Improve your Service Acquisitions Execution Phase Execute the Strategy and Manage for Results

1. Improve your Service AcquisitionsExecution Phase Execute the Strategy and Manage for Results Lyle Eesley Director Center for Service Acquisition Defense Acquisition University

2. Service Acquisition Process

3. Overview To reach this point you�ve: Completed an extensive Planning phase Developed performance requirements that reflect mission requirements with clear performance objectives and measureable standards Developed an acquisition strategy designed to deliver long term performance results NOW you�re ready to: Execute the Strategy Manage Performance

4. Step Six � Execute Strategy

5. DODI 5000.2 - Table 9. Acquisition of Services Categories

6. (RFP) To Draft or not to Draft, that is the question? When is it beneficial to issue a draft RFP? When its highly desirable to get feedback from industry in order to improve the RFP Solicits industries input concerning the what the government is asking for and how they are asking for it Solicits feedback on the basis for the award decision Can save time in the long run by resolving issues early before you�ve entered the formal source selection process Disadvantages Takes time and resources

7. Conduct Due Diligence Method to ensure �meeting of minds� between government and industry on the requirement and business arrangement Open to all perspective offerors Held after release of RFP and prior to receipt of proposals Contracting Officer led teams during exchanges between industry and government 7

8. Discussions If Discussions are needed, make them meaningful Intent is to maximize Government�s ability to obtain �best value� based on RFP That does not mean getting everyone to �Green�

9. Make the Award Award based on best value to the government Considering evaluation factors in Section M Comply with Agency approval and notification requirements Debrief unsuccessful offerors Conduct post award conference Finalize QASP based on awarded contract 9

10. Transition to New Contract Performance Implement the transition plan Manage transition Communication with stakeholders during transition is extremely importance How will you handle in your communication plan? 10

11. Step Seven � Performance Management

12. 12 Crossed The Finish Line: Now What? Contract is in place! The right contractor has been selected Performance metrics have been finalized Performance baseline has been finalized Everyone takes a vacation The �baby� is starting to grow up What�s left to do? Continuous improvement requires continuous attention Attention should focus on the QASP Manage the Relationship

13. Manage PerformanceWhat�s Important about Step 7 Manage performance / transition from Acquisition to Supplier Management Keep the team together and add the contractor Assign accountability for managing contract performance Adjust your Communication Plan to include Contractor Evaluate effectiveness of strategy Use the QASP to Monitor performance What gets measured gets managed.What gets measured gets managed.

14. Reasons Contracts Fail 23% said because we didn�t know what to expect, either as clients or as providers 15% said because our interests diverged over time 13% said because we did not manage to the contract 11% said because we did not communicate well In total 62% of respondents cited factors related to SUPPLIER RELATIONSHIP MANAGEMENT as the primary cause of outsourcing failure IN CONTRAST � only 8% of respondents cited that outsourcing relationships failed because of supplier performance problems23% said because we didn�t know what to expect, either as clients or as providers 15% said because our interests diverged over time 13% said because we did not manage to the contract 11% said because we did not communicate well In total 62% of respondents cited factors related to SUPPLIER RELATIONSHIP MANAGEMENT as the primary cause of outsourcing failure IN CONTRAST � only 8% of respondents cited that outsourcing relationships failed because of supplier performance problems

15. Effectively Using the QASP Communication plays a vital role in assessing performance using the QASP Buyers and providers often manage as much or more by communication than just by measures and incentives Dynamic environment makes good communication the key to effective performance management / quality assessment Performance measures can be difficult to interpret without good communication

16. 16 After Contract Award shift to Performance Management Performance Management Now the contractor becomes part of our team Successful contract performance is the focus for both government and contractor Use remedies if necessary QASP describes How the team will work together How the team will treat data used to measure performance How the team identifies ways to improve efficiency and reduce risk How disputes will be resolved

17. 17 Performance Assessment Quality Assurance is the Contractor�s responsibility Contractor puts their quality control plan into action Must build Quality into the program Government should shift from oversight to insight Emphasis on partnering with the contractor Relying upon, but validate the contractor�s quality control plan Use contractor generated metrics to determine if performance standards are met Eliminate government QA personnel duplicating the contractor�s quality control program Limit inspections to validating the contractor�s metrics We want to go from the �blame game� to the �Change Game� -- Steve We want to go from the �blame game� to the �Change Game� -- Steve

18. Step 7: Getting Performance Management Right

19. Step 7: Getting Performance Management Right

20. Step 7: Getting Performance Management Right

22. Step 7: Getting Performance Management Right

24. Network Security

27. 27 Measure and Manage Performance Be fair and reasonable when things change Don�t expect the contractor to perform new requirements for free Make sure you have the whole picture before assessing poor performance responsibility Was the Government partly or wholly responsible Be �Proactive� rather than �Reactive� But keep in mind� Agencies must take care implementing this order of precedence. Be aware that a firm-fixed price contract is not the best solution for every requirement. �Force fitting� the contract type can actually result in much higher prices as suppliers seek to cover their risks. This view is upheld by FAR 16.103(b) which indicates, �A firm-fixed-price contract, which best utilizes the basic profit motive of business enterprise, shall be used when the risk involved is minimal or can be predicted with an acceptable degree of certainty. However, when a reasonable basis for firm pricing does not exist, other contract types should be considered, and negotiations should be directed toward selecting a contract type (or combination of types) that will appropriately tie profit to supplier performance.� At one end of the contractual spectrum is the firm-fixed-price contract, under which the supplier is fully responsible for performance costs and enjoys (or suffers) resulting profits (or losses). At the other end of the spectrum is the cost-plus-fixed-fee contract, in which allowable and allocable costs are reimbursed and the negotiated fee (profit) is fixed -- consequently, the supplier has minimal responsibility for, or incentive to control, performance costs. In between these extremes are various incentive contracts, including: Fixed-price incentive contracts (in which final contract price and profit are calculated based on a formula that relates final negotiated cost to target cost): these may be either firm target or successive targets. Fixed-price contracts with award fees (used to �motivate a supplier� when supplier performance cannot be measured objectively, making other incentives inappropriate). Cost-reimbursement incentive contracts (used when fixed-price contracts are inappropriate, due to uncertainty about probable costs): these may be either cost-plus-incentive-fee or cost-plus-award-fee.Agencies must take care implementing this order of precedence. Be aware that a firm-fixed price contract is not the best solution for every requirement. �Force fitting� the contract type can actually result in much higher prices as suppliers seek to cover their risks. This view is upheld by FAR 16.103(b) which indicates, �A firm-fixed-price contract, which best utilizes the basic profit motive of business enterprise, shall be used when the risk involved is minimal or can be predicted with an acceptable degree of certainty. However, when a reasonable basis for firm pricing does not exist, other contract types should be considered, and negotiations should be directed toward selecting a contract type (or combination of types) that will appropriately tie profit to supplier performance.� At one end of the contractual spectrum is the firm-fixed-price contract, under which the supplier is fully responsible for performance costs and enjoys (or suffers) resulting profits (or losses). At the other end of the spectrum is the cost-plus-fixed-fee contract, in which allowable and allocable costs are reimbursed and the negotiated fee (profit) is fixed -- consequently, the supplier has minimal responsibility for, or incentive to control, performance costs. In between these extremes are various incentive contracts, including: Fixed-price incentive contracts (in which final contract price and profit are calculated based on a formula that relates final negotiated cost to target cost): these may be either firm target or successive targets. Fixed-price contracts with award fees (used to �motivate a supplier� when supplier performance cannot be measured objectively, making other incentives inappropriate). Cost-reimbursement incentive contracts (used when fixed-price contracts are inappropriate, due to uncertainty about probable costs): these may be either cost-plus-incentive-fee or cost-plus-award-fee.

28. Manage the Process Analyze your strategies performance What does the data say? Change operating budgets to reflect efficiencies and savings or cost increases as realized The work will change over time Reevaluate current strategy for changes What should be changed given new learning? Regularly review performance with the multifunctional team Make it a point to communicate - listen Ask the right questions What is going right - why? What has the potential of going off track - and how do you avoid it? Get to the root cause!

29. When In Doubt: Communicate Dynamic environment makes good communication the key to effective performance management Performance measures can be difficult to interpret without good communication Communication is even more important when good measures are not available Communication Plan and QASP are vital Must have a plan Communication is not happenstance Can be either formal or informal Start preparing early for the follow on�.. Is the acquisition achieving its cost, schedule, and performance goals? Is the contractor meeting or exceeding the contract's performance-based requirements? How effective is the contractor's performance in meeting or contributing to the agency's program performance goals? Are there problems or issues that we can address to further mitigate risk? Is the acquisition achieving its cost, schedule, and performance goals? Is the contractor meeting or exceeding the contract's performance-based requirements? How effective is the contractor's performance in meeting or contributing to the agency's program performance goals? Are there problems or issues that we can address to further mitigate risk?

30. Service Acquisition Workshop - SAW

31. Service Acquisition Mall - SAM Integrates Acquisition Process and Learning assets with service type specific Knowledge Utilizes same sourcing process contained in SAW and ACQ 265 Roadmap Assistant Tool in development https://sam.dau.mil

32. ACQ 265 Mission Focused Services DAU Catalog course 4 Days in length Designed for cross functional participation Technical, contracting, CORs, PMs, etc Walk thru all elements of the seven step sourcing process Use local service acquisition project or USMC food service contract

33. Bottom Line DAU is committed to developing learning assets and tools to help the acquisition workforce design and implement effective service acquisition requirements and business strategies. How can we help you?