AASHTO/FHWA Right of Way and Utilities Subcommittee Conference Austin, Texas May 16, 2005

1. AASHTO/FHWA Right of Way and Utilities Subcommittee Conference Austin, Texas May 16, 2005 “Consultant Performance Oversight” Gus Cannon, SR/WA

2. Where to Start http://ecfr.gpoaccess.gov • Electronic Code of Federal Regulations (e-CFR) is found on the GPO Access site which is a service of the U.S. Government Printing Office. • We’re particularly interested in Title 48, Ch. 1 known as the Federal Acquisition Regulations System.

3. Important Subchapters • Subchapter E • Part 30 – Cost Accounting Standards and Administration • Part 31 – Contract Cost Principles and Procedures • Subchapter F • Part 37 – Service Contracting • Subchapter G • Part 42 – Contract Administration and Audit Services • Part 46 – Quality Assurance

4. True Cost of Quality Hasn’t Changed John Ruskin; author and philosopher (1819-1900) “It’s unwise to pay too much, but it’s unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay to little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it’s well to add something for the risk you run. And it you do that, you will have enough to pay for something better.”

5. Simple Rules - HUGE Impact • Title 48, Subchapter F, Part 37, Section 37.000 to 37.602-5 (less than 3 pages) but the impact on the agency’s responsibility for providing Performance Oversight is huge. • Performance-based contracting methods are intended to ensure that required performance quality levels are achieved and that total payment is related to the degree that services performed or outcomes achieved meet contract standards. (subpart 37.601)

6. Ensuring Quality Performance Levels are Achieved • The contract and task orders must describe requirements in terms of results required rather than methods of performance of the work. • Use measurable performance standards in terms of quality, timeliness and quantity of the deliverables. • Specify procedures for reductions of fee or for reductions to the price of a fixed-price contract when services are not performed or do not meet contract standards. Also provide incentives where appropriate.

7. What do we consider Quality Assurance? • Title 48, Subchapter G, Part 46, Section 46.101 says; “Government Contract Quality Assurance means the various functions, including inspection, performed by the Government to determine whether a contractor has fulfilled the contract obligations pertaining to quality and quantity.”

8. Don’t Wait Until the End • We put an un-proportionate amount of work into qualifying the Provider of services and then we can’t understand why the final deliverable is less than we expected. • Why? Because that’s where our training emphasis has been. Too often the primary emphasis by auditors is on how we procured the services and not on the final deliverable.

9. What we need to do • Kick-off meetings. Use them to set the standard for what the agency expects in terms of deliverables. Be specific in terms of the quality, timeliness and quantity you expect. • Require face time and tell them what you expect at the meetings. Never meet just to meet. Establish an agenda, note the specific reports you want to see and then don’t cancel. • Establish your audit and evaluation guidelines and format. These must be in writing – do not leave anything to chance.

10. Written Evaluations • Probably the most difficult part of the job. Audits are for the most part, straight forward, and performed by parties other than you. We’re talking written evaluations here and it’s much more difficult than it appears.

11. Who, What, When & How Many • Who prepares it? Do you have legal counsel opinion on the required separation of duties? • When does it happen? How many times? • Who maintains the records? • Do other agencies need to be notified of the results? • How do the results affect the Provider? • Are there penalties an incentives? What are the standards for required improvement for the Provider?

12. An Example • TxDOT began contracting for Right of Way Acquisition Professional Services (ROWAPS) in December of 2000. Various means and forms of evaluating the contracts and work authorization resulting in the publication of a procedural guide for evaluations in July, 2003. • Demand for these services continues to increase. Moving from 8 contracts in 2000 to 30 contracts in 2004. While the general scope of the services have not changed, various pilot programs have been implemented in an attempt to maximize production and efficiency while not altering the general scope of services. • .

13. The Challenges • The contracts are statewide with the potential of a Provider having multiple work authorizations around the State. • Annual requests for proposals means contracts could overlap. • The staff hours needed to manage the administration of the evaluations grew at rates un-proportionate to the ability of staff to perform in a timely manner. • Use of new and innovative pilot programs further complicated the evaluation process.

14. Meeting the Challenges • TxDOT is reviewing and revising existing written evaluation guidelines that employ an automatic email “tickler” to field offices that will be sent on a bi-weekly basis beginning 60 days out from the needed date of the evaluation. • TxDOT is developing an evaluation oversight team that will maintain consistency in evaluations while providing the needed separation of duties.

15. Remember, you can never be too prepared

16. Contact Gus Cannon Texas Department of Transportation Right of Way Division 118 East Riverside Drive Austin, TX 78704 Email: gcannon2@dot.state.tx.us