Online extra: Climbing the performance-based stairway
- By Patience Wait
- Apr 21, 2003
In 2001, a task force comprised of volunteers from several federal departments created a roadmap to help agencies implement performance-based contracting. Acquisition Solutions Inc., a consulting company based in Oakton, Va., that specializes in advising on procurement policy and strategy, assisted in the process.
The task force developed a template with seven steps for a performance-based services acquisition. To get more detailed information for each step, visit www.acquisitionsolutionsinc.com and click on "Seven Steps to PBSC."
Step 1. Establish the team
- Ensure senior management involvement and support
- Tap multi-disciplinary expertise
- Define roles and responsibilities
- Develop rules of conduct
- Empower team members
- Identify stakeholders and nurture consensus
- Develop and maintain the knowledge base over the project life
- "Incent" the team: establish a link between program mission and team members' performance
Step 2. Decide what problem needs solving
- Link acquisition to mission and performance objectives
- Define desired results
- Decide what constitutes success
- Determine the current level of performance
Step 3. Examine private-sector and public-sector solutions
- Take a team approach to market research
- Spend time learning from public-sector counterparts
- Talk to private-sector companies before structuring the acquisition
- Consider one-on-one meetings with industry
Step 4. Develop a performance work statement or statement of objectives
- Performance work statement: Conduct an analysis; apply the "so what" test; capture the results of the analysis in a matrix; write the performance work statement; let the contractor solve the problem, including the labor mix
- Statement of objectives: Begin with the acquisition's "elevator message;" describe the scope; write the performance objectives into the statement; make sure the government and the contractor share objectives; identify the constraints; develop the background; make the final checks and maintain perspective
Step 5. Decide how to measure and manage performance
- Review the success determinants
- Rely on commercial quality standards
- Have the contractor propose the metrics and the quality assurance plan
- Select only a few meaningful measures on which to judge success
- Include contractual language for negotiated changes to the metrics and measures
- Apply the contract-type order of precedence carefully
- Use incentive-type contracts
- Consider "award term"
- Consider other incentive tools
- Recognize the power of profit as motivator
- Consider the relationship
Step 6. Select the right contractor
- Compete the solution
- Use down selection and "due diligence"
- Use oral presentations and other opportunities to communicate
- Emphasize past performance in evaluation
- Use best-value evaluation and source selection
- Assess solutions for issues of conflict of interest
Step 7. Manage performance.
- Keep the team together
- Adjust roles and responsibilities
- Assign accountability for managing contract performance
- Add the contractor to the team at a formal "kick-off" meeting
- Regularly review performance in a Contract Performance Improvement Working Group
- Ask the right questions
- Report on the contractor's "best performance"
Source: Acquisition Solutions Inc.