Julia Wise, Office of Federal Procurement Policy

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(No Transcript)
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IMPLEMENTING PERFORMANCE-BASED ACQUISITION FOR
SERVICES
Julia Wise, Office of Federal Procurement
Policy Lyle Eesley, Defense Acquisition
University Phil Salmeri, President of Salmeri
Seminars Date November 8, 2007 Time 210 to
310
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OFPPs View on PBA

• Success Story Agencies continue to increase
  their use of Performance-Based Acquisition (PBA)
  methods.
• Target FY 2001 - 10 FY 2006 40
• Actual FY 2001 26 FY 2006 45
• OFPP is
• Encouraging agencies to continue to appropriately
  use PBA methods.
• Working with agencies to obtain good PBA samples
  to share all samples should be submitted to
  www.acquisition.gov.sevensteps.
• Enhance existing PBA Guidance, as necessary, to
  address problem areas.
• Providing on-site PBA lunch-time learning
  sessions for agency acquisition professionals.

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OFPP Interagency PBA Working Group Tasks SARA
Panels Recommendations

• Develop an illustrative guide or decision tree to
  help agencies determine when to use PBA
• Develop a performance incentive matrix
• Develop a Best Practices Guide on Performance
  Measures
• Develop a checklist that reflects how well an
  acquisition works within the Seven Steps process
  and
• Review and evaluate PBA samples and examples to
  incorporate in the Seven Steps to PBA Guide.
• Agency senior management should
• Emphasize the use of PBA on eligible service
  acquisitions to obtain innovative solutions
  (FASA).
• Align acquisition objectives with agency
  objectives to achieve results. (GPRA)
• Ensure PBA and FAR Part 12 are used when certain
  conditions exist (SARA).

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PBA is

• An acquisition strategy used to structure all
  aspects of an acquisition
• around the purpose of the work to be performed as
  opposed to the
• manner in which it will be performed.
• The Government states The What
• The Contractor states The How
• PBA is used to obtain innovative solutions from
  industry to measure
• acceptable performance, and monitor performance
  to ensure the
• outcome is achieved.

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PBA should be

• Used to the maximum extent practicable on
  eligible services except on
• AE, Construction, Utility services, Services
  incidental to supplies.
• Additional exclusions in the OFPP September 7,
  2004 memo
• - RD to include Basic and Applied Research,
  Advanced Technology Development, Demonstration
  and Validation, and Engineering and Manufacturing
  Development
• - Professional Medical Services (not
  facility-related) and
• - Tuition, Registration, and Membership Fees.
• Note Only 50 of the overall contract dollar
  value has to be devoted to PBA.

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PBA Elements

• (1) Performance Work Statement (PWS) or
  Statement of Objectives (SOO)
• Measurable Performance Standards
• Performance Incentives
• - Negative or Positive
• - Monetary or Non-monetary
• 37.604  Quality assurance surveillance plans -
  Requirements for quality
• assurance and quality assurance surveillance
  plans are in Subpart 46.4. The
• Government may either prepare the quality
  assurance surveillance plan or require
• the offerors to submit a proposed quality
  assurance surveillance plan for the
• Governments consideration in development of the
  Governments plan.

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PBA Team Players

• PBA involves the entire acquisition team -FAR
  Part 1.102-3.

End-user
Technical Community COTR
Program Manager COR
Industry
Quality Assurance
Roles/Responsibilities
Legal
Business/ finance
Contracting Officer
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PBA Benefits

• Allows innovative solutions from industry to meet
  agency mission
• Maximizes competition in terms of solution and
  price
• Increases customer satisfaction
• Encourages the contractor and the agency to focus
  on achieving the mission via a partnership
• Improves the Contractors performance
• Encourages frequent communication between the
  CO/COR/COTR and the contractor and
• Ensures results are achieved with good contract
  management.
• After award, its we and us!

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PBA FAR References

• FAR 1.102, Statement of Guiding Principles
  highlights PM role
• FAR Part 2, Definition - new definitions
• FAR Part 7 Acquisition Planning
• FAR Part 10, Market Research
• FAR Part 11, Describing Agency Requirements
• FAR Part 16, Types of Contracts
• FAR Part 37, Service Contracting recognizes use
  of SOO when PWS is not suitable
• FAR Part 46, Quality Assurance

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Government-wide PBA Resource

• Seven Steps to PBSA website www.acquisition.gov
  -go to the library to see vetted samples

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PBA Training Requirements

• All agency personnel are encouraged to complete a
  PBA training course
• FAC-PM certification (OFPP April 25, 2007
  memorandum) See http//www.whitehouse.gov/omb/proc
  urement/workforce/ fed_acq_cert_042507.pdf.
• Agency acquisition workforce policy may include
  these PBA training requirements at the
  appropriate level for all members of the
  acquisition workforce.

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FAI PBA Training Opportunities

• FREE three-day workshop on PBA ? just-in-time
  solution for acquisition teams from various
  agencies.
• Participants are encouraged to bring their
  current PBA documents and are given a chance to
  refine these documents in the training class.
• FREE training at various locations around the
  country. Students should register online at
  www.fai.gov.
• Questions about this training should be directed
  to FAI student services at 703-805-2300.

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DAU PBA Training Resources

• Mission Focused Service Acquisitions, course
  no. ACQ265, and two online learning modules CLC
  013, Performance-Based Services Acquisitions and
  CLM 013, Work Breakdown Structure
• PBA Community of Practice (https//acc.dau.mil/pba
  ), includes the above PBA training information as
  well as other training opportunities, policy and
  guidance, tools and related links.
• The Acquisition Center of Excellence for Services
  Community of Practice, at https//acc.dau.mil/ace.
  
• Additionally, many private sector firms offer PBA
  training. See http//acquisition.gov/SevenSteps.
  DAU also has BPAs with 4 firms for PBA training.

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PBA a way forward
Lyle Eesley, Director, Learning Center of
Excellence for Service Acquisition Defense
Acquisition University Lyle.Eesley_at_dau.mil Date
8 Nov 2007 Time 1410
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Why isnt PBA catching on.?

• Lack of Up Front Investment
• Tactical Acquisition primary focus
• Requires Strategic Business Planning
• Where is Contracting during the critical
  requirements planning process?
• Were busy come back later

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• You got to be very careful if you don't know
  where you're going, because you might not get
  there.
• - Yogi Berra

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PBA is about communicating the Art of the
possible and the need for change

• Develop the Vision and the case for change
• Leadership commitment and support
• Communicate the Vision
• Overcoming the resistance to change
• Build teams capable of exploring alternatives
• Understand the Mission improvement opportunities
• Create execution strategies
• Develop in depth understanding of the Mission
  Objective and Market Place.

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Performance Paradox
How Trust affects Mission Results?
Mission Results
Mission Results
Open to Industry Input
Government Control
More Trust Less
But Verify
Specs Gov defined process SOW Compliance
focus Increased Oversight
Performance Standards and Outcomes PWS or SOO
Industry created value thru
innovation Reduced Oversight
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Performance Paradox
How Trust affects Mission Results?
Mission Results
Mission Results
Government Concerns Mission commitment Nature
of the requirement Jobs, Change
Open to Industry Input
Government Control
More Trust Less
But Verify
Specs Gov defined process SOW Compliance
Increased Oversight
Performance Standards and Outcomes SOO or
PWS Industry created value thru
innovation Reduced Oversight
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Performance Paradox
How Trust affects Mission Results?
Mission Results
Mission Results
Government Concerns Mission commitment Nature
of the requirement Jobs, Change
Open to Industry Input
Government Control
More Trust Less
But Verify
Specs Gov defined process SOW Compliance
Increased Oversight
Performance Standards and Outcomes SOO or
PWS Industry created value thru
innovation Reduced Oversight
Contractor Concerns Whats been left out
Whos carrying the risk Is this another price
shoot out or are they looking for value
Are they good partners
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Performance Paradox
How Trust affects Mission Results?
Mission Results
Mission Results
Government Concerns Mission commitment Nature
of the requirement Jobs, Change
Trust Dividend Increases Mission Results
Trust Tax Decreases Mission Results
Open to Industry Input
Government Control
More Trust Less
But Verify
Specs Gov defined process SOW Compliance
Increased Oversight
Performance Standards and Outcomes SOO or
PWS Industry created value thru
innovation Reduced Oversight
Contractor Concerns Whats been left out
Whos carrying the risk Is this another price
shoot out or are they looking for value
Are they good partners
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AQC 265 Mission Focused Services

• 4 Day classroom course for requirements and
  contracting communities
• Start with old SOW and develop new PWS or SOO
• Teams develop sections of requirements document
• Develop performance standards and AQL
• Performance Requirements Summary and QASP
• Develop Business strategy with proposed contract
  type and incentive arrangement if warranted
• Develop Section L and M of RFP

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PBA requires linking Mission Objective with
results to be achieved
Objective
Result 1
Standard 1
Standard 2
I know whats importantthe results that satisfy
my objective!
Result 2
Standard 1
Standard 2

Standard n
Source Performance-Based Service Acquisition
Measure What You Manage by Booz Allen and Hamilton
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Focus On The Results Achieved

• In a result-driven strategy, the right measures
  are those that focus on the results achieved,
  rather than the processes used. For example

• Approach 1The Trivial Many
• Software lines of code written, per developer,
  per day (coding efficiency)
• number of software coding errors per 1000 lines
  of code (coding error rate)
• mix of senior and junior developers
• percent of development time required for
  documentation
• hours required to implement each requirement
• number of software defect reports from end-users

• Approach 2The Critical Few
• schedule performance
• percent of time required for re-work
• number of software defect reports from end users

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PBA requires linking Mission Objective with
results to be achieved
Objective
Result 1
Standard 1
Measurement Method
Standard 2
Measurement Method
I know whats importantthe results that satisfy
my objective!
Result 2
Measurement Method
Standard 1
Measurement Method
Standard 2

Measurement Method
Standard n
Source Performance-Based Service Acquisition
Measure What You Manage by Booz Allen and Hamilton
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DAU - Learning Center Of Excellence for Service
Acquisition

• Knowledge Sharing
• Market Intelligence driving Best Service
  Acquisition Practices and Principles in Industry
  and Government
• Learning assets focused on Service Acquisition
• Service Acquisition Workshops (SAW)
• Team Building and Communication
• Developing performance outcomes and metrics
• Acquisition and Source Selection
• Learning and job support assets
• Service Acquisition Mall
• Performance Support
• SAW focused on specific requirement and
  acquisition team

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Market Intel Commercial Practices Research

• On going joint University of Tennessee and DAU
  effort
• Interview over a dozen companies
• Focused on three areas
• Maintenance and Equipment Repair
• Real Property Maintenance
• Advisory and Assistance Services
• Will result in SAW workshop and commercial
  practices data

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Service Acquisition Mall
Product Service CodesA - Research and
DevelopmentB - Special Studies and Analyses -
Not RDC - Architect and Engineering -
ConstructionD - Automatic Data Processing and
TelecommunicationE - Purchase of Structures and
FacilitiesF - Natural Resources and
ConservationG - Social ServicesH - Quality
Control, Testing, and InspectionJ - Maintenance,
Repair, and Rebuilding of EquipmentK -
Modification of EquipmentL - Technical
RepresentativeM - Operation of Government Owned
FacilitiesN - Installation of EquipmentP -
Salvage ServicesQ - Medical ServicesR -
Professional, Administrative and Management
SupportS - Utilities and Housekeeping ServicesT
- Photographic, Mapping, Printing, and
PublicationsU - Education and TrainingV -
Transportation, Travel and RelocationW - Lease
or Rental of EquipmentX - Lease or Rental of
FacilitiesY - Construction of Structures and
FacilitiesZ - Maintenance, Repair or Alteration
of Real Property
Team or Individual selects the specific Product
Service Code (PSC) for their requirement
PSC Code
Decide how to measure and manage performance
Develop PWS or SOO
Select Right Contractor
Form the Team
Define the Problem
Market Intelligence
Manage Performance
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Using Seven Steps to PBSA as guide Learning
assets and Knowledge specific to that PSC are
provided to Team or individual. Using Aircraft
Maintenance as an example J015
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Service Acquisition Mall
PSC Code
J015 Maintenance-Repair of aircraft
Decide how to measure and manage performance
Select Right Contractor
Develop PWS or SOO
Form the Team
Define the Problem
Market Intelligence
Manage Performance
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Learning Assets CLMs Effective Team
Building Project Mgt for Service Acq Seven
Step Process
Policy Issues
Samples/Examples Team Charter
First Person Accounts
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Service Acquisition Mall
PSC Code
J015 Maintenance-Repair of aircraft
Decide how to measure and manage performance
Select Right Contractor
Develop PWS or SOO
Form the Team
Define the Problem
Market Intelligence
Manage Performance
Step 3
Step 1
Step 2
Step 4
Step 5
Step 6
Step 7
Learning Assets CLMs Market research
Current Market Intel for JO15 Commercial
Government
Common Performance Measures Commercial Governme
nt
First Person Accounts
Sourcing Options AF Contracts Army
Contracts Navy Contracts
Professional Associations
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Service Acquisition Mall
PSC Code
J015 Maintenance-Repair of aircraft
Decide how to measure and manage performance
Select Right Contractor
Develop PWS or SOO
Form the Team
Define the Problem
Market Intelligence
Manage Performance
Step 4
Step 1
Step 2
Step 3
Step 5
Step 6
Step 7
JO15 Performance Outcomes Samples/
Examples Army Navy Air Force NASA Coast Guard
Training When do I use PWS or SOO? Answer these
questions
JO15 PWS Samples/ Examples Army Navy Air
Force NASA Coast Guard
First Person Accounts
JO15 SOO Samples/ Examples Army Navy Air
Force NASA Coast Guard
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Questions and Answers