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Effective Contract Management Planning. For Performance-Based Contracting. It’s a Different Contracting World!. Performance-Based Acquisition fundamentally changed contract formation and administration Objectives structured into contracts and multiple incentive arrangements

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effective contract management planning

Effective ContractManagement Planning

For Performance-Based Contracting

it s a different contracting world
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
when does contract management start
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
the performance based contract
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
the performance based contract1
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
what are the contracting officers responsibilities in performance based contracting
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.
get results
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!
contract management at governement entities
Contract Management at Governement Entities
  • Contract Management
    • 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.
key contract management responsibilities and focus areas
Key Contract ManagementResponsibilities and Focus Areas
  • Contract Management Responsibilities
    • 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.
the contract management team
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
key tools of contract management
Key Tools of Contract Management
  • Quality Assurance Surveillance Plan
  • Contract Management Planning
  • Earned Value Management
ensuring the quality of performance
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
contract management planning
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
contract management planning1
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.)
contract management planning2
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
contract management planning3
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.
contract management planning4
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
assessing contractor performance
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
contract management planning5
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
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