Best value pips pips perfromance information procurement system
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PBSRG. GLOBAL. Best Value PIPS PIPS: Perfromance Information Procurement System. P erformance B ased S tudies R esearch G roup (PBSRG) www.pbsrg.com. PIPS: Perfromance Information Procurement System. PBSRG : Perfomance Based Studies Research Group Lead by

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Best Value PIPS PIPS: Perfromance Information Procurement System

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Best value pips pips perfromance information procurement system

PBSRG

GLOBAL

Best Value PIPSPIPS: Perfromance Information Procurement System

Performance Based Studies

Research Group (PBSRG)

www.pbsrg.com


Pips perfromance information procurement system

PIPS: Perfromance Information Procurement System

PBSRG : Perfomance Based Studies Research Group Lead by

Pof. Dean Kashiwagi, Director

  • Worldwide as a leader in Best-Value Procurement / Project Management /Organizational Efficiency

    • Conducting research since 1994 ($7M+, $600K/YR)

    • 146 Publications

    • 441 Presentations, 6,200 Attendees

    • 530 Procurements

    • $683M Construction services

    • $1.4B Non-construction services

    • 50 Different clients (public & private)

    • 98% performance

    • Decreased risk management functions by 90%

    • Increase vendor profit by 5%


Pbsrg recognitions association

PBSRG recognitions/ Association

July/Aug/Oct 08

2008/2009

2005 Corenet

Global Innovation of

the Year Award

Food Services

Sports Marketing

IT/Network outsourcing

Furniture

Construction

Services

2006/2008

3


Best value concepts being implemented in botswana

Best Value concepts being implemented in Botswana

  • University of Botswana

  • Botswana Development Corporation

  • Bank of Botswana

  • US Embassy

  • DBES


Industry structure

Industry Structure

High

III. Negotiated-Bid

II. Value Based

Owner selects vendor

Negotiates with vendor

Vendor performs

Best Value (Performance and price measurements)

Quality control

Measurements dictate outcome

Performance

I. Price Based

IV. Unstable Market

Specifications, standards and qualification based

Management & Inspection

PM makes decisions

Competition

Low

High


Problem with priced based systems

High

High

Performance

Performance

Low

Low

Problem with Priced Based Systems

Owners

“The lowest possible quality that I want”

Contractors

“The highest possible value that you will get”

Maximum

Minimum


Impact of minimum standards

High

Low

Contractor 1

Contractor 2

Risk

Performance

Contractor 3

Contractor 4

Low

High

Impact of Minimum Standards

High

Low

Risk

Performance

Contractor 1

Contractor 2

Contractor 3

Contractor 4

Low

High


Industry performance and capability

Industry performance and capability

Vendor X

Customers

Highly

Trained

Outsourcing

Owner

Partnering

Owner

Medium

Trained

Minimal

Experience

Price

Based

(decision making and

management)


There is something wrong with the delivery of services

There is something wrong with the delivery of services…..

No one knows how bad the problem really is…..

Entire system is broken….

Requires more management….

Performance/value is decreasing….

Relationships are more important than results….


As management control and direction become more important

Skill 1

Skill 2

Skill 3

Skill 4

As management, control, and direction become more important…..

Management, Direction, and Control

….it becomes less important to be skilled, accountable, and able to minimize risk


Best value pips pips perfromance information procurement system

“Manager’s Code” The movement of risk.....

Is It Working?

NO

YES

Don’t Mess With It!

Did You Mess

With It?

YES

YOU IDIOT!

NO

Anyone Else

Knows?

Will it Blow Up

In Your Hands?

YES

You’re SCREWED!

YES

Can You Blame

Someone Else?

NO

NO

Look The Other Way

NO

Hide It

Yes

NO PROBLEM!


Event

Event

Initial conditions

Final conditions

Laws

Laws

Time


Traditional management

Traditional Management

Initial conditions

Final conditions

D

M&C

Laws

Laws

Time

D

Risk is deviation from

expected measurements


Best value system assess monitor evaluate

Best Value System:Assess, monitor, evaluate

Initial conditions

Final conditions

M

M

Laws

Laws

M

Time

M

Risk is deviation from

expected measurements


Best value system

Best Value System

PHASE 2:

PRE-PLANNING

QUALITY CONTROL

PHASE 3:

MANAGEMENT BY RISK MINIMIZATION

PHASE 1:

SELECTION

Best Value

moves on

Award


Information environment

Information Environment

  • Minimize documentation/information flow

  • Minimize decision making

  • Look for dominant information

  • Minimize work for everyone

  • Transfer risk to someone who can minimize risk


Best value process

Filter 6

Weekly Report &

Post-Rating

Filter 1

Past

Performance

Information

Filter 4

Prioritize

(Identify

Best Value)

Filter 5

Pre-Award

Phase

(Pre-Plan)

Filter 2

Proposal & Risk / Value Plan

Filter 3

Interview

High

Quality of Vendors

Award

Low

Time

Best Value Process


Identification of potential best value within budget

Proceed with

Alternative Bidder

or Re-Run

No

No

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Proceed to

Pre Award /

Award

Identification of Potential Best-Value(Within budget)

Best-Value is within 5% of next highest ranked firm

Best-Value can be justified based on other factors

Best-Value is also the lowest price

Best Value

Prioritization


Detailed selection process over budget

Detailed Selection Process(Over budget)

Filter 6

Weekly Report &

Post-Rating

Filter 1

Past

Performance

Information

Filter 4

Prioritize

(Identify

Best Value)

Filter 5

Pre-Award

Phase

(Pre-Plan)

Filter 2

Proposal & Risk / Value Plan

Filter 3

Interview

High

Detailed

Cost

Breakouts

Quality of Vendors

Award

Open price proposals

Low

Time


Identification of potential best value over budget

Proceed with

next highest priced

value

Yes

No

No

Yes

Yes

Yes

Yes

Yes

Proceed to

Pre Award /

Award

Identification of Potential Best-Value(over budget)

Dominant information proves that the contractor incurs serious risk in doing the project

Best-Value is also the lowest price

Lowest

Price


Best value price based system

Best Value Price Based System

PHASE 3:

MANAGEMENT BY RISK MINIMIZATION

PHASE 2:

PRE-CONSTRUCTION

QUALITY CONTROL

PHASE 1:

LOW

PRICE

SELECTION

Award

NTP


Information environment filters are not deployed in lb

Information Environment Filters are not deployed in LB

  • Minimize documentation/information flow

  • Minimize decision making

  • Look for dominant information

  • Minimize work for everyone

  • Transfer risk to someone who can minimize risk


Remember pips has multiple filters

Remember – PIPS Has Multiple Filters

Filter 5

Pre-Award

Phase

(technical

concerns)

Filter 6

Weekly Report &

Post-Rating

Filter 1

Past

Performance

Information

Filter 4

Identify

Potential

Best Value

Filter 2

Current Project Information

Filter 3

Interview

High

Quality of Vendors

Award

Low

Time


Detailed lb selection process

Detailed LB Selection Process

Filter 6

Weekly Report &

Post-Rating

Filter 1

Past

Performance

Information

Filter 4

Clarification

Of Award

Filter 5

Pre-Construction

Phase

(Pre-Plan)

Filter 2

Proposal & Risk / Value Plan

Filter 3

Interview

High

NTP

Bid

Award

Addendum

Quality of Vendors

Low

Time


Self regulating loop six sigma dmaic generated

Actions

Minimize data flow

Minimize analysis

Minimize control

= Identify Value

V

R

= Minimize Risk

M

= Self Measurement

Requirements

Past Performance

Information

Efficient

Project implementation

Self Regulating Loop(Six Sigma DMAIC Generated)

R

Risk Assessment

Interview Key Personnel

R

Identify value (PPI, RA, Interview, Price$$$)

V

M

Preplanning, Quality Control Plan

Risk Management

R

50%

50%

M

M

Measure again

M

R


Management of risk before contract signing

Requirement based on measurement

Compete vendors based on value and quantification of risk

Compile all risks; pick the best visionary

Technical risk/risk minimization is added to the technical scope, and all risk that is not controllable goes into the risk management plan, and is tracked weekly

Management of Risk Before Contract Signing

M

M

M

M

M


Best value pips pips perfromance information procurement system

  • QUALITY CONTROL

  • Risk

  • Risk Minimization

  • Schedule

  • WEEKLY REPORT

  • Risk

  • Unforeseen Risks

  • QUALITY ASSURANCE

  • Checklist of Risks

  • Sign and Date

  • PERFORMANCE SUMMARY

  • Vendor Performance

  • Client Performance

  • Individual Performance

  • Project Performance

Unforeseen Risks


Leadership based structure

Me & Them

Us

Don’t Control

Don’t Control

Control

Control

Risks

Risks

Leadership Based Structure…


Weekly report

Weekly Report

  • Front Page

  • Project Particulars

  • Project name

  • Client PM

  • Procurement agent

  • Start

  • End

  • Date

  • Contract award

  • amount

  • PM

  • Risk Page

  • Date

  • Why risk was not

  • minimized

  • Solution

  • Cost and time

  • Status (weekly

  • update)

  • Rating of how

  • they responded

  • Risk rating (cost and

  • time and response

  • rating)

  • Contractor errors

  • Schedule / Status

  • Schedule

  • Change orders

  • Director’s Report

  • Contractors

  • PMs

  • Subcontractors


Selection criteria

Selection Criteria

The delivery of Training/ workshop services will require:

  • Past performance information on the critical elements.

  • Scope.

  • Schedule with major milestones.

  • Risk assessment value added (RAVA) plan.

  • Interview of key personnel.


Vendor selection criteria

Vendor Selection Criteria

The delivery of Training/ workshop services will require:

  • Past performance information on the critical elements.

  • Scope.( as understood by the vendor from RFP)

  • Schedule with major milestones.

  • Risk assessment value added (RAVA) plan.

  • Interview of key personnel.

    Evaluation criteria will be weighed according to the following categories (which are

    subject to change at any time by the Client).

    Criteria & Weight(%)

  • 1. Price 30%

  • 2 Overall (a-d) Performance 70%

    • 2a - Interview30%

    • 2b - Risk Assessment / Value Plan20%

    • 2c –Past Performance Information 15%

    • 2d – Schedule 5%


Cost and performance

Cost and Performance

  • Prioritization based on cost and performance, 30% and 70%

  • Performance Ratings include PPI, RAVA, Interview Score, and Cost

  • Financial check, and validate differences from the next highest bids which are over 20%.  So if the best value is 20% higher in cost, dominant information must be presented by the vendor.  


Dominant information

Dominant Information

  • Minimize decision making

  • Minimize need for inefficient, idle, chit-chat

  • Minimizes discussion time

  • Setup an information environment where there is accountability, performance, and efficiency


Impact of dominant information

Impact of dominant information

  • Predict the future outcome and minimize risk

  • Simplicity instead of complexity

  • Allows even “blind” people to see the clearness of reality

  • Helps everyone to be more focused


Impact of dominant information1

Impact of dominant information

  • Minimizes the need for micro-management

  • Assigns accountability and responsibility

  • Aligns resources in optimal pattern

  • Efficiency

  • Predictability

  • Minimization of risk (not on time, not on budget, and not meeting expectation)


Important dates

Important Dates

  • RFP Issued

  • Prebid MeetingDecember 10 2008

  • Prebid Discussion Questions

  • Proposal Due (PPI/RAVA/Price) December 17th 2008

  • Shortlist January 5th 2009

  • Interviews January 6th 2009

  • Identification of Potential Best Value January 6th 2009

  • Pre Award Kick Off Meeting January 7th 2009

  • Pre Award Meeting January 7th 2009

  • Contract Award January 7th 2009

  • Award / Notice To Proceed January 8th 2009

    All proposals/quotations package as per the format in this document should reach the American Embassy on or before December 17, 2008 by 4:30 PM, marked “Workshop Logistics Organizer”. Failure will lower your rating.


Past performance information i

Past Performance information I

  • The past performance rating would be made on:

  • 1.       On time.

  • 2.       On budget, no change orders.

  • 3.       Customer satisfaction.

  • 4.       Value of the workshops carried out/organized before .

  • 5.       Did they meet the client’s expectations.

  • 6.       Success of the consultant/vendor

  • 7.       Would the client recommend the Vendor to other clients.

  • Past performance will be rated in terms of 10 is dominantly better, 5 is the same, and 1 is not to use for all ratings.


Interview of key personnel

Interview of Key Personnel

  • Cost estimate review by the vendor’s project manager and Q&A.

  • Level of quality of the workshop materials .

  • Level of expertise of the facilitators

  • Ability to be accountable, take charge of the project, and minimize risk that they do not control, as well as minimize technical risk.

  • Schedule.

  • Vision.


Review handout

Review Handout


Comments questions

Comments / Questions

W W W . P B S R G . C O M


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