Effective Contract Management
Planning
For Performance-Based
Contracting
It’s a Different Contracting World!
 Performance-Based Acquisition
fundamentally changed contract formation
and administration
 Objectives structured into contracts and
multiple incentive arrangements
 Contractors and Federal staff adjusting to a
cultural change
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When does Contract Management
start?
 Old View
– Started at contract award
– Embodied a post-award orientation
 New View
– Effective contract administration starts early with
contract management planning
– Begins during the acquisition planning phase
– Recognizes the performance-based elements of
the contract
– The Contract Management Plan is in place
before or shortly after the time of award
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The Performance-Based Contract
What are the elements of Performance-Based
Contracting?
Government Protocols Require:
Establish requirements in a results oriented manner
Ensure that Contract measures and expectations are
measurable and correspond to work requirements
Ensure that Quality Assurance Surveillance Plans are tailored to
contract objectives
Incorporate cost constraints or cost incentives
Acquisition Guide
 Performance Based Contracting Guides – provides
guidance on structuring effective incentives
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The Performance-Based Contract
What are the elements of Performance-Based
Contracting? (cont.)
In 1997 Rules mandated that PBCs
 Requirements are structured in a results or outcome
oriented manner
 Positive and/or negative incentives are included
 Quality Assurance Surveillance Plans are required
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What are the Contracting Officers
Responsibilities in Performance-Based
Contracting?
 Other Contracting Rules Require:
– Ensure that performance-based contracting used to the
maximum extent practicable.
– Use contract types that best fits the work and likely to
motivate contractors.
– Use positive or negative performance incentives to the
maximum extent practicable.
– Quality assurance surveillance plan shall contain
measurable inspection and acceptance criteria
corresponding to the performance standards of the
SOW.
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Get Results!
Results
 Identify incentives that support program and site
priorities
 Project specific
 Integrated efforts (intra-site or inter-site)
 Technology Development
 Infrastructure/Facilities Maintenance
 Contractor Motivation (fee, more work, Peer
recognition, past performance assessments)
 Incentivize Results! Review lessons learned!
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Contract Management at
Governement Entities
Contract Management
 Government Agencies major site and facility
contracts are usually long-term and involve a
complex mix of sponsors and stakeholders
 Integrated Team Members
Government Contract Management
Focus Areas
 Project Management, change control, baseline
management, technology, performance, quality
assurance, fee and incentive management,
contractor human resources, etc.
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Key Contract Management
Responsibilities and Focus Areas
Contract Management Responsibilities
 Ensuring performance of all necessary actions for

effective contracting
Ensuring compliance with the terms of the contract,
 Safeguarding the interests of the contractual
relationships,
 Requesting and considering advice of specialists in
audit, law, engineering, and other fields, as appropriate,
 Monitoring Performance, and
 Enforcing the Government’s rights when necessary.
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The Contract Management Team
Success Depends on an Integrated Team!
 Contracting Officer (CO), Project Director, etc.
 Effective administration of PBCs relies heavily on the

integration efforts of groups of people representing
many functional areas, customers, and stakeholders
Past problems can be traced to lack of an integrated
effort in managing contract performance
Manage the contract not the people or the
process
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Key Tools of Contract
Management
 Quality Assurance Surveillance Plan
 Contract Management Planning
 Earned Value Management
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Ensuring the Quality of Performance
QASP
 Develop early - during the early stages of the RFP




(SOW)
Tool to evaluate contractor’s performance
Provides a structured approach to performing quality
inspections and surveillance
Establishes frequency and types of inspections
Focuses on results - quality and timeliness
QASP linked with Performance Evaluation
Management Plans (PEMPs)
 PEMPs establish the performance evaluation process

and fee determination process
PEMPs may be used to fulfill QASP requirement
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Contract Management Planning
Why Plan for Contract Management?
 Challenges by GAO, IG and internal DOE reviews
 More sophisticated contracting models
 Performance-based contracting
 More rigorous contract types, i.e. CPIF
 DOE Contract Administration Study
 Little interface between all parties managing the contract
 Infrastructure/culture not keeping pace with PBCs
 Lack of “game plan” for managing contracts
 To develop a “corporate oversight strategy” for ensuring
contract success
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Contract Management Planning
When is a Contract Management Plan (CMP)
Required?
 For all M&O & Major Site and Facility Contracts
 Contracts subject to Government Regulation
 Desirable for service contracts that are complex., high
risk with a high $$ value
How do we develop an effective corporate
oversight strategy/CMP?
 Begin planning during the earliest stages of the RFP

preparation
Review the contract and identify key governmental
responsibilities (equipment, receiverships, etc.)
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Contract Management Planning
How do we develop an effective corporate
oversight strategy/CMP? (cont.)
 Get input from the contractor to ensure critical areas are




identified
Identify key contract vulnerabilities or performance risk
areas that are inherent in the contract
Develop a strategy for managing unique terms and
conditions (award term, incentives, etc.)
Develop a proactive approach for managing the
governmental responsibilities and for mitigating any
identified risk areas
Formally identify the key contract management team,
include their names, responsibilities, authorities and
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limitations
Contract Management Planning
How do we develop an effective corporate
oversight strategy/CMP? (cont.)
 Develop training and guidance to help the culture


(infrastructure/people) evolve if site is managing a new
contract type (CPIF),
Develop an approach for managing the incentive fee
arrangements of the contract, and
Ensure that other critical focus areas are included management of contractor litigation, partnering
agreements, records management, and other site
specific challenges.
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Contract Management Planning
How can we use the CMP to ensure successful
contract performance?
 Coordinate and solicit input from all staff involved in





contract management
Conduct a special session with the contractor on the
goals and objectives of the CMP and name the
individuals (CO, COR, TM, etc.) responsible for its
implementation
Meet with all concerned parties on a regular basis to
address issues
Track performance and assess progress against the
QASP
Address performance risks or deficiencies early
Update the CMP as necessary
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Assessing Contractor Performance
Earned Value Management
 Contractor use EVM to control cost and schedule

performance as well as report progress against the
contract
DOE uses EVM to:
 Monitor and verify progress on contract costs and schedule
performance
 Monitor and validate contractor accomplishments on specific fee
and PBI incentives
 Early warning system to identify deficient progress
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Contract Management Planning
What is the CO - Contracting Officer’s role in
EVM?
 The CO is responsible for ensuring that EVM is a



requirement in the RFP (when applicable)
After award, the CO is responsible for receiving the
contract performance reports, approving changes to the
system, and generally ensuring that the system
requirements are being met
The CO relies on subject matter experts for advice on
the integrity of the system
The CO is responsible for enforcing the terms of the
contract and requesting corrective action as necessary
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Thanks and Kindest Regards, AAPM
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