Acquisition of Services

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Step 7: Performance Management

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Each page in this pathway presents a wealth of curated knowledge from acquisition policies, guides, templates, training, reports, websites, case studies, and other resources. It also provides a framework for functional experts and practitioners across DoD to contribute to the collective knowledge base. This site aggregates official DoD policies, guides, references, and more.

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Directly quoted material is preceeded with a link to the Reference Source.

Reference Source: Guidance from A&S.  Based on DAG Chapter 10, Section 3.3.2 content, Jan 2020

Once the contract is awarded, managing the performance becomes the number one duty of the FSM, COR, and the Contracting Officer, collectively known as the “administrative team.” Other individuals needed to appropriately manage the performance are:

  • Quality Assurance Specialist
  • Contractor
  • Legal
  • Small Business Specialist, if a small business award

The administration performance team will review Step Seven under the Service Acquisition Mall.

Contract Management

Reference:  Guidance from A&S.  Based on DAG Chapter 10, Section 3.3.2 content,

The Government administrative team finalizes the management plan discussed during the strategy phase. The following are finalized:

  • Roles and Responsibilities of Each Team Member
  • Go over and get the appropriate signatures on the COR Delegation Letter
  • Conduct a post-award review, if required
  • Communication plan between the team members and the SSM

 

The administrative team participates in the post-award conference, or kick-off meeting, which includes the awardee and all the stakeholders. During this conference, all the participating parties:

  • Review the FSM performance management process
  • Review each individual requirement stated in the PWS, SOW, and any attachments, update the QASP
  • Ensure the incentive plan is introduced and understood by everyone
  • Provide COR introductions
  • Explain the Contractor Performance Assessment Reporting System (CPARS) and how it will be used to document the contractor’s performance.

 

During the COR introductions, it is explained that the COR has administrative responsibility for the contract, but only the Contracting Officer can obligate government or change the contract terms and conditions. The COR is required to be certified for the complexity level needed for a services acquisition requirement in accordance with DoDI 5000.72, DoD Standard for Contracting Officer’s Representative (COR) Certification, and the COR should perform their duties in accordance with their COR Designation Letter, the DoD COR Handbook, and any agency specific procedures.  In order to complete the transition from acquisition to performance, the contractor is incorporated into the performance management team. An essential element of performance management is open and frequent communication between the government and the contractor. Ensure the contractor clearly understands how performance is being measured to ensure there are no surprises. Characteristics of strong relationships include the following:

  • Trust and open communication
  • Strong leadership on both sides
  • Ongoing, honest self-assessment
  • Ongoing interaction via daily engagement, meetings, reports, or CPARS
  • Ensuring mutual benefit or value throughout the relationship

Performance Management

Reference:  Guidance from A&S.  Based on DAG Chapter 10, Section 3.3.2 content,

The FSM executes the performance management process discussed during the post-award conference and reviews the communication plan. Performance management includes a process for how data is collected annually, reported, and the inventory of contracted services requirements.  The performance management process also assesses the effectiveness of the contractor’s performance against the strategy originally developed to determine if it is still achieving the required mission results. It will also identify what should be changed or modified during the next acquisition cycle to improve mission results. A record is kept identifying what improvements could be made the next time because, before you know it, it will be time to start the acquisition process all over again.

Service contracts may have performance periods lasting several years. Continuous improvement should be one of the acquisition team’s goals. For example, regular meetings are planned with the contractor to identify actions both parties can take to improve efficiency. These might include the identification of significant cost drivers and what improvement actions could be taken, i.e., “should cost.” Sometimes agencies require management reporting based on policy, without considering the cost of the requirement. For example, in one contract, an agency required certain reports to be delivered regularly each Friday. When asked to recommend changes, the contractor suggested the report due date be shifted to Monday because weekend processing time costs less. This type of collaborative action will set the stage for the contractor and government to work together to identify more effective and efficient ways to measure and manage the performance results over the life of the contract.

The FSM coordinates with the SSM to schedule an annual requirements review with the SRRB, and the Contracting Officer coordinates the post-award peer reviews. The post-award peer review criteria (see Procedures, Guidance, and Information (PGI) 201.170-1) are designed to guide the administrative team focus on OSD or Component metrics.

Communications

Reference:  Guidance from A&S.  Based on DAG Chapter 10, Section 3.3.2 content, Jan 2020

Following the contract award, the communication plan is reviewed and a determination made for how and to whom contractor performance information is reported. It’s vital to keep communication links open with both the contractor and stakeholders throughout the performance period of the contract. Establish regularly scheduled meetings with the contractor to keep everyone informed of pending actions which could impact performance. Discuss any issues the contractor may have, such as invoicing or payment problems. Identifying potential problems early is a key way to keep from having negative performance impacts. Implement the performance-reporting structure developed in Step Four.  Capturing and reporting performance information is critical for two reasons. First, it keeps your stakeholders well informed, based on actual performance results as measured by your CORs. Second, it provides documented performance trends and results to enable an open and honest discussion with the contractor concerning the results achieved.  Performance reviews are held on a regular basis with both the stakeholders and contractor. The frequency of stakeholder reviews is often dictated by the importance or complexity of the service under contract. Quarterly performance reviews with stakeholders are a minimum. More complex acquisitions may require monthly reviews.  For most contracts, monthly contractor performance reviews is appropriate. For contracts of extreme importance or contracts in performance trouble, more frequent meetings may be required. During this review, the acquisition team should be asking these questions:

  • Is the contractor performance meeting or exceeding the contract’s performance standards?
  • Are there problems or issues that we can address to mitigate risk?

There should be a time in each meeting when the agency asks, “Is there anything we are requiring that is extremely affecting your performance in terms of quality, cost, or schedule?” Actions discussed should be recorded for the convenience of all parties, with responsibilities and due dates assigned. At each review point, the QASP should be reviewed to determine if the approach to the inspection should be changed or revamped. If an objective or standard needs to be changed, it is necessary that both parties agree to any modification, however, the change may have a cost impact.

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

Steps One through Six have prepared you for this step. Step Seven delivers the performance results your stakeholders need to successfully support their mission. It’s not time to declare victory and move on. Your engagement with your contractor and stakeholders will often cover several years.

There are two key elements to this step. First are the basic functions of administering the contract such as validating contractor invoices, tracking cost data when required, managing change as it occurs and making sure the contractor is getting paid on a timely basis. The second key function is managing the relationship and expectations between three key groups; customers, stakeholders and the contractor.

Developing an environment of trust and fair play is vital to keeping all parties focused on achieving the intended mission results. This includes assessing performance using the QASP, documenting performance for any incentive arrangement you may have created, and finally making sure performance is documented annually in the government past performance database with a fair and objective Contractor Performance Assessment Reporting System (CPARS). 

7.1 Transition to Performance Management

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

As new contract performance starts the team must shift from acquisition to performance management. This means focusing on ensuring that the performance results contained in the contract are delivered. To accomplish this effectively, everyone involved clearly understands their role and responsibilities in completing the assessment strategies contained in the QASP. The two key responsible parties are the contracting officer and the COR.  Contracting officers have specific responsibilities that can’t be delegated or assumed by the other members of the team. These include, for example, making any commitment relating to an award of a task or contract; modification; negotiating technical or pricing issues with the contractor; or modifying the stated terms and conditions of the contract. The contracting officer relies on the COR to be his/her eyes and ears for providing an accurate assessment of contractor performance.

The duties and responsibilities of the COR are contained in a designation letter signed by the contracting officer. Make sure the COR and anyone else involved with monitoring contract performance has read and understands the contract and has the training, knowledge, experience, skills, and ability to perform his/her roles. The COR must know the performance requirements and standards in depth and understand the assessment strategies contained in the QASP. The COR should also be effective communicators with good interpersonal skills.  To complete the transition, incorporate the contractor into the performance management team. An essential element of performance management is open and frequent communication between the government and the contractor. Make sure that the contractor clearly understands how performance is being measured to ensure there are no surprises. Remember the contractor’s successful performance is your goal too. At its most fundamental level, a contract is much like a marriage. It takes work by both parties throughout the life of the relationship to make it successful. Characteristics of strong relationships include the following:

  • Trust and open communication
  • Strong leadership on both sides
  • Ongoing, honest self-assessment
  • Ongoing interaction
  • Creating and maintaining mutual benefit or value throughout the relationship

7.2 Manage and Administer Overall Program

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

If your requirement involves a contract vehicle that uses task orders for individual requirements make sure you develop a plan to capture performance at the task order level. This task order performance information should flow up the contract level to be captured and reported. 

7.3 Manage Performance Results

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

Following contract award you should review your communication plan and determine how and to whom you will report contractor performance information.

It’s vital to keep the communication links open with both your contractor and stakeholders throughout the performance period of the contract.

Establish regularly scheduled meetings with the contractor to keep everyone informed of pending actions that could impact performance such as scheduled exercises and IG visits.

Discuss any issues the contractor may have such as invoicing or payment problems. Identifying potential problems early is a key way to keep them from having performance impacts. Implement the performance reporting structure you developed in Step Four. 

7.4 Conduct Quarterly Supplier and Key Stakeholders Performance Reviews

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

A best practice concerning service contracts is to schedule regular reviews with your key stakeholders and contractor. Your communication plan should now reflect the schedule for these reviews. As has been mentioned several times already, good communication is absolutely essential. That’s why a regularly scheduled review is important. It provides an opportunity to discus current performance with the stakeholder. It also offers a chance to gain insight on projected changes that might require a change to the current contract. Being proactive is better than the best reactive strategy. 

7.5 Evaluate Effectiveness of Strategy

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

 

Collect feedback from stakeholders and review to evaluate strategy.

Analyze strategy performance using performance based objectives and metrics.

Reevaluate current strategy for changes.

Regularly review performance with the multi-functional team.

7.6 Develop Plan for Managing Continuous Improvement

Reference Source: Guidance from A&S.  DAU Service Acquisition Mall, Step 7, Jan 2020 

Service contracts tend to have performance periods lasting several years. Continuous improvement should be one of the acquisition team’s goals. For example, plan on regular meetings with the contractor to identify actions both parties can take to improve efficiency. This might include the identification of significant “cost drivers’ and what improvement actions could be taken.

Sometimes agencies require management reporting based on policy without considering what the cost of the requirement is. For example, in one contract, an agency required that certain reports be delivered regularly on Friday. When asked to recommend changes, the contractor suggested that report due date be shifted to Monday because weekend processing time costs less. This type of collaborative action will set the stage for the contractor and government to work together to identify more effective and efficient ways to measure and manage the performance results over the life of the contract.

Documentation Examples and Templates

Reference Source: DAU Service Acquisition Mall, Step 7 Templates

Examples and templates of documentation are available in the Service Acquisition Mall (SAM):