Taking PBA to the Next Level

1. Taking PBA to the Next Level

2. Taking PBA to the Next Level Stan Livingstone, PBA Practice Area Manager, Acquisition Solutions Inc. Bill Neustadt, Consultant, Acquisition Solutions Inc. Session #2, 12:35pm-1:00pm ET NCMA’s 1st Performance-Based Service Acquisition Community of Practice - Virtual Conference Wednesday, March 31, 2010 12:00pm - 4:00pm ET

3. Why Something New? • The concept of PBA not new – first attempt more than 30 years ago • Promoted by Congress and administrations for past two decades • Principles behind concept – focus on performance and results – are virtually indisputable • Regardless of emphasis applied, struggle with fully implementing practice and achieve intended benefits • Wide-spread lack of real success stories

4. PBA Defined • Federal Acquisition Regulation (FAR) defines as “an acquisition structured around the results to be achieved as opposed to the manner in which the work is to be performed” • Two required elements • Work stated in terms of outcomes or results rather than method of performance • Measurable performance standards and method of assessment • Recommended third element is use of performance incentives • Elements comprise “litmus” test

5. Examples of Successful PBAs • DOE Rocky Flats Cleanup • Completed year ahead of schedule and under budget • NOAA Advanced Weather Interactive Processing System (AWIPS) • Align contractors performance consistent with NWS mission • FBI National Data Exchange (N-DEx) • Competition of innovative ideas

6. Analysis • Examined what works well and what doesn’t with Seven Steps • Used data from: • “Front-line” government forum from 2006 • Practicitioner feedback • Retrospect's from each Step • Agency/client interviews from major engagements • Acquisition Advisory Panel recommendations • “Deep dive" into topical areas of concern such as: • Development of effective performance objectives/measures • Use of incentives • Follow through in contract administration

7. Analysis Results – Successful Elements • Project plan/team charter • Stakeholder buy-in • Senior leadership sponsorship and involvement • Comprehensive upfront training • Statement of Objectives • Market research/industry one-on-ones • Offeror due diligence • Focused selection criteria

8. Analysis Results – Impediments to Success • Lack of stakeholder socialization – causes failure with pre-award IPT and post award management • IPTs reflect parent organization’s toxic environment - serves as impediment instead of facilitator • Lack of strong champion; process discipline • Objectives not formulated at high level and with strategic linkage • Objectives for a multi-customer team not correlated into a comprehensive SOO or PWS • “Risk averse” culture gravitates towards use of prescriptive requirements • No just in time training – knowledge at the point of execution • Lack of meaningful/effective performance objectives/measures

9. Impediments con’t • Lack of disciplined incentive/disincentive application process • Confusion over what constitutes an incentive • Wrong things incentivized • “Weather helm” effect – revert to “business as usual” path after award; no PBA administration plan • Post-award - measures ignored, not agreed upon prior to award, or changed to less effective ones • Lack of performance monitoring and governance infrastructures • Lack of post-award implementation planning and socialization

10. Next Level: Major Features • Themes of Successful Acquisition Results • Accountability • Transparency • Competition • Performance Management • Three Phases • Socialization • Establishing the contractor performance relationship • Managing the contract for results

11. Draws upon Success of Seven Steps • Establish the team • Decide what problem needs solving • Examine private-sector and public-sector solutions • Develop a PWS or SOO • Decide how to measure and manage performance • Select the right contractor • Management performance http://acquisition.gov/SevenSteps

12. New Model Three Phases

13. Phase 1 – Socialization Identify accountable parties, establish vision, and prepare for acquisition success • Define project success and needed outcomes • Identify champion and other responsible parties • Ensure senior management understands and supports vision • Organize IPT for accountability including empowerment and incentivizes • Achieve clarity and consensus on objectives • Ensure a strategic linkage of objectives with agency/program mission • Recognize the culture and identify barriers • Get agency “ready” through “socialization” • Establish mutually supportive working relationships • Stakeholder involvement • Communication strategy • Facilitation support • Training/education • Transformation • Project plan/charter • IPT Management

14. Phase 2 – Establish Contractor Performance Relationship Leverage competition for solutions and sign structured agreement with selected source to deliver outcomes • Maximize marketplace innovation to obtain most advantageous competing solutions • Apply disciplined methodology so that right performance objectives, performance standards and metrics are structured (Government prepares metrics/QASP in RFX and offeror can either accept or propose alternatives that are negotiated before award) • Define processes to monitor and assess performance • Negotiate optimum business deal to achieve program success along with incentives linked with outcomes • Finalize agreement so performance, schedule and cost objectives are mutually understood and establish a teaming approach (agency/contractor partnership) for success

15. Phase 3 – Manage Contract for Results Post-award Performance management • Implement clear strategies for governance, risk management, and communications • Develop and implement contract administration plan, processes, and procedures • Establish a framework and platform to monitor performance and continuously identify areas for improvement (include contractor in this process) • Ensure proper infrastructure for success is in place • Develop managed relationship with contractor through strong collaborative interactions, mutual trust, and active leadership involvement • Establish sustainable and accountable partnership • Develop team agreement between government and contractor – protocol on how to work together

16. Acquisition Themes Integral and Dynamic Accountability, Transparency, Competition and Performance woven throughout • Integral part of each phase • Themes take on different perspective in each phase • Role of each varies and dynamic impact • Phases and themes overlap Seven Steps

17. Using New Model – First Steps • Prepare the agency for socialization • Ensure management is supportive and champion exists • Perform environmental audit to assess readiness and identify “toxic” elements and “get well” plan • Train team on PBA • Communicate constantly

18. Using New Model – First Steps con’t • Prepare individuals involved in source selection and negotiations to think/act differently • Develop acquisition specific evaluation process • Prepare to bargain with each offeror on each aspect of offer to ensure agency gets what it wants and needs • True performance relational type agreement is goal

19. Using New Model – First Steps con’t • Prepare for post-award management • Often involves cultural shift • Use of different tools, techniques, and disciplined approach • Team charter • Team agreement with contractor • QASP • Governance plan • Communications plan • Risk management plan • Performance plan

20. Taking PBA to Next Level Ready to Try it?