Effective Performance Management and Use of Performance Metrics Refresher

1. Effective Performance Management and Use of Performance Metrics Refresher August2008 Exhibit 2

2. Successful Contract Administration Successful management of contract performance ensures the rights of the Government while remaining fair to the contractor. Having the right skills is crucial to balancing the rights of the Government with the rights of the contractor. Obtaining those skills is the first step in effectively managing contract performance. Practicing those skills makes you a better contract administrator.

3. Skills Required to Effectively Manage Performance • Obtaining feedback from the COR/COTR on contractor performance or deliverables • Verifying and documenting evidence of performance problems • Evaluating the legal considerations of a performance issue • Determining potential impacts of any problems on cost, delivery, and other requirements • Resolving problems informally and formally depending on your assessment of the situation • Assessing the reasons and benefits of invoking formal contract remedies like Stop Work Orders and cure/show cause notices • Investigating potential or actual delays • Thoroughly documenting the contract file with monitoring activities, evidence of problems, and actions taken to resolve problems

4. Performance Management Involves… • Monitoring contract performance through the use of performance metrics • Obtaining COR/COTR evaluations of actual performance against contract deliverables • Taking necessary actions based on the COR/COTR’s evaluation • Applying remedies to protect the rights of the Government

5. To Monitor Contract Performance… • Obtain input from the COR/COTR as he/she is intimately familiar with the project and the requirements. : • The contract’s performance metrics are used to measure the performance/deliverables • Performance metrics usually measure four areas: • Functionality/content: To what degree does the deliverable/solution satisfy the requirements? • Quality: What condition (excellent, good, poor) is the deliverable/solution? • Schedule: Was the deliverable/solution submitted within the agreed upon timeframe? • Cost: Was the deliverable/solution within the agreed upon cost? • If there is a performance problem, first try to resolve it informally. If that does not work, then use a formal contractual remedy. • .

6. Invoking Contract Remedies Entails…. • Determining if the contractor had control over any contract delays and taking action based on that determination • Determining which remedy applies to the situation: • Stop Work Order • Cure or show cause notices • Liquidated damages • Rights under warranty or guarantee clauses • Consideration for acceptance due to fraud, gross mistake, latent defects

7. Steps to Protect the Government’s Rights • Monitor contract performance with the assistance of the COR/COTR • Measure performance using the established performance metrics • Invoke appropriate contract remedies to fit the situation