1. Performance Based Studies Research Group
State of Oklahoma Risk Management Training
How To Minimize Your Risk As A Consultant

2. State of Oklahoma Strategic Plan
Compete based on value (proven performance and expertise)
Transfer risk and control to vendor
Minimize client decision making, directives, and control
Vendor writes majority of the contract
Vendor manages contract
Measurement, measurement, measurement

3. State Vendor Expectations
Proactive and Accountable
Vendor has control
Focus on risk in the seams
Risk – Plans to minimize risk – impact – customer satisfaction
Performance measurement – uses dominate information
Performance information/risk identification disengages the bureaucracy
Win-Win
Vendor’s success is just as important as State’s success
Goal alignment
“No contract” – “Vendor writes their own”
Contract is a guide
If we have to go to the contract then everyone has already lost
Should never have to go the contract

4. 2009 State of Oklahoma Consultant/CM Selection and Risk Management Process
Filter 1
Registration:
Past Perf. Info.
Filter 2
Scope
RAVA plan
Filter 3
Interviews
Filter 4
Best Value
Prioritization
Filter 5
Pre-planning
Phase:
WR and Scope
Filter 6
Weekly Report &
Post-Rating
High
Criteria:
Interview
RAVA
PPI
Qual.
Criteria:
RAVA
Tech.
PPI
Qual.
Shortlist
Award
Identify BV
Low
Time 4

5. Solicitation Response Requirements
Requirements for Consultants
Turn in DCS/CAP Form 254BV and 255
Past Performance Information (Found in 254BV)
RAVA Plan (M100BV)
Technical Scope (M100BV)
Statement from Firm to commence work immediately upon selection.
Requirements for Construction Managers
DCS/CAP Form A305CMBV
Past Performance Information (Found in A305CMBV)
RAVA plan (M200BV)
Technical Scope (M200BV)

6. Requirements on Competing Firms
More or less time invested on a project?
More or less detail?
Risk they control or do not control?
Dominant differential or technical qualifications?
Risk minimization done when?
More risky approach or conservative control?

7. Industry Structure Best Value is best predictable performance
High
III. Negotiated-Bid
II. Value Based
Owner selects vendor
Negotiates with vendor
Vendor performs
Best Value (Performance and price measurements)
Quality control
Best Value is best predictable performance
Performance
IV. Unstable Market
I. Price Based
Specifications, standards and qualification based
Management & Inspection
Award is based on subjective minimum which has to be enforced
Low
Competition
High

8. Problem with Priced Based Systems: proliferates decision making
Owners
“The lowest possible quality that I want”
Contractors
“The highest possible value that you will get”
High
Low
Performance
High
Low
Performance
Maximum
Minimum

9. Impact of Minimum Standards Blind vs Visionary
Contractor 1
Contractor 2
Contractor 3
Contractor 4
Performance
High
Low
Risk
High
Low
Risk
Performance
Contractor 1
Contractor 2
Contractor 3
Contractor 4
Low
High
Decision making: what is the minimum standard, and do all contractors meet the minimum standards

10. What is Dominant Information
It is simple
It is accurate
There is minimized information
It stands out
It minimizes everyone’s decision making
It is easy to get, print out, someone has it very handy
It predicts the future outcome
It makes it clear among many parties

11. Not Dominant

12. Dominant Information is Not Technical
“And that's what verbose and hyper technical writing does - it wastes our time… As the legal jargon spreads across investor communications like weeds in a garden, increasingly the investors just stop reading it”
- Christopher Cox (Former California Republican Congressman)

13. Dominant vs Non-Dominant
Roof material is high performing:
Tensile strength is 800 PSI
Elongation is 300%
Tear strength is 400 lbs
Xenon testing: 10,000 hrs
Roof material has been installed and is performing:
65 Customer Responses
Average Roof Age: 25 years
Percent Not Leaking: 99%
Customer Satisfaction: 9.8

14. Traditional PM vs. New PM Model
Risks
Control
Don’t Control
Me & Them Us
Risks
Control
Don’t Control

15. What is the difference? Do designers spend more time in reacting to bureaucracy or doing a good technical job? 2 1 2 3 4 1 3 4

16. Traditional Management
Initial conditions
Final conditions D
M&C
Laws
Laws
Time D
Risk is deviation from
expected measurements

17. When do we determine the expectation so we can measure performance?
Initial conditions
Final conditions M M
Laws
Laws
Time M M
Risk is deviation from
expected measurements

18. CMAR Best Practices 0% 30% 60% 100% Designer 1 3 5 Contractor 2 4
Design Intent
Baseline $
Designer
Final
Design 1 3 5
Contractor 2 4
Scope
Cost Est.
Re-Scope
w/Modifications
Bonding capacity

19. Past Performance Surveys/ Past Performance Sheet
Design Firm
Compiles Information
Design Firm compiles and sends surveys and past performance sheet back to State
/Fax Survey
Call To Verify
The final step is for your past clients to fax the survey back to the current client
Mail survey back to Design Firm
State of Oklahoma
Past
Client 19

20. Risk Assessment and Value Added Plan (RAVA)
The Risk Assessment and Value Added (RAVA) Plan consists of two pieces
The Risk Assessment
The Value Added
The Risk Assessment section is used to identify high performing vendors that can:
Identify and minimize risk before the service has started
Deliver plan to minimize risk during the life of the service.
The RA Plan should clearly address the following items:
List and prioritize major risk items (areas that may cause the service not to meet the expectations of the Government).
Each vendor should focus on risks it does not control and
Explain how the vendor will minimize the risk. 20

21. RAVA Plan Rated Blind The RAVA Plan must NOT exceed 2 pages.
The RAVA Plan must not have ANY NAMES (such as vendor or manufacturer names, personnel names, project names, product names, or company letterhead)
Do NOT include brochures, marketing information, or product names!
The RAVA Plans will be evaluated “blind” in order to minimize any bias. 21

22. Value Added Differentiation
Answer the questions: “What value do I bring that differentiates me from my competitors?”
The Value Added Differentiation section of the RAVA Plan is to allow a vendor to:
Show how it will add value (that its competitors cannot)
The impact of that value in simple, provable terms
How the value added will be measured – must have an impact on dollars, time, and/or satisfaction of the Government
Marketing material is worthless and will negatively impact scores
Value Added is where vendors provide “great ideas” 22

23. Scope Will be rated in relative fashion
Conservative plan on how the work will be done
If other options are available, they will be considered along with the risk
30,000 foot level description
Final design description
Milestone schedule

24. Consultants should separate the requirement from the risk
Propose the vision that they can do with minimial risk
Propose to immediately analyze any “potentially risky options” in the beginning of the design contract
Only pursue “risky options” if there is dominant information that justifies the “perceived risk”
Cost should be based on “vision” and “requirements”
Makes all other parties accountable and gives control of the design back to the design professional

25. How The Submittal Process Works
Average
Score
Proposal Form
(1 page)
Proposal Form &
Other Documentation
Submittal
Contracting
Officer
Proposal Form
(1 page)
RAVA and Tech. Prop.
(2 Pages Each)
Evaluation Members

26. Interviews
The following individual will be interviewed for Consultants
Project Manager
Lead Designer
The following individuals will be interviewed for CM’s
One other person performing work on the project
All interviews will be individual (20mins. Per individual)
No bait and switch

27. Differences in new system
Provide past performance information (PPI) from references
PPI on organization and critical components
Submittals (scope and RAVA plan) will be two pages each
One additional page for milestone schedule
Interview will be with the project manager
How do you know you can do it
How are you doing it
How are you taking control of the project and minimizing risk and decision making of client
How did you pick your engineering subvendors

28. 50% Modification 28 28

29. Final Rating
After the project is complete, the client will evaluate the project.
The Final Rating will be heavily impacted by:
Change orders
Project delays
Poor quality
Owner surprises
Complaints
Ability to submit accurate and timely weekly reports
In Best-Value Procurement, the vendors goal is to get a high rating in order to stay competitive.
Before we discuss the Pre Award Phase, it is important for the vendor to understand that this project will be evaluated upon completion.
The Final Rating will be heavily impacted by:
Change orders
Project delays
Poor Quality
Owner surprises
Complaints
This rating will impact the vendors past performance database by 50%, so it is important for the vendor to get a high rating to stay competitive. 29 29

30. For Information and Questions Please Contact: Bill Harrell at and cc: Jacob Kashiwagi at