Buy Lines: Project management tools help agencies measure performance

Bob Dickson

Government leaders are turning more to structured approaches to measure contractor and agency performance. Besides being versed in the traditional award-fee and incentive-fee arrangements found in many contracts, companies should also know the tools and techniques associated with contract agency management.

The businesslike principles inherent in these tools will seem familiar to many in industry. But let's look at how they are likely to be applied in a government acquisition context.

Several techniques are available to review and track the progress of a project and develop relevant performance measures. The key for managers is that they set a framework for providing the right level of management, the right information, at the right time, for effective decision making. The following are among the most common tools.

Quality assurance surveillance plans. These align objectives with relevant measures and outline how progress will be monitored to ensure that the defined performance measures are being achieved. They also should define acceptable quality levels, surveillance methodology, incentives and disincentives.

Earned-value management systems. These systems are an industry and government standard for defining the processes for baselining, authorizing, crediting, tracking and changing the costs, schedule or content of a project. They provide the processes for assessing cost and schedule variance based on earned value. Earned value uses the original estimates and progress to date to show if spending is on budget and if progress of the tasks is keeping pace with the baseline plan.

It provides an integrated view of the cost, schedule and technical aspects of the project. It lets you assess quickly if you have successfully completed half of the work, when you have spent half of the money and when half of the time has passed.

Service-level agreements. These document project goals and objectives, establish costs and schedules, and set forth performance measures for contract tasks and project-level measures for high-impact, mission-critical tasks. These agreements may be part of the quality assurance surveillance plan or separate.They allow the agency and service provider to identify upfront what services will be provided and how they will be measured; and they spell out what happens if the level of service is not delivered as promised.

Balanced scorecard. This combines financial and operational measures into an integrated system of performance indicators. The scorecard provides an enterprisewide view of an organization's overall performance by integrating financial measures with other performance indicators related to customer perspectives, internal business processes and organizational growth, learning and innovation. The intent is to provide a flexible tool that allows organizations to set goals and track achievements.

Each of these tools requires regular monitoring to effectively integrate lessons learned and opportunities for improvement. Therefore, it is essential to ensure robust communications between agencies and service providers.

These elements of the government and industry partnership provide a framework for an evolving performance management system. Agencies that use these tools and techniques establish a framework for a disciplined approach to governance, risk management, communications and performance management. This approach effectively links acquisition and contract management functions to agency performance management.

Bob Dickson is vice president of Acquisition Solutions Inc., Chantilly, Va. His e-mail address is bdickson@acqsolinc.com.

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