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IMPLEMENTING PERFORMANCE-BASED ACQUISITION FOR SERVICES. Julia Wise, Office of Federal Procurement Policy Lyle Eesley, Defense Acquisition University Phil Salmeri, President of Salmeri Seminars Date: November 8, 2007 Time: 2:10 to 3:10.

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slide2

IMPLEMENTING PERFORMANCE-BASED ACQUISITION FOR SERVICES

Julia Wise, Office of Federal Procurement Policy

Lyle Eesley, Defense Acquisition University

Phil Salmeri, President of Salmeri Seminars

Date: November 8, 2007

Time: 2:10 to 3:10

ofpp s view on pba
Success Story: Agencies continue to increase their use of Performance-Based Acquisition (PBA) methods.

Target: FY 2001 - 10% FY 2006 – 40% +

Actual: FY 2001 – 26% FY 2006 – 45% +

OFPP is

Encouraging agencies to continue to appropriately use PBA methods.

Working with agencies to obtain good PBA samples to share – all samples should be submitted to www.acquisition.gov.sevensteps.

Enhance existing PBA Guidance, as necessary, to address problem areas.

Providing on-site PBA lunch-time learning sessions for agency acquisition professionals.

OFPP’s View on PBA
ofpp interagency pba working group tasks sara panel s recommendations
OFPP Interagency PBA Working Group Tasks – SARA Panel’s Recommendations

Develop an illustrative guide or decision tree to help agencies determine when to use PBA;

Develop a performance incentive matrix;

Develop a “Best Practices Guide on Performance Measures;”

Develop a checklist that reflects how well an acquisition works within the Seven Steps process; and

Review and evaluate PBA samples and examples to incorporate in the Seven Steps to PBA Guide.

Agency senior management should

Emphasize the use of PBA on eligible service acquisitions to obtain innovative solutions (FASA).

Align acquisition objectives with agency objectives to achieve results. (GPRA)

Ensure PBA and FAR Part 12 are used when certain conditions exist (SARA).

4

pba is
An acquisition strategy used to structure all aspects of an acquisition

around the purpose of the work to be performed as opposed to the

manner in which it will be performed.

The Government states: “The What”

The Contractor states: “The How”

PBA is used to obtain innovative solutions from industry to measure

acceptable performance, and monitor performance to ensure the

outcome is achieved.

PBA is …
pba should be
Used to the maximum extent practicable on eligible services except on:

A&E, Construction, Utility services, Services incidental to supplies.

Additional exclusions in the OFPP September 7, 2004 memo:

- R&D to include Basic and Applied Research, Advanced Technology Development, Demonstration and Validation, and Engineering and Manufacturing Development;

- Professional Medical Services (not facility-related); and

- Tuition, Registration, and Membership Fees.

Note: Only 50% of the overall contract dollar value has to be devoted to PBA.

PBA should be …
pba elements
(1) Performance Work Statement (PWS) or Statement of Objectives (SOO)

Measurable Performance Standards

Performance Incentives

- Negative or Positive

- Monetary or Non-monetary

37.604  Quality assurance surveillance plans - Requirements for quality

assurance and quality assurance surveillance plans are in Subpart 46.4. The

Government may either prepare the quality assurance surveillance plan or require

the offerors to submit a proposed quality assurance surveillance plan for the

Government’s consideration in development of the Government’s plan.

PBA Elements
pba team players
PBA involves the entire acquisition team -FAR Part 1.102-3. PBA Team Players

End-user

Technical

Community

COTR

Program Manager

COR

Industry

Quality

Assurance

Roles/Responsibilities

Legal

Business/

finance

Contracting Officer

pba benefits
PBA Benefits

Allows innovative solutions from industry to meet agency mission;

Maximizes competition in terms of solution and price;

Increases customer satisfaction;

Encourages the contractor and the agency to focus on achieving the mission via a partnership;

Improves the Contractor’s performance;

Encourages frequent communication between the CO/COR/COTR and the contractor; and

Ensures results are achieved with good contract management.

After award, it’s “we” and “us!”

9

pba far references
FAR 1.102, Statement of Guiding Principles – highlights PM role

FAR Part 2, Definition - new definitions

FAR Part 7 Acquisition Planning

FAR Part 10, Market Research

FAR Part 11, Describing Agency Requirements

FAR Part 16, Types of Contracts

FAR Part 37, Service Contracting – recognizes use of SOO when PWS is not suitable

FAR Part 46, Quality Assurance

PBA FAR References
pba training requirements
PBA Training Requirements

All agency personnel are encouraged to complete a PBA training course

FAC-PM certification (OFPP April 25, 2007 memorandum) See http://www.whitehouse.gov/omb/procurement/workforce/ fed_acq_cert_042507.pdf.

Agency acquisition workforce policy may include these PBA training requirements at the appropriate level for all members of the acquisition workforce.

12

fai pba training opportunities
FAI PBA Training Opportunities

FREE three-day workshop on PBA  just-in-time solution for acquisition teams from various agencies.

Participants are encouraged to bring their current PBA documents and are given a chance to refine these documents in the training class.

FREE training at various locations around the country. Students should register online at www.fai.gov.

Questions about this training should be directed to FAI student services at 703-805-2300.

13

dau pba training resources
DAU PBA Training Resources

“Mission Focused Service Acquisitions,” course no. ACQ265, and two online learning modules: CLC 013, Performance-Based Services Acquisitions and CLM 013, Work Breakdown Structure

PBA Community of Practice (https://acc.dau.mil/pba), includes the above PBA training information as well as other training opportunities, policy and guidance, tools and related links.

The Acquisition Center of Excellence for Services Community of Practice, at https://acc.dau.mil/ace.

Additionally, many private sector firms offer PBA training. See http://acquisition.gov/SevenSteps. DAU also has BPAs with 4 firms for PBA training.

14

slide15

PBA a way forward

Lyle Eesley,

Director, Learning Center of Excellence for Service Acquisition

Defense Acquisition University

Lyle.Eesley@dau.mil

Date 8 Nov 2007

Time 14:10

why isn t pba catching on
Lack of “Up Front” Investment

Tactical Acquisition primary focus

Requires Strategic Business Planning

Where is Contracting during the critical requirements planning process?

We’re busy come back later…

Why isn’t PBA catching on….?
slide17
You got to be very careful if you don't know where you're going, because you might not get there.

- Yogi Berra

pba is about communicating the art of the possible and the need for change
Develop the Vision and the case for change

Leadership commitment and support

Communicate the Vision

Overcoming the resistance to change

Build teams capable of exploring alternatives

Understand the Mission improvement opportunities

Create execution strategies

Develop in depth understanding of the Mission Objective and Market Place.

PBA is about communicating the Art of the possible and the need for change
performance paradox
Performance Paradox

How Trust affects Mission Results?

Mission Results

Mission Results

Open to Industry

Input

More Trust Less

Government

Control

But Verify

Performance Standards

and Outcomes

PWS or SOO

Industry created value

thru innovation

Reduced Oversight

Specs & Gov defined process

SOW

Compliance focus

Increased Oversight

performance paradox20
Performance Paradox

How Trust affects Mission Results?

Mission Results

Mission Results

Government Concerns

Mission commitment

Nature of the requirement

Jobs, Change

Open to Industry

Input

More Trust Less

Government

Control

But Verify

Performance Standards

and Outcomes

SOO or PWS

Industry created value

thru innovation

Reduced Oversight

Specs & Gov defined process

SOW

Compliance

Increased Oversight

performance paradox21
Performance Paradox

How Trust affects Mission Results?

Mission Results

Mission Results

Government Concerns

Mission commitment

Nature of the requirement

Jobs, Change

Open to Industry

Input

More Trust Less

Government

Control

But Verify

Performance Standards

and Outcomes

SOO or PWS

Industry created value

thru innovation

Reduced Oversight

Contractor Concerns

What’s been left out

Who’s carrying the risk

Is this another price shoot out or are they looking for value

Are they good partners

Specs & Gov defined process

SOW

Compliance

Increased Oversight

performance paradox22
Performance Paradox

How Trust affects Mission Results?

Mission Results

Government Concerns

Mission commitment

Nature of the requirement

Jobs, Change

Mission Results

Trust

Dividend

Increases

Mission Results

Trust

Tax

Decreases

Mission Results

Open to Industry

Input

More Trust Less

Government

Control

But Verify

Performance Standards

and Outcomes

SOO or PWS

Industry created value

thru innovation

Reduced Oversight

Contractor Concerns

What’s been left out

Who’s carrying the risk

Is this another price shoot out or are they looking for value

Are they good partners

Specs & Gov defined process

SOW

Compliance

Increased Oversight

aqc 265 mission focused services
4 Day classroom course for requirements and contracting communities

Start with old SOW and develop new PWS or SOO

Teams develop sections of requirements document

Develop performance standards and AQL

Performance Requirements Summary and QASP

Develop Business strategy with proposed contract type and incentive arrangement if warranted

Develop Section L and M of RFP

AQC 265 Mission Focused Services
pba requires linking mission objective with results to be achieved

And I know to measure the work that is addressed by the standards!

PBA requires linking Mission Objective with results to be achieved

Objective

Result 1

Standard 1

Standard 2

I know what’s important…the results that satisfy my objective!

Result 2

Standard 1

Standard 2

Standard n

Source: Performance-Based Service Acquisition: Measure What You Manage by Booz Allen and Hamilton

focus on the results achieved
Approach 1—The Trivial Many

Software lines of code written, per developer, per day (coding efficiency)

number of software coding errors per 1000 lines of code (coding error rate)

mix of senior and junior developers

percent of development time required for documentation

hours required to implement each requirement

number of software defect reports from end-users

Approach 2—The Critical Few

schedule performance

percent of time required for re-work

number of software defect reports from end users

Focus On The Results Achieved
  • In a result-driven strategy, the right measures are those that focus on the results achieved, rather than the processes used. For example…
pba requires linking mission objective with results to be achieved26
PBA requires linking Mission Objective with results to be achieved

Objective

Result 1

Standard 1

Measurement Method

Standard 2

Measurement Method

I know what’s important…the results that satisfy my objective!

Result 2

Measurement Method

Standard 1

Measurement Method

Standard 2

Measurement Method

Standard n

Source: Performance-Based Service Acquisition: Measure What You Manage by Booz Allen and Hamilton

dau learning center of excellence for service acquisition
Knowledge Sharing

Market Intelligence driving Best Service Acquisition Practices and Principles in Industry and Government

Learning assets focused on Service Acquisition

Service Acquisition Workshops (SAW)

Team Building and Communication

Developing performance outcomes and metrics

Acquisition and Source Selection

Learning and job support assets

Service Acquisition Mall

Performance Support

SAW focused on specific requirement and acquisition team

DAU - Learning Center Of Excellence for Service Acquisition
market intel commercial practices research
On going joint University of Tennessee and DAU effort

Interview over a dozen companies

Focused on three areas

Maintenance and Equipment Repair

Real Property Maintenance

Advisory and Assistance Services

Will result in SAW workshop and commercial practices data

Market Intel Commercial Practices Research
service acquisition mall
Service Acquisition Mall

Product Service CodesA - Research and DevelopmentB - Special Studies and Analyses - Not R&DC - Architect and Engineering - ConstructionD - Automatic Data Processing and TelecommunicationE - Purchase of Structures and FacilitiesF - Natural Resources and ConservationG - Social ServicesH - Quality Control, Testing, and InspectionJ - Maintenance, Repair, and Rebuilding of EquipmentK - Modification of EquipmentL - Technical RepresentativeM - Operation of Government Owned FacilitiesN - Installation of EquipmentP - Salvage ServicesQ - Medical ServicesR - Professional, Administrative and Management SupportS - Utilities and Housekeeping ServicesT - Photographic, Mapping, Printing, and PublicationsU - Education and TrainingV - Transportation, Travel and RelocationW - Lease or Rental of EquipmentX - Lease or Rental of FacilitiesY - Construction of Structures and FacilitiesZ - Maintenance, Repair or Alteration of Real Property

Team or Individual selects the specific Product Service Code (PSC) for their requirement

PSC Code

Decide how to measure and manage performance

Develop

PWS or

SOO

Select

Right

Contractor

Form the

Team

Define the

Problem

Market

Intelligence

Manage

Performance

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Using Seven Steps to PBSA as guide Learning assets and Knowledge specific to that PSC are provided to Team or individual. Using Aircraft Maintenance as an example J015…

service acquisition mall30
Service Acquisition Mall

PSC Code

J015 Maintenance-Repair of aircraft

Decide how to measure and manage performance

Develop

PWS or

SOO

Select

Right

Contractor

Form the

Team

Define the

Problem

Market

Intelligence

Manage

Performance

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Policy Issues

Samples/Examples:

Team Charter

Learning Assets

CLMs:

Effective Team Building

Project Mgt for Service Acq

Seven Step Process

First Person Accounts:

service acquisition mall31
Service Acquisition Mall

PSC Code

J015 Maintenance-Repair of aircraft

Decide how to measure and manage performance

Develop

PWS or

SOO

Select

Right

Contractor

Form the

Team

Define the

Problem

Market

Intelligence

Manage

Performance

Step 3

Step 1

Step 2

Step 4

Step 5

Step 6

Step 7

Current Market Intel for JO15:

Commercial

Government

Common Performance Measures:

Commercial

Government

Sourcing Options:

AF Contracts

Army Contracts

Navy Contracts

Learning Assets

CLMs:

Market research

First Person Accounts:

Professional Associations:

service acquisition mall32
Service Acquisition Mall

PSC Code

J015 Maintenance-Repair of aircraft

Decide how to measure and manage performance

Develop

PWS or

SOO

Select

Right

Contractor

Form the

Team

Define the

Problem

Market

Intelligence

Manage

Performance

Step 4

Step 1

Step 2

Step 3

Step 5

Step 6

Step 7

Training:

When do I use PWS or SOO?

Answer these questions:

JO15 Performance Outcomes Samples/ Examples:

Army

Navy

Air Force

NASA

Coast Guard

JO15 PWS Samples/ Examples:

Army

Navy

Air Force

NASA

Coast Guard

JO15 SOO Samples/ Examples:

Army

Navy

Air Force

NASA

Coast Guard

First Person Accounts:

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