Transcript Trends in Services Contracting Presented by: Ms. Themoula (Theme

NCMA Conference dated 14 March 2012
Trends in Services Contracting
According to:
Ms. Themoula (Theme) Poirier
Chief of Contracts, Enterprise Acquisition
Electronic Systems Center, ESC/CAA
1
Theme’s Disclaimer
• My presentation today is from my personal
point-of-view and it is not officially the AF’s
•CAUTION: The information contained in this briefing is for
information purposes only, and may not apply to your situation
• NOTHING stated in today’s meeting or throughout these charts
should be construed as Government Direction, Government
Commitment, Government obligation or Government Changes!!!
• ANY questions concerning your existing or future Government
solicitation (i.e. RFPs or RFQs or FOAs) or contract must be
handled through the appropriate Government channel/authority
(Example: Your PCO)
BEFORE I proceed, does anyone have any questions on the
above?
2
Overview
• Approaches to obtaining services:
– If its not broken then why change the way we do business?
– Types of Services and typical DoD problems in Services Acquisitions
– Framework of Acquisition of Services (the seven steps)
– Step 6 Execute Strategy and the “Why” in shifts in source selection
strategies for services
– LPTA Highlights
– Say What? Performance Based Acquisition?
– Putting it all together - Post award administration
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If it’s not broken then why change
the way we do business?
Theme’s Rationale:
•Current budget challenges support discrete decision making
•From a budget and acquisition standpoint, contract services are outpacing
hardware purchases Over 51% of the DoD budget is Acquisition of Services
•Dollars are declining, we must find more efficient approaches
•14 Sep 2010 USD(AT&L) memo -- The Department's practices for buying such
services are much less mature Dr Carter's Better-buying Power initiatives:
Improve Tradecraft in Services Acquisition
•Assist users of services to define requirements…
•Enhance competition by more frequent re-competes
•Limit the use of T&M and award fee contracts for services
•Contract services are essential to sustaining & maintaining AF mission
•Restoring affordability to defense goods & services—biggest “User”
complaint – it costs too much to get on contract
•Improvement in Services Acquisition will result in significant reductions in
cost at all levels across the Services & DOD organizations
More $ saved = More War-Fighter Capabilities fielded!
4
A Lot of $$ are spent on Services
DOD FY 09 Dollars Spent
DOD Service Categories Spend in Dollars
Construction
29
Facility
30
Transportation
OSD Service Contracts
• $212 Billion
• 57% of all
contracts in 09
• AF Share: >$34B
6
Medical
14
Electronics & Comm
19
Equipment Related
18
Knowledge Based Services
53
Research and Development
41
0
10
20
30
40
50
60
5
TYPES OF SERVICES
6
Typical Problems in DOD
Services Acquisitions
• Severe cases of “Cut-and-paste” requirements –
• Not analyzing what has changed from last requirement
• Lack of understanding of the key performance issues and stakeholder concerns
• Don’t understand difference between a performance objective and
a performance standard
• Task requirements with no performance standards -- confusion on
“How” to develop a PWS
• Overly specific “Personnel Qualifications” (Butts in Seats)
• Business strategy and type of contract decided in a vacuum before requirement
has been finalized
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7 steps to the service acquisition process to procure services
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Step 6 – Execute Strategy and the “Why” in shifts in source selection strategies for
Chart provided by ESC/AQ
services
Best Value Spectrum
Greater
Relative Importance of Cost or Price
Lesser
Lesser
Lowest Price
Technically Acceptable
(LPTA) Source
Selection Process
described in DoD Source
Selection Procedures,
Appendix A
Importance of Non-Cost Factors
Greater
Tradeoff Source Selection Process
described in DoD Source Selection Procedures
Oh! The possibilities!
Mix-n-match tradeoffs:
Cost or Price
Technical
Technical Risk
Past Performance
Cost or Price
Non–Cost Factors
• USAF Source Selections now mirror DoD: AFFARs aligned w/new DoD Procedures & Competitive FAR 15 acq over $150k
• Goal: Consistent policy across DoD: DFARs 215.300 PGI (Procedures, Guidance & Info) 04 Mar 11 Memo & SAF/AQC 08
May 11 Policy Memo
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LPTA Highlights
Chart provided by ESC/AQ
•Lowest Price Technically Acceptable
(LPTA) Source Selection (see FAR 15.101-2)
Lowest Price Technically Acceptable (LPTA) is a process used in competitive negotiated
contracting where the best value is expected to result from selection of the technically
acceptable proposal with the lowest evaluated price. See FAR 15.101-2.
• Used for acquisition of commercial or non-complex services or supplies which are
clearly defined and expected to be low risk
• Shall evaluate cost/price and acceptability of the product or services (consideration of
one or more non-price evaluation factors/subfactors)
– Defined ratings for acceptable/unacceptable required for use
• Past Performance shall be used as evaluation factor unless waived by PCO
– Rated on acceptable/unacceptable basis – ratings defined
• Small Business participation is exempted from evaluation
– If determined an appropriate evaluation factor, should be considered one of the
“technical” factors/subfactors
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EXAMPLES OF LPTA EVALUATION CRITERIA
EXAMPLE OF RECENTLY AWARDED AF A&AS CONTRACTS UTILIZING LPTAs:
• Air Combat Command (ACC) Acquisition Management and Integration Center - Contracted Advisory and
Assistance Services (CAAS) IV--LPTA Evaluation Criteria:
- FACTOR 1: Technical acceptability with subfactors: Subfactor 1: Program Management (organizational
structure; human resources; quality control plan); Subfactor 2: Organizational conflict of interest plan; Subfactor 3:
Security; Subfactor 4: OCONUS Support and Subfactor 5: Small business Subcontracting Plan (for Large primes
business only)
- FACTOR 2 – Past Performance
- FACTOR 3 – Cost/Price
• ASC - Aeronautical Systems Center (ASC) - Acquisition of Consolidated Enterprise Support Services
(ACCESS) – LPTA Evaluation Criteria:
- FACTOR 1: Technical Acceptability with subfactors: Subfactor 1: Program Management and Subfactor 2:
Organizational Conflict of Interest Mitigation
- FACTOR 2: Price Evaluation Factor
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Say What?
Performance Based Acquisition?
Who do you think he looks like?
Involves acquisition strategies, methods, and techniques that describe and communicate
measurable outcomes rather than direct performance processes. It is structured around
defining a service requirement in terms of performance objectives and providing
contractors the latitude to determine how to meet those objectives (via Performance
Work Statements (PWS))
Simply put, it is a method for acquiring what is required and placing the responsibility for
how it is accomplished on the contractor
Objectives of PBAS
* Maximize performance
* Maximize competition and innovation
* Encourage and promote the use of commercial services
* Shift in risk
* Achieve savings
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Example: Good Transportation Metrics
Based on All metrics being within Standard
•
Transportation Sub Processes
–
–
–
–
–
–
–
–
10
9
8
7
6
5
4
3
2
1
0
Metric 27: Air Crew Taxi Response
Time (Minutes)
On-Base Taxi Response
DV In Place
Off-Base Taxi Response
Air Crew Taxi
Supply Delivery Time
Vehicle In Commission
Vehicle In Commission (Detail)
Overdue Scheduled Maintenance
10.00
Standard = 10 Min
Minutes
FY07
5.00
FY08
0.00
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
Metric 29: Vehicle In Commission Rate
Metric 30: Overdue Scheduled
Maintenance
(Vehicles)
100
Percent
95
Standard = 1 or less
90
85
FY07
00
00
00
00
00
00
00
00
00
FY08
00
00
80
Standard = 90 %
FY07
FY08
00
75
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
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How Government evaluates contractor’s performance:
Quality Assurance Surveillance Plan (QASP)
(formerly called the Performance Plan)
• The Government’s systematic method to evaluate the services the
contractor is required to perform
• The Government has an obligation to actively manage performance after
the supplier is selected
– Government’s job doesn’t stop at contract award
– QASP cites the same performance objectives (contract expectation)
and performance thresholds (how it is measured) identified in the
PWS, and specifies the method of surveillance
– Ensures the government receives acceptable contractor performance
against contractual requirements
– Contractor is responsible for quality control, not the government
– Minimum surveillance of the contractor is required to ensure
contractual compliance
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Putting it all together - Post award administration
Performance Management - It’s More than “Watching” the Supplier
Effective Supplier Relationship Management
THE NOT TO’S
• Getting the supplier
to meet our needs
• “It’s in the contract,
now it’s the
supplier’s problem.”
• Blame and punish
the supplier
• Unpleasant surprises
THE HOW TO’S
BECOMES
BECOMES
BECOMES
BECOMES
• Finding a way to meet
both our needs
• Work together to
achieve the
performance and
compensation goals
• Communicate the
issues, jointly find
solutions
• Integrated planning and
communications
Are All of the Supplier’s Team Are On Board?
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Step Seven – Performance Management
• Contract surveillance
• Prime responsibility of Contracting Officer Representative (COR) is surveillance
•Government COR is assigned and trained IAW AFFARS MP 5346.602-2(d)
• Method of surveillance in the QASP dictates how the COR will evaluate the
contractor’s performance
• Establish a Performance Management Team that includes the contractor
• Use the Quality Assurance Surveillance Plan (QASP) to ensure that
performance objectives are being met
• Track performance trends and results
• Determine if stakeholder needs are being met
• Develop a change management strategy
• Communicate performance results to stakeholders and customers
• Start planning for replacement contract when appropriate
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Performance Plan (QASP)
Elements of Performance Plan
Requirements Roadmap Worksheet
Performance
Objective
Expectation
Threshold
Measurement
Incentive
PWS Plus or Minus Who
COR
Paragraph
Inspection
Frequency
Method/Data
Source (Customer
Surveys)
Alignment
A -1
A -2
A -3
A -3 a
A -3 b
B -1
B -2
Plan
Action
Results
Will measured Results be traceable back to the Objectives?
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ANY QUESTIONS????
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