a short course in pba and proper pws formatting

A Short Course in Performance Based Acquisition & The Proper use of PWS

Formatting for Beginners

By Robert Knauer, CPCM CPPOThe Acquisition Institute, Inc.

Copyright 2013

copyrighted material 2013 by TAI Inc.

IntroductionAt the end of this course you will be able to:

•Understand Basic concepts of Performance Based Acquisition (PBA)•Understand why formatting is so important for a Performance Work Statement (PWS)•How to properly format a PWS•What the contents are in all seven sections of a PWS and why you don’t want to leave anything out•Finally -what a PWS can do for your agency


Basic PBA Components include:Basic PBA Components include:

1.Performance Work Statement (PWS)

2.Statement of Objectives (SOO)

3.Quality Assurance Surveillance Plan (QASP),

4.Service Level Agreement (SLA)

5.Both 3 and 4 above

6.Use of correct Performance-Based Metrics,

7.Contractual incentives (positive and/or negative), and

8.The right pricing arrangement (contract type).


Benefits of Performance Based Contracting – Increased likelihood of meeting mission– Focus on intended results-not process– Better value and performance– Less performance risk– No more detailed specifications are required– Contractor flexibility with solutions– Better competition, not just more vendors but solutions!– contractor buy-in and shared interests– Fewer protests– Surveillance is more meaningful and less frequent– Many solutions from which to chose…


Performance Work Statement (PWS)Performance Work Statement (PWS)Federal Acquisition Regulations (37.605) say agencies shall, to the maximum extent practicable –

(1) Describe the work in terms of the required results rather than either “how” the work is to be accomplished or the number of hours to be provided;(2) Enable assessment of work performance against measurable performance standards;(3) Rely on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.


Should I use a PWS or SOO?

• Performance Work Statement (PWS)–Complete Statement of Outputs with Performance Metrics–Assumes Government has the ability to create the PWS–Review the “Guide to Developing a PWS & QASP for service contracts” by Robert Knauer

• Statement of Objectives (SOO)–Emerging method that permits contractors to do for the Government what it cannot for itself- “write a PWS”–Topical in nature-should not be detailed like a PWS–Contents: (1) Purpose; (2) Scope; (3) Period and place of performance; (4) Background; (5) Performance objectives; and (6) Performance rating constraints

•Refer to FAR 37.602copyrighted material 2013 by TAI Inc.

WHAT DOES A PWS REALLY DO?

•Maximizes Accountability on the KTR•Better Defines the Risks for All Parties•Provides Greater Flexibility•Promotes Productivity and Innovation•Facilitates Contract Administration•Spells out performance outputs to be measured for success rather than steps


Why is Government issuing SOO’s?

–Lack of Government resources–Reliance on contractors to develop PWS, QASP and other products–Government gets to select best value–Government ends up with a better contract


A Quality Assurance Surveillance Plans A Quality Assurance Surveillance Plans (QASP) contain:(QASP) contain:

• A statement of the plan’s purpose;

• The names of the technical representative;

• The specific authority and responsibilities of the COR;

• Instructions on how to use the plan;

• A surveillance schedule;

• The surveillance methods that will be used;

• The performance requirements summary (PRS)

• Sampling guides for each task to be sampled; and

• Deduction and incentive formulas as appropriate.copyrighted material 2013 by TAI

Inc.

Every Service Contract should have one because:• It is contractually binding on both parties • It becomes part of the binding contract.• It includes not just the Government’s Quality

Assurance expectations on deliverables, but the contractor’s QC processes and expectations. It helps to bring about greater performance through a more collaborative process built on mutual respect and understanding “corrective work actions” when needed, and continued performance improvement throughout the life of the contract.

• There is something in it for both sides!!

Service Level Agreement (SLA)Service Level Agreement (SLA)


Work together to develop an appropriate Performance Work Statement (PWS) or Statement of Objectives (SOO) and be creative

Jointly develop an appropriate Quality Assurance Surveillance Plan (QASP) or Service Level Agreement (SLA)

Jointly develop appropriate performance-based measures, metrics, key performance indicators, and incentives to apply

Make incentives challenging yet attainable by the vendorNegotiate a fair and reasonable pricing arrangement to achieve high-

performance resultsIdentify any and all constraintsDevelop a surveillance schedule for either the QASP or SLAReview and agree on success determinantsSelect only a few meaningful measures on which to judge success

Best Practices in Performance-Based Contracting


Next we’ll discuss:Next we’ll discuss:

The Seven Steps to becoming performance based The Seven Steps to becoming performance based using a standardized PWS formatusing a standardized PWS format


“The Seven Steps”1. Establish an integrated solutions team (IST)2. Describe the problem that needs solving 3. Examine private and public-sector solutions4. Develop a Performance Work Statement (PWS) or a Statement of Objectives (SOO)5. Decide how to measure & manage performance6. Select the right contractor7. Managing performance


1. Establish an integrated solutions team (IST)

Performance-based acquisition is a collective responsibility that involves

experts from budget, technical, contracting, logistics, legal, the program

office, etc….


2. Describe the problem needing solving

The Team must determine...What is the problem the agency needs to solve?

What do I need?When do I need it?Where do I need it?

What minimum Capability?What minimum quality?


You must Baseline Current Performance

Determining the current level of performance or operations against which future performance will

be measured.

Creates a valid measure of comparison

2. Describe the problem needing solving


3. Acquisition Planning

Market research is the process of collectinginformation on the commercial marketplace; its capabilities, technologies, and competitive forces.

Market research is essential to the government's ability to buy best-value products and services thatsolve mission-critical problems.

Market research is easy to do with links to catalogs, vendor websites, GOOGLE, etc…


• Update Past Market Research by others• Review Similar Market Research Reports on File • Issue Surveys and Questionnaires (Sources Sought & RFI) • Conduct Site Visits• Perform Internet Searches (using Google or Bing)• Host Industry Days• Contact Small Business/Source Development Office• Review Trade Journals• Contact Professional Societies• Attend Trade Shows• Cold Calling (Yellow Pages)• Contact Professional Contacts

3. Acquisition Planning


4. Develop a PWS or SOO

There are two ways to develop a specification for a performance-based acquisition. You can either use a-

• Performance Work Statement (PWS) or a…• Statement of Objective (SOO).


PWS is a document that states the technical, functional and performance characteristics of the work to be performed or delivered, it…

• Identifies essential functions to be performed (outputs)• Performance standards (quality standards)• Key performance indicators (KPI)• Identifies the location of the work, the units of work, the

quantity of work units, and the quality and timeliness of the work units.



• Developing the PWS begins with collecting and gathering lots of data that defines the present operation.

• Sources of data can include information management systems (MIS), cost accounting data, current and projected workload estimates, files, log books, customer records and internal or external interviews with managers and subject matter experts (SME)

• The process is more difficult that most realize, but it doesn’t have to be when working with a team.

• Review the Guidebook by Robert Knauer entitled, “A guide to PWS and QASP Development” available at www.AcquisitionInstitute.com



http://www.acquisitioninstitute.com/

You must create at “Work Breakdown Structure” for a PWS is often found in the agency, department, branch or division’s mission statement



Creating and using a WBS will help you create a PWS that should focus on defining desired results (Outputs) and acceptable levels (AQLs) for all the major top-level tasks listed in your contract (CWBS)



RFP’s are used to solicit contractor proposals that will tell how they propose to accomplish work (the outputs) requested

in the PWS that will meet your agency minimum standards…

How to propose is up to contractors



Now, the FAR only says to:■ Describe requirements in terms of results or

outputs, rather than processes used.■ Use measurable performance standards and

quality assurance surveillance plans to measure performance results.

■ Provide for reductions of fees or price for failed performance, and...

■ Include performance incentives as appropriate, therefore much can be overcome by using an SLA.



• A Solicitation/Contract Form• B. Supplies/Services and

Prices/Costs• C. SOW/Specifications• D. Packaging and Marking• E. Inspection and Acceptance• F. Deliverables or

Performance• G. Contract Administration

Data

• H. Special Contract Requirements

• I. Contract Clauses• J. List of Attachments• K. Representations and

certifications• L. Instructions to

Offerors/Bidders• M. Evaluation Factors For

Award

Uniform Contract Format covers what’s in the RFP


Best Practice has resulted in adopting the following outline for Section C with the following seven

sections covered in detail for you to know what goes into a really good PWS document:

Section C-1 BackgroundSection C-2 Acronyms and DefinitionsSection C-3 Government Furnished PropertySection C-4 Contractor Furnished PropertySection C-5 Task Descriptions (Outputs)Section C-6 Technical PublicationsSection C-7 Technical Exhibits



Attachments (Technical Exhibits) should include these documents and many more:

• Performance Requirement Summary (PRS)• Statement of Objectives (SOO)• Historical and Projected Workload• Required Mandatory Reports, and possibly…• Quality Assurance Surveillance Plan (QASP)• Proposed Service Level Agreement (SLA)• Other required and mandatory reports, or data

UNLESS… you are asking the contractor to propose on the basis of your Statement of Objectives (SOO).



A well written PWS, enables contractors to:

1. Determine what needs to be done (best way)2. Determine the skill sets (capabilities), level of

expertise, and hours required 3. Develop realistic and reasonable equipment

and facility estimates for their price proposal4. Compile a Technical & Cost proposal



Please don’t restrict competition through tight specs, and …

Please don’t prescribe manpower unless necessary.

You must jettison old concepts and approaches andlet contractor’s be creative on their own…that’s

what PBA is all about



Job Analysis- 1st StepCreating a PWS-it’s a lot of work!

• Organizational Analysis• Tree Diagram or Work Breakdown Structure draft• Activity Analysis (Input-Work-Output)• Performance Value Analysis (PVA)• Workload Analysis (few realize how big this is!)• Resource (property) Analysis• Services Analysis• Property Analysis• Reports Analysis• Forms Analysis• Governing Directives Analysis


This is the Flow for Developing a PWS

Requirement

JOB analysis

Activity AnalysisInput-Work-Outputs

Resource Analysis

PV Analysis

Disincentives/Incentive

P R S

P W S


PWS Work & Quality Assurance

QASP is one-sided and Government only- not binding

= SLA


The Work Breakdown Analysis(some call it a Tree Diagram)

In a PWS, one performance based task statement will be written for each main task and any sub-tasks in the Work Breakdown Structure (WBS) describing the desired outputs to be achieved in your PWS.



5. You must decide how to measure and manage contract performance

• QASP describes the procedures to be used by Government to ensure that the service provider is meeting the minimum requirements

• QASP includes the task requirement, performance indicator, standard, acceptable quality level and method of inspection the Government will use to verify acceptability.

• QASP is nothing more than a guide for surveillance of each task by the COR. If you have a PWS you must have a QASP per the FAR, but using it alone is really not enough.

• Using a SLA with the QASP is a better process.


• A Quality Assurance Surveillance Plan is a Government’s Contract Administration Plan (CAP) or document used to describe what-when-where-and how for the COR to inspect.

• The QASP only outlines what methods the COR should follow in determining if the contractor meets the contract specifications.

• A QASP can also be contractor developed, if requested.• Service Level Agreement is a more performance based

solution, and can also be requested in the RFP.



• A Service Level Agreement (SLA) is a negotiated document that is proposed, negotiated, discussed and accepted as part of the binding contract that covers both QA/QC processes for both parties.

• A SLA document outlines what the government expects; what the service provider must provide at minimum to be acceptable and what incentives and disincentives are built in.

• A SLA is a living document that promotes an ongoing and collaborative dialogue between government and industry, something a QASP cannot do.

• A SLA details what corrective actions the contractor and Government are obligated to do, provide, and when incentives, or givebacks will occur in the event of failure or substandard performance.



6. Select the Right Contractor

Your ability to select the right contractor comes from the evaluation of their technical proposals, and the source selection processes including Low Priced Technically Acceptable (LPTA), Best Value (BV) and Price Technical Trade Off (PTTO) or Cost Technical Trade Off (CTTO)

Technical proposal are to be written in accordance with the instructions stated in Section L of the RFP, and evaluated per Section M criteria.


• If the PWS includes a specific task, and the contractor is not asked to actually discuss their experiences in performing that task or the process they’d use per Section L then there is no way to evaluate the contractor.

• You may end up with a • Agency’s must make sure they think through

what they want demonstrated or discussed in proposals.



• Ensure that the individuals selected to serve on the Source Selection Evaluation Team have direct hands-on experience with the kind of work being evaluated, for failure can have grave consequences.



Now you are going to learn about the actual:

Performance Work Statement

Formatting


The PWS & SOO

• Nobody has ever said that there is a best format for Section C, but what we should be is consistent within the agency.

• Does Your Agency Have its own format? Fine, use it, but make sure it covers what is required.

• Variations are OK, as long as it makes sense• Government needs to be consistent in PWS

development, so the next section is our Section C (suggestion to follow)


The PWS & SOO PWS Content & Format

• C1 – General (intro and scope)• C2 - Definitions & Acronyms• C3 - GFP and Services• C4 - Contractor Furnished Items• C5 - Specific Tasks (Performance Outputs)• C6 - Applicable Directives• C7 - Technical Exhibits



• C1 General typically includes things like:– Scope (keep it related to the tasks)– Background (keep it simple)– Personnel (key and regular)– Dress and Conduct, etc.– ASK: Can this go in another part of the RFP?

If so, the Contracting Officer should put it there and not in the PWS. We want to keep duplication down to a minimum.



• C2 DEFINITIONS:– STANDARD

• Contractual Definitions• Program Office Definitions

– TECHNICAL• Those Not Generally Understood• Acronyms• PMO (program management office)



• C3 GOVERNMENT FURNISHED PROPERTY AND SERVICES:– PROPERTY/FACILITIES

• EQUIPMENT (major and minor property)• SUPPLIES/MATERIALS/REPAIR PARTS

– SERVICES • Utilities (phone, water, etc.)• Maintenance (facilities, equipment)



• C4 CONTRACTOR FURNISHED ITEMS:– Say…“The Contractor Shall furnish all items

and services not listed as Government furnished in Section C3.”

– Do specify Minimum Quality & Minimum Qty Standards, if needed

– Government Reimbursement for Special Items (General Purpose or Special Purpose Test Equipment) when approved.



• C5 SPECIFIC TASKS:– The Outputs = what you want accomplished– Identify inputs (resources) needed.– Identify required Government interactions

need for work to take place properly



• C5 is for SPECIFIC TASKS:– USE “HOW TO” ONLY FOR ESSENTIAL:

• Safety and Health Issues• Where only one process can possibly work• For Interactions outside the SCOPE of work

– SPECIFIC PWS TASKS:• Can Reference Directives or other documents• It is Better if PWS Stands alone without too many

references.



Performance Requirements Summary lists the PWS tasks = that = QASP surveillance requirements listed– Ties Inspection & Acceptance to

performance outputs, Acceptable Quality Levels (AQL) using Key Performance Indicators.



• C5 SPECIFIC TASKS– Never forget secondary requirements

• Equipment Maintenance– When repairs and maintenance must occur

• Emergency or Contingency Requirements

– Always consider timing– Sequence of Events required, Phase 1, then 2– Simultaneous ongoing work that conflicts with

other workcopyrighted material 2013 by TAI

Inc.


• C5 SPECIFIC TASK INFORMATONShould talk to:

• Terms-both parties will operate under• Conditions- both parties will adhere to• Variances- permitted to one or both parties• Historical work patterns• Always reference in Section C • This also applies to the SLA, if used



• C5 SPECIFIC TASKS-Always Reference Supporting Documents in C-

7 (Technical Exhibits) go in Section J of the SIR

• Illustrations• Drawings• Diagrams• Schematics• Layouts



• C5 SPECIFIC TASKS- Locations– Specify the work locations, such as:

• The City• The buildings• The rooms• The Places of Performance• Be specific!



• C5 SPECIFIC TASKS– For Cost Reimbursement Work-

• List Task Categories of Work• List Labor Categories• Give Examples

• Discuss Integration of Tasks, Skills, Equipment, etc.• Discuss Seasonal Variations• Make sure you have a surveillance plan (Known as a

Contract Administration Plan (CAP))



• C6 GOVERNMENT DIRECTIVES & FORMS– List applicable Directives

• Regulations, publications, instructions, orders, notices, SOPs, etc.

– List required forms• Host on a website (PDF fillable, if possible)

– Be specific (mandatory or optional)– Specify who maintains the directives



• C7 TECHNICAL EXHIBITS or INDEX– TE1–Performance Requirement Summary– TE2-Estimated Workload– TE3-Required Reports (CDRL)– TE4-Maps & Layout of work area– Etc…

•


In SummaryYou must have:

• A good and consistent format for any PWS• Thorough documentation and exhibits• Know what your performance outputs are• Be able to measure your outputs• Know the outputs are correct, and• Have a solid QASP or SLA to work with


The following Draft PWS was one that I had developed back when I was at DOL. It contains all Seven Sections of the C1 through C7 format

I just covered in this short course. This is a very fine example of a PWS document that

contains all the required sections for Section “C” (C-1, C-2, C-3, C-4, C-5, C-6 and C-7)

Make sure when you draft a PWS that it also contains these same sections and you’ll be

on your way to a very good PWS. Robert Knauer CPCM CPPO
