1. Enabling the Enterprise! Performance Based Contracting“ContractorPerspective” Presented to Department of Commerce Acquisition Conference Sytel Proprietary Information

2. Government • Select Government Team—Functional lead, contracting, and users • Determine real objectives—why do this • Determine the OUTPUT • Manage the effort--performance assessment—not detailed direction

3. Contractor • Partnership with Government • What to measure—linked to performance requirements • How to measure • What is the baseline of performance • What is an acceptable quality level (AQL) and how to measure it • Incentive alignment • Implementing best practices that fit • Execute, measure, report

4. Contractor Government Incentives CPAF—Fee Pool Monetary Incentive (Govt & Contractor) Award Term Share in savings

5. Measurement - - The Theory • Measurable • Achievable • Examples • Cycle Time • Defect Rate • Customer satisfaction • Cost per unit of output

6. What works • Government-Contractor partnership • Open dialogue during PWS development • Incremental approach • User involvement in developing Acceptable Quality Levels • Incentives linked to output • Willingness to evolve the incentive process • Trial Efforts

7. Cautions • FFP (Price) vs FFB (Budget) • Measurement • The right metrics • The right tools • Personnel supervision--contractor domain • Surveillance • Performance assessment-Govt • Quality assurance-contractor • Governance model—willingness of both sides to engage in candid dialogue • Incentive alignment • Evolve them • Continuous Improvement

8. Summary • It is “Hard Work” but it is “Not Difficult” • Partnership is the key • Incremental/evolutionary approach is best path to success • Attitude is important William J. Donahue (USAF Lt Gen Retired) Executive Vice President Federal Solutions Sytel Inc, 240-333-1181 wdonahue@sytel.com