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Breakout Session # 1608 Dave Theimer Assistant Vice President, Marketing NISH April 12, 2006 10:45 AM – 11:45 AM

Performance Based Services Contracting, Streamlined with JWOD. Breakout Session # 1608 Dave Theimer Assistant Vice President, Marketing NISH April 12, 2006 10:45 AM – 11:45 AM. Objectives. Obtain an introduction to JWOD

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Breakout Session # 1608 Dave Theimer Assistant Vice President, Marketing NISH April 12, 2006 10:45 AM – 11:45 AM

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  1. Performance Based Services Contracting, Streamlined with JWOD Breakout Session # 1608 Dave Theimer Assistant Vice President, Marketing NISH April 12, 2006 10:45 AM – 11:45 AM NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  2. Objectives • Obtain an introduction to JWOD • Understand Performance Based Contracting techniques used in JWOD services contracting • Learn About Streamlining the Federal Procurement Process using JWOD NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  3. Javits-Wagner O’Day Act (JWOD) Javits-Wagner O’Day Act (JWOD) • Public Law • Wagner-O’Day Act of 1938 for NIB • Javits Amendment of 1971 added People with Disabilities • NISH formally organized in 1974 • Not federal employees • Javits-Wagner-O’Day Act (41 U.S.C. 46-48c) • Implemented through 41 CFR Chapter 51 and FAR Subpart 8.7 • Committee for Purchase from People Who Are Blind or Severely Disabled (15 Members) NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  4. JWOD Organization NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  5. Members of the “Committee” NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  6. Northwest Region (206) 272-3500 North/Central Region East Region Pacific West (847)789-8400 (571) 226-4600 Region (925)485-4100 South Central Region South Region (817)649-5419 (770)424-9093 NISH Organization NISH Organization NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  7. JWOD is Smart Business JWOD is Smart Business • Quality services & products • Fair market prices • Long term partnerships/relationships • Ease of contract award and administration • In step with Acquisition Streamlining • Break to taxpayers • Reduced entitlements • New taxpayers • Direct Benefits to Mission! NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  8. ...some of our new "Services" • Off-Site Telecommuting Capabilities • Central Facility Management • Document Conversion & Management • Printing Services • Linen Rental Service (Product and Service) • Family Housing Maintenance • Call Centers • Wheeled Vehicle Maintenance • (FORT LEWIS) • Nationwide/Agencywide Arrangements • State Department - Passports • INS - Visa’s • Marine Corps - Food Service NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  9. JWOD Act 41 USC 46-48(c) • Requires purchase of items on the Procurement List from designated sources • Sources are Non Profit Agencies that employ individuals who are blind or have severe disabilities. • 75% of direct labor must be provided by individuals that are blind or have severe disabilities NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  10. FAR 8.7 • Part 8-Required Sources of Supplies and Services • Subpart 8.7 - Acquisition from Nonprofit Agencies Employing People Who Are Blind or Severely Disabled • Regulatory implementation of the JWOD Act and rules of the Committee for Purchase NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  11. Employment • 45,303 Employed • NIB 4,149 • NISH 41,154 NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  12. JWOD Approach to Performance-Based Contracting NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  13. Performance-Based Contracting • A PBSC is structured around the purpose of the work as opposed to the manner in which it is to be performed • Focus is on measuring the output of a contractor’s effort rather than on managing those efforts NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  14. PBSC and FAR 37.601 • Performance-based contracts- • Describe the requirements in terms of the results required rather than the methods of performance • Use measurable performance standards (i.e. terms of quality, timeliness, quantity) • Specify procedures for reductions to price when services are not performed, and • Include performance incentives where appropriate NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  15. NISH & PBSC • Since many NISH Service contracts are PBSC, NISH has developed extensive experience in service contracting NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  16. Prescriptive SOW • 5.3.4 The contractor shall vacuum the rug in Room 12 daily, as follows: • 5.3.4.1 Move all tables and chairs to the stage on the North side of the room • 5.3.4.2 use a commercial vacuum cleaner (HooverType31C or equal) to vacuum the rug. Check to see that the bag does not need replacement. Use two passes in each direction with 3 inch overlaps, to insure entire rug surface has been vacuumed. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  17. Prescriptive SOW • 5.3.4.2 Use a hand vacuum (Electrolux Type 16 or equal) with a 4 inch wand extension to vacuum corners and recessed areas not reached by the commercial vacuum cleaner. • 5.3.4.3 After vacuuming, replace all tables and chairs in their original positions. • 5.3.4.4 Note any spills, spots, etc. for treatment. • 5.3.4.5 Store vacuum cleaning equipment in Closet 12A after use. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  18. Performance Based PWS • 5.3.4. Vacuum the rug in Room 12 daily to remove all visible traces of fuzz, lint, and other foreign materials. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  19. Key concepts • PBC is designed to ensure that contractors are given the freedom to determine how to meet the Government's performance objectives (requirements), that acceptable performance is achieved, and that payment is only made for services which meet those levels. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  20. Six Components of a PBSC • Performance Work Statement (PWS) • Performance Indicators and Standards • Performance Requirements Summary (PRS) • Acceptable Quality Level (AQL) • Quality Assurance Surveillance Plan (QASP) • Appropriate Incentives NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  21. 1. Performance Work Statement (PWS) • The PWS describes the requirements that the contractor must meet in performance of the contract • Usually a brief statement of the result required • Key is include adequate requirement statements without excess detail or “how to” NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  22. PWS and the WBS(Work Breakdown Structure) • Outputs are clearly identified • Inputs are clearly defined • WBS is required for work analysis • WBS is required for the proposal • WBS is required for pricing NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  23. Performance Work Statement (PWS) • The WBS is used to give a framework for developing the requirements of a PWS • PWS lists the performance requirements of the contract • It will guide the contractor and the Government throughout the life of the contract NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  24. 2. Performance Indicators and Standards • An indicator is an essential characteristic of acceptable performance • A standard is a definite level or degree of quality against which performance can be measured • This information must be provided in the PWS and in the PRS (if separate) and reflected in the QASP NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  25. Performance Indicators • What is the indicator, or standard, which will tell me that the service was performed satisfactorily? • Each requirement (task or deliverable) must have a performance indicator and a reasonable standard • Each standard is then tied to a description of Acceptable Quality Level (AQL) NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  26. Performance Indicators • A performance indicator is an essential characteristic of acceptable performance and a feature of output that can be measured, either quantitatively or qualitatively. • Performance Indicators must be realistic NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  27. Common JWOD Quality Indicators • Workmanship • Timeliness • Accuracy • Conformance • Customer Satisfaction NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  28. Objective, Measurable Standards Are Key to PBSC • Complete task in 30 minutes • 275 to 300 Meals served between 12-1 • Maintain grass between 3” and 5” on improved areas NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  29. Try to make Subjective standards Common Sense Standards • After sweeping, there shall be no visible dirt, trash, or foreign matter. • Door Glass will be clean if there is no visible dirt, smudges, or fingerprints • Standard must be workable both to contractor and to COTR/QAE NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  30. 3. Performance Requirements Summary • The PRS is a summary of the tasks or deliverables, the performance standards, the AQL, and the quality assurance surveillance methods to be used, and incentives to the contractor • May not be stated separately NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  31. 4. The AQL • The AQL is the degree to which the Government will allow performance to vary from the standard • Absolute standards, zero defects, are possible but expensive • For each requirement or task, there must be an AQL • Establish reasonable AQLs – be realistic, ask what is acceptable NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  32. 5. The Quality Assurance Surveillance Plan (QASP) • The QASP outlines the methodology to monitor the performance against the standards in the PWS • Written by the Government for the QAE or COTR • May be shared with the contractor (except for sampling plan) but not included in contract NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  33. 6. Appropriate Incentives • Incentives may be positive or negative, monetary or non-monetary but must be included and should be effective • The level of incentive should relate directly to the value of the outcome (AQL) • The AQL can be used to “dial in” the appropriate level of performance at the budgeted cost NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  34. The Seventh Element • Your Quality Control Plan, written based on the PWS and the QASP (provided to NISH contractors) detailing how YOU are going to manage to assure quality. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  35. DO’s of Writing a PWS • Use an experienced drafting team • Exclude “how-to” requirements • Use the WBS to outline the effort • Tailor the standards • Use commercial practices and definitions • Use workable standards for subjective standards, such as “clean” NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  36. Most Frequent Problems • Limiting what to measure • How to deal with un-measurables (subjective criteria) • Developing effective incentives NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  37. SummarySix Components of a PBSC • Performance Work Statement (PWS) • Performance Indicators and Standards • Performance Requirements Summary (PRS) • Acceptable Quality Level (AQL) • Quality Assurance Surveillance Plan (QASP) • Appropriate Incentives NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  38. Streamlining Using JWOD • JWOD offers substantial opportunities to streamline the “normal” Federal procurement process • Save staff time, effort, money • Bring services on line quicker NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  39. Acquisition– The Federal Process Identification of requirement or need Acquisition planning (FAR Part 7) Market research (FAR Part 10 Solicitation and Proposal phase (FAR Part 15) Source selection And contract award (FAR Part 15) Evaluation and Negotiation (FAR Part 15) • Functions within legal/regulatory framework implemented by the FAR • Involves entire acquisition team • Balances goals of obtaining best value for the government and promoting competition NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  40. Streamline Advantages • Can go directly to a JWOD producer with a SOW • No formal notice, no solicitation, no synopsis, no sources sought • Can immediately begin negotiation. Not a competitive environment as used in FAR –a directed procurement under FAR 8.7 • Can ask NISH to help with the SOW/PWS NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  41. Buying from JWOD • If the item is on the Procurement List, no problem; just place the order citing FAR 6.302-5, Authorize by Statute • No requirement for publication, competition, etc. • JWOD buys at the discretion of the KO if procurement is suitable. KO must balance socio-economic programs. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  42. Acquisition– The NISH Process Identification of requirement or need Contract award (FAR Part 8.7) Proposal and Negotiation (FAR Part 8.7) NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  43. New Starts • Regulations permit a contracting officer to select appropriate procurements for the JWOD program • Must demonstrate suitability • Must go through Impact process • Still no need to publicize, compete NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  44. JWOD Is Not a “Front” • Service must be suitable- i.e. can be performed by a NPA and can be performed by individuals with disabilities • Providing the Service through JWOD cannot have disproportionate impact on the previous supplier - • 75% of our direct labor must be by individuals who qualify as severely disabled NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  45. Team Approach • NISH will help prepare NPA proposal and costing package • NISH will support the NPA with training • NISH has blanket alliances with large clients such as GSA, DeCA, NAVFAC NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  46. Follow-on, the Real Pay Off • Once in the JWOD program, the procurement becomes a base year plus four follow on years (JWOD options) • Automatically renewed every five years (unless agency requirements change) • If performance problems, which is rare, NISH helps and can select replacement NPA NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  47. Feel Good Contracting Words of Wisdom Words of Wisdom “You will have no better day in your contracting career than when you award your first JWOD contract” Mark Lumer Principal Assistant Responsible for Contracting (SES) US Army Space and Missile Defense Command JWOD Champion NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  48. Q& A NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

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