Performance-Based Contracting Considerations
This document outlines essential considerations for performance-based contracting in the context of COTS software implementation programs. It emphasizes the importance of linking contractor incentives to performance standards rather than mere clauses. Effective standards should align with program risks and operational needs. Critical factors include timeliness, efficiency, cost savings, and quality of deliverables. By employing balanced scorecards and project-based metrics, organizations can better manage contractor performance and achieve desired outcomes while fostering accountability and maximizing project success.
Performance-Based Contracting Considerations
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Presentation Transcript
Performance-Based Contracting Considerations Sample Logistics and Project Metrics for consideration in a Systems Integration / COTS Software Implementation Program EITK0604
Contractor Incentives – Basic Rules • Outcome must be tied to performance standards • Standards should be used instead of clauses • Contract line items are based on performance standards • Standards describe required service or outcome and payment associated with performance outcome
Contractor Incentives – Standards Development • Determine types of standards appropriate for the risk and reward inherent in program mission and operational requirements • For programs with schedule as critical factor, performance standards tied to timeliness of delivery • For programs that seek efficiency outcomes, • Tie payment to overall cost savings compared to old system. E.g.. Dept of Ed used “share-in-savings” or • Tie payment to improved amount of sales/revenue generated • For programs that seek increased effectiveness outcomes, tie standards to quality of deliverables or quality of service
Contractor Incentives - Balanced Score Card Official Logistics Scorecard
Contractor Incentives - Balanced Score Card Official Logistics Scorecard
Contractor Incentives – Project Based Metrics Project Based
Contractor Incentives – Project Based Metrics Project Based
Contractor Incentives – Project Based Metrics Project Based
Contractor Incentives – Project Based Metrics Project Based
