConduct 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 implementationMeet with all concerned parties on a regular basis to address issuesTrack performance and assess progress against the QASPAddress performance risks or deficiencies earlyUpdate the CMP as necessary
18 Assessing Contractor Performance Earned Value ManagementContractor use EVM to control cost and schedule performance as well as report progress against the contractDOE uses EVM to:Monitor and verify progress on contract costs and schedule performanceMonitor and validate contractor accomplishments on specific fee and PBI incentivesEarly 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 metThe CO relies on subject matter experts for advice on the integrity of the systemThe CO is responsible for enforcing the terms of the contract and requesting corrective action as necessary