Breakout Session # WC05-386 Janie Maddox, President, Corporate Learning Solutions

2. PBSA Engagements Breakout Session # WC05-386 Janie Maddox, President, Corporate Learning Solutions Fred Sollish, Managing Director, eParagon April 26, 2005 Time 2:45 – 3:45 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

3. Incentive Plan SOO Objectives Incentives Tasks PBSA QASP PWS QA Standards Metrics . NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

4. Initiating the PBSA Approach As cited in the Procurement Executives Council’s Strategic Plan: “…over the next five years, a majority of the service contracts offered throughout the federal government will be performance-based. In other words, rather than micromanaging the details of how contractors operate, the government must set the standards, set the results and give the contractor the freedom to achieve it in the best way.” ~ President G. W. Bush, June 9, 2000 ~ NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

5. Is… A preferred method for acquiring services Public Law (PL) 106-398 OFPP emphasis area since June 1994 DOD goal--40% of service acquisitions by 2005 A contract structure that communicates measurable outcomes rather than directing performance processes Is not… A type of contract T & M Fixed Price Cost Reimbursable Uniformly applied within all federal agencies Done quickly Outsourcing What is PBSA? A Performance Based Service Acquisition NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

6. Teamwork in the Acquisition Process • (FAR 1.102(c.))--The acquisition team consists of ….. not only representatives of the technical, supply, and procurement communities but also the customers they serve, and the contractors who provide the products and services • (FAR 1.102-3)--By identifying the team members in this manner, teamwork, unity of purpose, and open communication among the members of the Team in sharing the vision and achieving the goal of the System are encouraged. NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

7. PBSA Engagement Approach Review existing SOW and revise in terms of what vs. how NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

8. PBSA Template Desired Outcomes/Objectives: What do we want to accomplish as a result of this contract effort? Performance Requirement Performance Requirement Required Service What task/s must be performed to arrive at the desired outcome? Desired Results of Performance What are the desired results from those tasks? (i.e. completeness, accuracy, quality, timeliness, cost) Performance Standard Identify an indicator of the desired performance that can be measured (i.e. completeness, accuracy, quality, timeliness, cost) + What should the standard for the performance indicator be? (Usually stated as a rate) Acceptable Quality Level How much deviation from the performance standard will be allowed, if any? Performance Assessment How will we determine that the desired results have been achieved? (Assessment Method) What will we examine? (i.e. logs, reports)-QAP Incentives for exceeding or not meeting the Standard/ Acceptable Quality Level What carrot or stick will best reward superior performance or punish poor performance? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

9. ~ Focus and Content ~ “The Statement of Objectives (SOO)” • CONTENT • What, not how • Brief, clear and concise • FOCUS • What are your requirements? • What is reasonable? • What are the constraints? (In terms of risk, cost and schedule) NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

10. GOVERNMENT Prepares SOO which describes top-level objectives including: What? When? Where? How many? How well? Describe work in terms of what’s expected as opposed to how the work shall be done What is to be accomplished as a result of this contract effort? CONTRACTOR To understand and prepare SOW to reflect SOO “The Statement of Objectives (SOO)” ~ Responsibilities ~ SOO NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

11. ~ Focus and Content ~ “The Performance Work Statement (PWS)” • FOCUS • Describes the service to be performed in terms of outcomes • Contractor may develop PWS in response to the SOO • Communicates needs and tasks • CONTENT • Innovation • Agreed-to performance tasks/requirements • Clear and consistent terms NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

12. GOVERNMENT Identifying desired results from the tasks completeness accuracy quality timeliness cost CONTRACTOR What tasks must be performed How the work will be accomplished to arrive at the desired outcomes Reflects contractor driven solutions “The Performance Work Statement (PWS)” ~ Responsibilities ~ PWS NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

13. ~ Focus and Content ~ “The Performance Standards” • FOCUS • Metrics to measure contractor success in meeting the Performance objective • Communicates success • CONTENT • Agreed-to performance standards ~qualitative and/or quantitative~ NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

14. GOVERNMENT Identify and review appropriate and measurable performance standards May request KTR approach as part of the Request for Proposal CONTRACTOR Propose appropriate Performance Metrics based upon: Knowledge Experience Understanding “Performance Standards” ~ Responsibilities ~ STDs NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

15. ~ Focus and Content ~ “The Quality Assurance Surveillance Plan (QASP)” FOCUS • Provides a systematic method to evaluate the required services • Concentrates on quality, quantity and timeliness of performance outputs delivered by the contractor • What performance will be measured? • How will performance be measured and how often? • Who will be responsible for measuring performance CONTENT • Performance Requirements Summary (PRS) • Surveillance schedule • Surveillance methods • 100% Inspection • Random Sampling • Periodic • Customer Input • Contract administration resources needed NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

16. GOVERNMENT Review of Ktrs’ QAP COTR Assessment of contractor performance against performance standards. Requirements: Maintain complete and accurate documentation Maintain thorough knowledge of contract requirements Use a surveillance checklist CONTRACTOR Quality Assurance Plan How the work is being evaluated,assessed and managed “The Quality Assurance Surveillance Plan (QASP)” ~ Responsibilities ~ QASP NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

17. ~ Focus and Content ~ “The Incentive Plan” • FOCUS • Will enhanced performance provide additional mission value? • How much is the agency willing to pay? • Who will benefit from the incentive? • Incentivize only those items that are most important to you • CONTENT • The incentives should be realistic, attainable and measurable • The incentives should be built on performance objectives and standards • Must be tailored to the contract type NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

18. GOVERNMENT Working with Ktr develop awards and consequences to motivate the achievement of higher levels of performance Are incentives agreed to by all parties? On time incentive assessments CONTRACTOR What will motivate our performance? Are incentives agreed to by all parties? “The Incentive Plan” ~ Responsibilities ~ Incentive Plan NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

19. Putting it All Together (with an AQL) “Performance Requirements Summary” Desired Outcomes/Objectives: Timely transportation of personnel Performance Requirement Required Service Taxi services Desired Results of Performance Timely Pickup of personnel Performance Standard Taxi pickup is to be provided within 4 minutes of an agreed to pickup time Acceptable Quality Level  10% of error Performance Assessment Random Sampling-Verify monthly results of dispatch logs as reported by Contractor Incentives for exceeding or not meeting the Acceptable Quality Level +/- 5% dollar value of monthly service NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

20. Putting it all together (without an AQL)“Performance Requirements Summary” Desired Objectives:Users shall have access to all desktop computing functions, as needed Performance Requirement Required Service  Maintain desktop systems Desired Results of Performance Desktop systems shall be available to all users, M-F, 6am-10pm Performance Standard 85% availability of desktop systems during required hours Acceptable Quality Level  none Performance Assessment Random Sampling-Verify monthly results of desktop system availability as reported by Contractor Incentives for exceeding or not meeting the Performance Standard +/- 5% dollar value of monthly service NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

21. Commercial Service Level Agreement • Addendum to SOW • Based on supplier selection criteria • Finalized following contract start-up • Includes metrics • Includes Key Performance Indicators • Incentive and corrective action related NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

22. Sample Performance Criteria • Technology • Quality • Cost • Service • Fundamentals NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

23. Examples: • Technology: • Maintains timeline • Meets NPI Specs • Responsive NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

24. Examples • Business Fundamentals: • Maintains financial strength • Fully staffed • Invoice accuracy NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

25. Setting Goals • Best practice • % improvement • Gap Analysis NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

26. Metrics NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

27. Evaluation NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

28. Trending Example NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

29. Trending Example 1 2 CAR NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

30. GEMS Performance Plus by ExecuSys, Inc. Your Source For Full Service Information System Solutions NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

31. PBSA Problem Statement • Management Visibility into Contract Performance is Limited to Backwards Looking Financial Data • Performance Based Acquisitions Raise the Bar for Federal Contractors • Performance Work Statement • Articulated Measurement Objectives • Higher Degree of Accountability • Clear Line-of-Insight for Government Customer • Contractors Must Devise and Propagate a Solution to Meet the New Challenges NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

32. Product Solution GEMS Performance Plus • Web Based • Customized Functionality • Holistic View of Contract Performance • Performance Baselines • Variance Analysis • Historical and Forward Looking Data • Financial, Operations, and External • Shared Real-Time Information • Metric Maintenance and Administration • Drill downs, Graphics, and Reporting NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

33. Benefits • Measure and analyze performance criteria quickly and efficiently • Reduce overruns through efficient monitoring and management of resources • Improve communications through online variance analysis reporting and corrective actions • Eliminate time-consuming and cumbersome spreadsheet analysis NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

34. FEDERAL GOVERNMENT AUTOMOTIVE AFTERMARKET Customers & Markets Markets Served INFORMATION ENGINEERING NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

35. Contact Information Robin Hallac Vice President, Product Development ExecuSys, Inc. 6767 N. Wickham Rd., Suite 208 Melbourne, FL 32940 Phone: 321-253-0077 Ext. 208 Fax: 321-253-0099 Email: rhallac@execusys.com Online: http://www.execusys.com NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”