U.S. Army Materiel Command

A Blueprint for PromotingGovernment-Industry

Communication & Teamwork

1

Introduction

he goal of the AMC Partnering Program is to promote government-

industry communication and teamwork throughout the acquisition

process by implementation of a “Model Partnering Process” for

AMC. Partnering is an essential component of the AMC Alternative

Dispute Resolution Program, aimed at avoiding contract disputes

before they impact contract performance. ❖

T

“Sharing knowledge through mutualtrust and honesty made Partnering themost rewarding experience of myprofessional career.”

—Susan PearsonContracting Officer,

U.S. Army Communications-Electronics Command

“Partnering has improved our program byexpanding open communication.Changes and improvements have beenmuch easier to incorporate as a result ofPartnering.”

—Bill ReynoldsLead Contract Manager,

Armored Security Vehicle Program,Textron Marine & Land Systems

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“Partnering is a natural extension of the

Integrated Product Team concept. It pro-

vides a flexible framework for govern-

ment and industry team members to work

together to solve problems and informally

resolve disputes. This helps reduce pro-

gram costs and speeds the fielding of

Army equipment.

To paraphrase the late, great Vince

Lombardi—Partnerning isn’t everything;

it’s the only thing.”—Honorable Gilbert F. Decker

Assistant Secretary of the Army (RDA)

“Accomplishment of AMC’s mission

depends on our ability to work

effectively with our partners in

industry. Partnering helps us to do

this successfully and deliver the very

best products to our ultimate

customers—the soldiers.General Johnnie E. Wilson

Commanding General,

Army Materiel Command

“I have seen Partnering used

successfully in many of our most

important procurements. It is an

exceptional tool that helps keep

complex programs on schedule

and within budget.”—Dale G. Adams

Principal Deputy for Acquisition,

Army Materiel Command

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Table of ContentsBackground & Definition ................................................................................................5

Benefits of Partnering .....................................................................................................7

Partnering is Not: ............................................................................................................9

Important Elements of Partnering ................................................................................. 11

The AMC Model Partnering Process ..............................................................................13

Step One: Getting Started .............................................................................................15

Decision to partner ......................................................................................................15Making the commitment.............................................................................................15Obtaining resources .................................................................................................... 16

Step Two: Communicating with Industry ......................................................................17

Extending the invitation to partner ..........................................................................17Mutual agreement to partner ....................................................................................17

Step Three: Conducting the Workshop & Developing the Charter ..............................19

Selecting a facilitator .................................................................................................19Preparing for the workshop .......................................................................................19Conducting the workshop ..........................................................................................20

Step Four: Making it Happen .........................................................................................25

Following agreed upon procedures ............................................................................25Active champion involvement ....................................................................................25Continuous communication .......................................................................................25Identification of problems and joint problem-solving ...............................................26Periodic reviews ..........................................................................................................26Measuring and celebrating success ...........................................................................27Reinforcement ............................................................................................................. 28

Conclusion ........................................................................................................................29

Questions .........................................................................................................................29

For More Information ......................................................................................................31

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Table of Contents (cont)

Appendix A ............................................................................................................... A-1 Partnering Solicitation Provision

Appendix B ............................................................................................................... B-1 Partnering Agreements and Charters

Appendix C ............................................................................................................... C-1 Overarching Partnering Agreement

Appendix D ............................................................................................................... D-1 Rocks in the Road Action Plan

Appendix E ............................................................................................................... E-1 Conflict Escalation Procedures

Appendix F ............................................................................................................... F-1 ADR Protocol Agreement

Appendix G ............................................................................................................... G-1 AMC ADR Program

Appendix H............................................................................................................... H-1 AMC Acquisition ADR Program

Appendix I ................................................................................................................ I-1 Partnering Performance Survey

Appendix J................................................................................................................ J-1 Metrics

Appendix K ............................................................................................................... K-1 Questions and Answers about Partnering

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oo often the acquisition process is undermined by adversarial rela- tionships, suspicion between the

government and industry, volumes ofpaperwork and costly litigation. We canno longer afford to do business in thismanner. This Guide provides the acqui-sition community with a tool that canmaximize the potential for achievingcontractual objectives. This tool is calledPartnering.

Partnering is a commitment be-tween government and industry toimprove communications and avoiddisputes. It is accomplished through aninformal process with the primary goalof providing American soldiers withquality supplies and services, on time,and at a reasonable price.

Partnering has been used success-fully for many years in constructioncontracting by both industry and theU.S. Army Corps of Engineers. TheAMC Partnering Program has signifi-cantly expanded the application of thePartnering process to research anddevelopment, materiel acquisition, baseoperations, and engineering and supportservices contracting.

Background & Definition

Partnering constitutes a mutual com-mitment by the parties on how they willinteract during the course of the contract,with the primary objective of facilitatingimproved contract performance throughenhanced communications.

Partnering is primarily an attitudeadjustment where the parties to the con-tract form a relationship of teamwork,cooperation, and good faith performance.Partnering requires the parties to lookbeyond the strict bounds of the contract todevelop this cooperative working relation-ship which promotes their common goalsand objectives.

The Partnering philosophy is notunique. It is similar to picking a partner atthe office picnic and entering the three-

T“Through the implementation ofthe Partnering process, we wereable to preclude a recurrence ofthe performance and scheduleproblems that we had repeat-edly experienced in the past,while also eliminating claims andlitigation.”

—James OttDirector of Public Works,

U.S. Army Communications-Electronics Command

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legged race. The partners have their legstied together and know that to win the racethey must reach the finish line; however, ifthey run in different directions, do not startat the same time and on the same leg, or donot hold each other up and keep each otherout of potholes on the path to the finishline, neither will finish successfully. Simi-larly, government and industry must worktogether, communicate their expectations,agree on common goals and methods of

Separate Government &Contractor Teams

Partnered Team

• “Us vs. Them” • “We’re in this together”• Win-Lose • Win-Win• Surprises • Effective communication• Your problem • Our problem• Individual Government • Team response & Contractor responses• Separate goals & • Common goals & objectives objectives

performance, and identify and resolveproblems early on—or risk bringing bothpartners to the ground.

Eliminating long-standing adversarialattitudes requires more than simply advo-cating a new philosophy. That is why thisGuide provides a model process whichshould be followed in order to achieve themany substantial benefits which resultfrom Partnering. ❖

The Bridge to Partnership

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Benefits of Partnering

Partnering establishes mutual goalsand objectives

This avoids the “us vs. them” mentalitythat often characterizes government-industry relations. Finding commonground in mutual goals and objectives,the parties soon realize that they’re “inthis together” and that success isdependent upon their commitment andability to work as a team.

Partnering builds trust andencourages open communication

At the beginning of their contractualrelationship, the parties establishcommunication channels designed topromote openness, trust and efficientcontract administration.

Partnering helps the parties eliminatesurprises

Increased communication on varioussubjects means that the parties areless likely to be surprised by eventsthat occur during contract perfor-mance. Surprises result in scheduledelays and additional costs, oftenleading to disputes and litigation.

Partnering enables the parties toanticipate and resolve problems

The partners proactively anticipateproblems and design an Action Planaddressing how those problems will bejointly identified and resolved oravoided. They recognize that problemswill occur during contract performanceand that the existence of these prob-

lems does not mean that their rela-tionship has failed.

Partnering avoids disputes throughinformal conflict managementprocedures

At the outset of the relationship, theparties determine how they will man-age any conflicts that might arise.This is often accomplished through aConflict Escalation Procedure. Thisprocedure identifies the roles andresponsibilities of the individuals fromboth government and industry andprovides for the automatic elevation ofissues through several organizationallevels to avoid inaction and personal-ity conflicts.

Partnering avoids litigation throughthe use of Alternative DisputeResolution

The commitment to resolve disputesinformally at the earliest opportunityminimizes the necessity for litigationin administrative and judicial forums.Avoiding the considerable expense anddelay attributable to litigation freesthe Partnering participants to concen-trate their efforts on successful andtimely contract performance.

“Partnering cuts decision time,which means money, especiallyto the small contractor.”

—David T. Morgan, Jr.Vice-President/General Manager,

Valentec Systems, Inc.

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Partnering reduces paperworkWhen the parties focus on contractperformance rather than case build-ing and “documenting the file,”paperwork can be, and has been,significantly reduced.

Partnering reduces the time and costof contract performance

By establishing open communicationas a guiding principle, parties toPartnering arrangements have foundthat issues are raised, discussed andresolved more expeditiously. Thisenables the partners to meet or exceedcontractual schedule requirementsand avoid costly mistakes or rework.

Partnering reduces administration andoversight

With increased communication andempowerment by senior management,the partners find a significant reduc-tion in the need for layers of adminis-tration and oversight.

Partnering improves safetyTaking joint responsibility for ensur-ing a safe work environment for con-tractor and government employeesreduces the risk of hazardous workconditions and avoids workplace acci-dents.

Partnering improves engineeringefforts

Daily engineering activity, as well asthe formal value engineering process,are streamlined through the applica-tion of Partnering principles.

Partnering improves morale andpromotes professionalism in theworkforce

The Partnering process empowers theparties to work together towardscommon goals. This creates a uniquelypositive outlook and motivation topersonally contribute to the team’sefforts.

Partnering generates harmoniousbusiness relations

Enhanced communication, the identifi-cation of shared goals and objectives,the recognition that problems willarise, and the agreement to addressthose problems through a specially-designed procedure will facilitatecreating and maintaining harmoniousbusiness relations.

Partnering focuses on the mutualinterests of the parties

Rather than the parties individuallydeveloping positions on issues,Partnering engenders a team-basedapproach to issue identification andproblem resolution, which is focusedupon the accomplishment of the par-ties’ mutual objectives. ❖

“Partnering has replacedfinger-pointing withteamwork.”

— Dr. Daryl R. KendrickProgram Director,

Lockheed Martin Ordnance Systems

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MandatoryAlthough the Partnering processbenefits both government and indus-try, it is not mandatory. The ADRphilosophy and the Partnering processrequire a personal commitment to adifferent kind of relationship—onethat is based on both a cultural adjust-ment and “outside the box” thinkingfor which voluntary acceptance isimperative.

A panaceaPartnering will not prevent all prob-lems in every contract. There may besome issues that must be litigated.

A one-way streetPartnering cannot work if both partiescontinue to adhere to the “us vs. them”mentality or do not approach contractperformance as a team. The partners’focus must be on the achievement ofmutual goals and objectives throughthe creation of a “win-win” relation-ship.

Successful without total commitmentSenior management within govern-ment and industry must truly believein and become advocates for thePartnering process. Partnering in-volves hard work and a willingness toaccept the risks and uncertaintiesinherent in trying something new.

A waiver of the parties’ contractualrights

Partnering is not a contractual agree-ment and does not create, relinquish,or conflict with the legally bindingrights or duties of the parties.

Inconsistent with any acquisition-related statute or regulation

There are no statutory or regulatorybarriers to adopting the Partneringphilosophy or process.

Contrary to the government’sbusiness interests

The goal of the acquisition process isto provide our soldiers with qualitysupplies and services, on time, and ata reasonable price. Partnering maxi-mizes the potential for meeting thatgoal.❖

Partnering is Not:

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“Partnering is the cornerstone of

AMC’s Alternative Dispute Resolution

program. By avoiding costly, time-

consuming, and unpredictable

litigation, it allows government and

industry managers to maintain full

control over their business decisions.”

—Edward J. Korte

Command Counsel,

“In an era of diminishing resources,

Partnering is a smart business strategy.

The time that contracting officers and

program managers invest in improving

communication with their industry

partners yields big dividends in better

contract performance.”

—Gary A. Tull

Assistant Deputy Chief of Staff for

Research, Development & Acquisition,

Army Materiel Command

Army Materiel Command

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n order to make the Partneringprocess work, it is imperative thatgovernment and industry reduce non-

productive effort and focus on improvingcontract performance. The following ele-ments are critical to this process:

PreparationThe participants must understandwhat Partnering is and truly believethat the current contracting processcan be improved by a new way ofdoing business. Partnering will onlywork in organizations that are cultur-ally prepared to accept change. Theymust recognize that the up-frontinvestment in preparing to partnerwill yield significant benefits through-out contract performance.

CommitmentSenior managers within both govern-ment and industry must be activelyinvolved while clearly and continuallydemonstrating their support for theprocess. Additionally, the participantsin the Partnering process must havean unwavering commitment to it andthe open communication that is itshallmark.

Inclusion of appropriate partiesIn order for the Partnering process towork, everyone who can impact theperformance of the program must beinvolved. The partners must carefullychoose which organizational elementswill be represented as well as whichspecific individuals should participate.

Strong consideration must be given tothe participation of major subcontrac-tors, user representatives, and con-tract administration personnel whoseinvolvement in the Partnering processmay be essential to successful contractperformance.

Clear definition of rolesParticipants in the Partnering processmust fully understand and accepttheir specific roles and responsibilitiesand be empowered with the requisitedecision-making authority in order forthe Partnering arrangement to besuccessful.

Important Elements of Partnering

“The worst that can happen is weend up doing it the way we did itbefore.”I

—Marshall CollinsChief, Rocket, Mortar &

Pyrotechnics Branch, U.S. Army Industrial Operations Command

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Use of the Partnering toolsThe partners will establish tools andprocesses at the Partnering Workshop:

✔ The Charter✔ Goals and objectives✔ Mission Statement✔ Problem identification and reso-

lution process✔ Conflict Escalation Procedure✔ ADR approach✔ Evaluation methodology

The partners must utilize and rely onthese tools throughout contract perfor-mance in order to maintain focus anddirection.

Reinforcement and follow-upIn-process reviews should be held on aregular basis to ensure that programgoals and objectives are on track andto measure accomplishments. Momen-tum will be maintained through theachievement of goals, the celebrationof successes and the endorsement ofthe Partnering process by participantsand senior leaders.1 ❖

1 This section is based on an article entitled “Seven Reasons Why Partnering May Fail on YourProject,” written by Partnering facilitators William S. Spragins and Richard D. Dutmer for TheContractor’s Management Journal.

The culture within the acquisitioncommunity is undergoing dramaticchange as a result of the introduction ofnumerous initiatives designed tostreamline acquisition processes. In-dustry has had to adjust to the realitiesof the changing global situation withthe ending of the Cold War. Both gov-ernment and contractor employees arefacing unprecedented downsizing andreorganization efforts. Accordingly,there is an understandable hesitancy toaccept further changes such asPartnering. Unlike many new initia-tives, however, the Partnering processis a workforce multiplier, the utiliza-tion of which is absolutely essential toour future success.

Partnering is aWorkforce multiplier

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The AMC Model PartneringProcess

GettingStarted

Conducting theWorkshop &

Developing theCharter

Making itHappen

Step 1

Step 3

Step 4

Communicatingwith Industry

Step 2

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Partnering is an attitude adjustment.

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Decision to partnerThis first step is critical. Partnering isa process that can be used in anycontractual action; however, it is up tothe individual activity and the con-tracting parties to determine whetherto use Partnering.

Who can suggest Partnering?While the decision to partner on aspecific project needs the support ofsenior management, anyone withingovernment or industry can initiatethe process by bringing the Partneringconcept to the attention of the Procur-ing Contracting Officer (PCO) and/orthe Program Manager (PM).

When is Partnering beneficial?Partnering is most beneficial whenthe parties believe that traditionalcontract administration methods mayprove to be ineffective, particularly ina downsizing environment.

Partnering is particularly valuable toorganizations committed to DODacquisition streamlining and cycletime reduction, and for those seekinga process that identifies and resolvesproblems early and without the needfor costly and time consuming litiga-tion.

Selecting the contract to partnerPartnering has been successfullyemployed on contracts that are techni-cally complex, involve several majorplayers, are for the acquisition ofcritical items, or anticipate identifi-able problems. Excellent candidatesfor Partnering include acquisitionswhere prior contract performance has

been poor or where there has been ahistory of adversarial relationshipsbetween the government and thecontractor.

In selecting contracts for Partnering, acontract of two years’ duration orlonger is generally preferred. Nor-mally, a contract of less than twoyears is not long enough in which tomaximize the benefits of a Partneringrelationship. However, if the partiesare familiar with, or have experiencein the process, its utilization onshorter contracts can be beneficial.

Making the commitmentTo succeed, Partnering needs the totalcommitment of senior management, aswell as everyone with a stake in therelationship—those who will have animpact on contract performance. Peri-odic meetings will ensure the contin-ued commitment of stakeholders,introduce new participants to thePartnering process, and reinforceteam goals.

Senior managementIt is important that senior managerswithin the Partnering organizations

Step One: Getting Started

“Resistance (to Partnering) isbased on the attitude ‘I don’thave the time.’ If this is true, youcan’t afford not to partner.”

—Pat MartelChief, Hydra Rocket Section,

Ammunition Procurement Division,U.S. Army Industrial Operations Command

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affix their personal stamp of approvalon the Partnering effort. Writtenpolicy statements from these govern-ment and contractor managementofficials demonstrating their supportfor and commitment to the Partneringprocess will greatly assist in creatingand maintaining the support of par-ticipants.

Program stakeholders“Stakeholders” are those personswithin government and industry whoare critical to ensuring program suc-cess. They, along with the roles theyplay, must be clearly identified andwell defined. The user of the productor system being acquired is an impor-tant stakeholder whose presence atthe initial Partnering Workshop todescribe the need for the item and itsrole in supporting the American sol-dier is crucial to successful orientationand commencement of the Partneringprocess.

Empowerment of participantsTrust is an essential characteristic ofPartnering. Trusting participants andempowering them with the requisiteresponsibility and authority to makebinding decisions within their desig-nated areas is fundamental to thesuccess of the Partnering process.

Designation of “champions”Senior-level and program-level “cham-pions” should be designated by eachpartner. The senior-level championsare individuals who play a powerfuland influential role in the process andare generally at the PM level. Theywill oversee the project, reinforce theteam approach, overcome resistingforces, participate in resolution ofissues escalated to their level, cel-ebrate successes, and maintain a

positive image for the project. Theyalso communicate with senior manage-ment officials (e.g., Commander, Pro-gram Executive Officer, or Chief Ex-ecutive Officer) to keep them apprisedof Partnering efforts and to solicittheir continuing commitment.

The program-level champions arehigh-profile individuals, generally atthe PCO or Contracts Manager level,who are involved in the daily affairs ofthe program. They provide the leader-ship to ensure that the Partneringprocess moves smoothly throughoutperformance of the contract. Theycoordinate activities of team members,maintain regular contact with theother partners, provide information tosenior-level champions (and others insenior management), and encourageadherence to the Partnering processand compliance with the terms of thePartnership.

Obtaining resourcesPart of the commitment of an organi-zation to the Partnering process is therecognition that resources are re-quired in order to achieve success.

TimeParticipants will need to have suffi-cient time to learn about Partnering,to engage in team-building exercises,and to attend scheduled workshops.

MoneyFinancial requirements for Partneringinclude the costs of conducting thePartnering Workshop and renting theworkshop facilities, as well as travel-related expenses. ❖

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Extending the invitation to partnerIndividuals within both governmentand industry are strongly encouragedto recommend the use of thePartnering process. Considerationshould be given to using the AMCModel Partnering Process in theseacquisition programs.

A good opportunity for AMC organiza-tions to highlight their desire to part-ner is at Advance Planning Briefingsfor Industry (APBIs) when govern-ment representatives describe currentand future acquisition programs. It isrecommended that a copy of thisPartnering Guide be provided to APBIattendees.

Including a provision forPartnering in the solicitation andon the world wide webThe invitation to partner should beextended as early as possible in theacquisition process.

(Appendix A contains a samplePartnering solicitation provision.)

Since your invitation to partner maybe the first time that industry hasencountered the concept, it is veryimportant to clearly specify what it isthat you have in mind by “Partnering.”One way to do this is to augment yoursolicitation provision by including thisAMC Partnering Guide in the solicita-tion package. It is also recommendedthat you highlight your desire topartner in the solicitation’s executivesummary.

AMC organizations can also “post”their desire to partner on their elec-tronic bulletin boards/world wide webhome pages and provide their prospec-tive offerors with information aboutthe Partnering process and proceduresdescribed in this Guide. The AMCPartnering Guide is available on theinternet at http://www.dtic.dla.mil/amc/

Partnering also needs to be communi-cated to the subcontractor community,especially those with major roles toplay. Encourage offerors to ensurethat their major subcontractors aremade an integral part of thePartnering effort.

Discussion at the pre-solicitationconferenceAMC procuring activities should begindiscussing their desire to utilizePartnering with industry at the pre-solicitation conference. The govern-ment can explain the Partneringprocess, concept, and philosophy toprospective offerors, and identify forindustry the principal governmentplayers. Contractors will be morereceptive to and supportive of thePartnering process if they know whowithin the government will be in-volved.

Mutual agreement to partnerImplementation of the Partneringprocess should be discussed with thecontractor as soon as possible after thecontract is awarded. It is stronglyrecommended that Partnering be anagenda item for the post-award confer-ence or start-of-work meeting. ❖

Step Two: Communicating with Industry

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“Discourage litigation.Persuade your neighbors tocompromise whenever youcan. Point out to them howthe nominal winner is often

a real loser— in fees,expenses, and waste of

time.” —Abraham Lincoln

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Selecting a facilitatorIn most cases, a facilitator-directedPartnering Workshop will acceleratethe successful implementation of thePartnering effort.

Role of the facilitatorThe facilitator is a neutral person whohelps the partners get organized fromthe outset of the process. The facilita-tor helps develop and leads thePartnering Workshop and is instru-mental in having the parties designtheir Charter, identify potential prob-lems (“Rocks in the Road”), and de-velop a Conflict Escalation Procedure.

The facilitator also plays the role ofthe “honest broker,” deals with anyskepticism or bias brought to theworkshop, and keeps the team focusedon the Partnering process.

Selection of the facilitatorThe parties should obtain the servicesof a facilitator experienced in thePartnering process. For more informa-tion, see the Partnering Program’sworld wide web site. To access the site,visit AMC’s home page at:

http://www.dtic.dla.mil/amc/

•Click on “Headquarters ArmyMateriel Command”

• Click on “Chief of Staff”• Click on “Office of Command Counsel”• Look for the Partnering initiative in

the “Teams” section.

Preparing for the workshopPreparation for the workshop is criti-cal. The more thorough the prepara-tion, the more focused the workshopwill be from the beginning, therebymaximizing workshop benefits. Thefacilitator can assist the parties at thispreparatory stage of the process aswell.

Selecting participantsThe workshop attendees should in-clude those individuals needed toachieve contract success, i.e. all those“who can throw a monkey wrench”into the program. Anyone who doesnot participate in the workshop maynot understand the Partnering phi-losophy and process. Additionally, theattendees’ roles and responsibilitiesshould be discussed internally withinboth government and industry prior tothe workshop.

Reviewing the contractThe partners should carefully reviewthe contract and identify potentialproblems which may arise duringcontract performance.

Site of the Partnering WorkshopA neutral site is desirable in thatbeing away from the workplace en-hances the team-building process,contributes to a consistent focus onPartnering, and minimizes the poten-tial for participants to be drawn awayfrom the table for other work-relatedmatters.

Step Three: Conducting the Workshop& Developing the Charter

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The Partnering Workshop should notbe viewed as one more tasker on analready full plate, but rather as an up-front investment with substantial longterm benefits for the partners.

The length of the workshop will de-pend on such variables as the com-plexity of the contract, experience ofthe participants in Partnering, thenumber of partners, and the timeneeded for team-building. The work-shop may entail both individual andjoint sessions with the facilitator and,generally, will be at least two days inlength. The workshop should consist ofthe following activities:

Team-buildingThe facilitator brings the partiestogether to develop inter-organizational team-building skills.The specific skills needed (e.g.,communication skills, personalityprofiling, joint problem resolutionskills) will be identified and addressedby the facilitator based upon anassessment of the individual program.This establishes the foundation for thebalance of the workshop.

Roles and responsibilitiesThe roles and responsibilities for eachPartnering participant should beidentified during the workshop. Thisassists in establishing and clarifyinglines of communication and levels ofauthority.

Coordinating with the facilitatorIt is important that the partnerscoordinate with the facilitator duringthe preparation stage, especially ifthey are unfamiliar with thePartnering process. Keeping the facili-tator involved maximizes the benefitsto the partners by keeping them onthe Partnering path and by increasingthe facilitator’s knowledge of thespecific program, contract require-ments, and unique contract adminis-tration issues.

Conducting the workshopA good Partnering Workshop is aninvaluable team-building experienceand an excellent method for initiatingthe Partnering process. What happensat that workshop will create the mo-mentum that drives the partners inthe same direction toward the accom-plishment of mutual goals and objec-tives throughout contract perfor-mance.

During the workshop, the essentialingredients of the Partnering arrange-ment are drafted:

✔ The Partnering Charter (mission state-ment and goals and objectives)

✔ Specific program issues and concerns(“Rocks in the Road”), with an ActionPlan developed for each

✔ Conflict Escalation Procedure✔ Alternative Dispute Resolution (ADR)

approach✔ Metrics for the assessment of accom-

plishments✔ Reinforcement techniques

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The Partnering Charter orAgreementThe Partnering Charter is the focalpoint of the relationship and the blue-print for success. It is the thresholddocument in which the parties setforth their mission statement, mutualgoals and objectives, and commitmentto the Partnering relationship.

There is no single approach to draftinga Partnering Charter. The Chartershould include a mission statementexpressing the partners’ commitmentand agreement to communicate openlyand to share information in order toavoid surprises. (See example below).

The Partnering Charter should alsoinclude specific, identifiable and mea-surable overriding goals and objec-tives, such as:

✔Deliver the product/service (xx) daysahead of schedule

✔ Identify problems at the first opportu-nity

✔ Jointly resolve problems at the lowestpossible level

✔ Seek fair treatment for all participants✔ Limit cost growth to less than (xx) %✔ Pass First Article Testing the first time✔ Eliminate litigation through the use of

ADR procedures

When the parties establish their over-riding goals and objectives, they mustensure they are mutually agreed uponso that everyone will be actively fo-cused on achieving them.

(See Appendix B for examples ofPartnering Agreements and Charters.)

We (the parties are identified) are committed toachieving our shared goals and objectives forthe (name of program) through this PartneringCharter. Partnering represents our mutualdesire to:• Work as a team in harmony and cooperation• Communicate openly and honestly• Raise concerns immediately• Resolve conflicts at the lowest level possible• Eliminate paperwork and written

communication• Recognize the contributions that each

member of our team makes

We seek to achieve a quality work product,delivered on time and within budget so that wecan proudly say that we are supporting theneeds of the American soldier.

Partnering AgreementXYZ Contract

signed by the Parties

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Problem resolutionThroughout the Partnering process,the partners will be encouraged toidentify problems at the earliest stageand to work together to solve them.Don’t wait for your partners to findthe “hidden traps” themselves. Identi-fying problems early, particularlythose about which only you are aware,is the best way of demonstrating toyour partner your commitment, open-ness, honesty, and desire to worktogether as a synergistic team. Re-member, the occurrence of a problemdoes not mean that the Partneringarrangement has failed.

“Rocks in the Road”“Rocks in the Road” is a phrase thatdescribes the potential problems thatthe partners may encounter duringcontract performance. The “Rocks inthe Road” process means that theparties mutually agree to avoid sur-prises, to communicate problems to

Overarching PartneringAgreements

Consideration may also be givento the use of Overarching PartneringAgreements in which senior manage-ment from the government and in-dustry formalize their commitment toutilize the Partnering process in theperformance and administration ofeach of their subsequent contractualefforts. Individually designed andtailored Partnering Agreementswould be developed for each of thosecontracts.

(Appendix C is an example of anOverarching Partnering Agreement.)

each other immediately, and to worktogether as a team to expeditiouslysolve problems as they occur. For each“Rock in the Road,” the parties developan Action Plan for addressing theproblem and identify the team mem-bers empowered to resolve the prob-lem.

(Appendix D is an example of a“Rock in the Road” identification/Action Plan that has been used suc-cessfully.)

Conflict EscalationRather than race to the courthousewhen a conflict arises during contractperformance, the partners will turn tothe Conflict Escalation Procedurethey designed during their workshop.Any issue not resolved at the workinglevel within the established timeframes will be elevated automaticallyto the next identified level.

The parties agree to attempt to resolveevery issue at the lowest level possiblewith specifically named individuals.The partners agree not to elevate theissue to the next higher level prema-turely or unilaterally and to follow theConflict Escalation Procedure devel-oped at the workshop. This processavoids “leap-frogging” and keepsproblems from festering.

Lastly, it is imperative that the indi-viduals identified in the Conflict Esca-lation Procedure not delegate theirresponsibilities and personally thatthey perform the role(s) agreed to atthe workshop.

(Appendix E contains examples ofConflict Escalation Procedures—alsoreferred to as Issue Resolution—devel-oped during Partnering Workshops.)

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Alternative Dispute ResolutionPartnering is an integral part of theAMC ADR Program. Within thePartnering framework, the partnersdesign a dispute resolution approachto be used in the event that an issuecannot be resolved through theConflict Escalation Procedure.

ADR is not a single process or proce-dure. It is an inclusive term thatdescribes a variety of joint problem-solving techniques that present

✔Reduces the cost of litigation✔Avoids program delays occasioned by

protracted litigation✔Recognizes the need to maintain a har-

monious business relationship✔Shifts the focus of decision-making

from a legal to a business perspective

The ADR process selected by thepartners should be documented in aProtocol Agreement jointly signed bythe partners.

This Agreement should specify:

✔The steps to be used✔The specific individuals who will par-

ticipate in the ADR procedure✔The role of each participant✔A well-defined time structure

options in lieu of litigation. ADRencourages the consideration ofcreative solutions to disputes thatare unavailable in traditional dis-pute resolution forums. It encour-ages communication between theparties and focuses on the parties’real interests, rather than on theirpositions or demands, enabling themto address the real concerns underly-ing the conflict.

✔A confidentiality clause that preventsthe parties from disclosing disputeresolution communications in subse-quent proceedings, in the event thedispute cannot be resolved throughADR.

(Appendix F is an example of anADR Protocol Agreement)

(Appendix G identifies the vari-ous ADR techniques that have beensuccessfully used in AMC and else-where. It also describes the charac-teristics of ADR.)

Partnering is one of four AMC ADRacquisition initiatives.

(Appendix H discusses the otherthree programs: the AMC-Level Pro-test, Debriefing, and Contract DisputeResolution Programs.)

Using ADR

Benefits of ADR

24

Measuring successDuring the Partnering Workshop, thefacilitator will assist the partners indetermining how success will be mea-sured through the development of abaseline and assessment criteriawhich will be utilized during periodicfollow-up meetings to determine ifgoals and objectives are on track.

The partners should draft aPartnering Performance Survey tomeasure the team’s progress towardsthe accomplishment of identifiedobjectives. An initial survey should bedone at the workshop to measureperceptions and views at the outset of

“Through these Partnering Agreements, we’veeliminated bureaucracy, increased flexibility,decreased lead times, and built better relation-ships with our contractors. Most importantly, theagreements will improve readiness by speedingdeliveries to our ultimate customer, the soldier inthe field.”

— Jimmy MorganDirector,

Armament and Chemical Acquisition & Logistics Activity

program performance. Thereafter,results of in-process surveys of govern-ment, contractor and subcontractorpersonnel, asking the same or similarquestions, can be compared to theoriginal responses to assess progressand to determine the extent to whichthe Partnering objectives have beenaccomplished.

(Appendix I contains an example ofa Partnering Performance Survey.) ❖

25

Active champion involvementThe champions are more than figure-heads. They must play a vital role ininitiating and energizing thePartnering process for those on theteam and implementing the toolsdeveloped at the Partnering Work-shop.

Continuous communicationAdhere to the principle of open andhonest communication. Without thisfoundation, your Partnership cannotsucceed. Communication builds trustwhich is a critical component of theprocess. Remember, when the goinggets tough or unanticipated problemsarise, Partnering becomes more impor-tant than ever. Only through open andhonest communication among thepartners can these obstacles be suc-cessfully overcome.

Although face-to-face meetings aremost conducive to open communica-tion, time and budgetary constraintsmay limit the feasibility of this ap-proach. Any media available (VTC,e-mail, teleconferences, desk-topvideos) should be used to maintaincontinuous communication among thepartners. Additional workshops shouldbe considered if the primary partici-pants change during contract perfor-mance.

lthough the Partnering processgets a “jump-start” during thePartnering Workshop, the newly

learned technique of conducting busi-ness as partners must be vigilantlyreinforced throughout contract perfor-mance. If the Partnering process is notutilized back at the office or if you donot act differently in your day-to-daydealings with your partners, you willfail to capture the significant advan-tages for your program which willresult from the Partnering process.The following paragraphs discusssome ways to ensure that the benefitsof Partnering are achieved.

Following agreed uponprocedures

Trust the product of your workshop.Frequently refer to the PartneringCharter, the mission statement, thegoals and objectives, the Action Plandeveloped for each “Rock in the Road,”the Conflict Escalation Procedure andthe ADR approach you designed.

Adhering to these procedures willsignificantly decrease the time andcost spent in identifying issues andresolving problems. Following yourPartnering approach avoids the sce-nario of having to repeatedly searchfor the “right” person with whom youcan discuss an issue and resolve aproblem. More importantly, however,deviating from the workshop proce-dures may create the belief amongyour partners that you do not trustthem and are not committed to thePartnering process.

Step Four: Making it Happen

A

26

Identification of problems andjoint problem-solving

Throughout the Partnering relation-ship, the partners must be vigilant inidentifying potential pitfalls andobstacles and work together to expe-ditiously resolve these issues.

Periodic reviewsThe Partnering Workshop is a startingpoint. The necessity for adjustments inthe process and the relationshipshould be anticipated. Without anaccurate assessment of the successesto date, valuable corrections cannot bemade. The fact that adjustments areconsidered necessary is not indicativeof failure or error; it only recognizesthe need for change or reinforcement.

Periodic reviews at regular intervalsare critical to success. Do not adoptthe view that the partners shouldreview the bidding only when prob-lems demand action. Periodic reviewsare important to effective manage-ment and may involve the entire teamor a portion of the team, and canaddress single or multiple issues.Periodic reviews can involve any of thefollowing three activities:

Assessment of the partneringrelationshipWhen the partners interact theyshould discuss the Partnering processand actively listen to the commentsfrom their counterparts. Periodicsurveys measuring the partners’ongoing relationship will help theparties assess the effectiveness of thePartnering arrangement and the toolscreated at the workshop. The champi-ons should then take the lead to facili-tate necessary adjustments, reinforcethe Partnering process, keep theparties focused, and ensure that theactions taken are consistent withCharter objectives.

Joint problem-solving

✔ A positive attitude is essential✔ Avoid blame✔ Avoid surprises✔ Seek mutual accountability for

problem resolution✔ Embrace change

The immediate identification ofa problem is crucial because badnews does not get better with time.The Conflict Escalation Proceduredesigned by the partners envisionsearly recognition of problems. Useit!

Through open and honest com-munication and joint problem-solving, the partners create a proac-tive relationship based upon man-aged risk-taking which encouragescreative “outside the box” ideas andsolutions.

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Measuring and celebratingsuccess

When interim goals or objectives areachieved, or when problems are suc-cessfully resolved, celebrating thosesuccesses will provide momentum forthe team. The celebration can consistof T-shirts or caps worn by team mem-bers, certificates, awards, statues, or apicnic. The celebration can be a jointone for all partners, or it can be inter-nal for the government or contractorparticipants. Celebrating achievementsbuilds on those successes, createsconfidence in the Partnering process,and contributes to further team-build-ing.

Always return to the Charter and to itsrecitation of goals and objectives. Themost accurate measure of success inthe Partnering process is whetherthese are being met. Analyze theresults achieved against those youforecast in the Partnering PerformanceSurvey developed at the workshop.For example:

✔Were the originally identified time linesachieved?

✔Are deliveries/services completed on orahead of time?

✔Are testing requirements satisfied thefirst time?

✔Has litigation been avoided?✔Has paperwork been reduced?✔Was the money spent commensurate

with the performance?

Follow-up workshopsOne reason why it is beneficial tokeep the facilitator informed duringcontract performance is to enhancehis or her involvement in follow-upworkshops if they are required. Fol-low-up workshops should be consid-ered when major players in thePartnering process are replaced inorder to ensure that new participantsare knowledgeable about and com-mitted to the process.

Follow-up workshops should also beconsidered if there is a breach of theCharter or Conflict Escalation Proce-dure, or if there is some other indica-tion that it is necessary to reaffirmthe process and remind participantsof the need for their consistent com-mitment.

MetricsThe measurement phase of thePartnering process is crucial in orderto determine whether the process isworking, what strengths and weak-nesses are present, and what revi-sions will make the Partnering pro-cess better.

(Appendix J addresses the differ-ent criteria which government andcontractor partners may wish to usein developing a specific measurementapparatus.)

28

ReinforcementNo matter how well the Partneringprocess is working, it periodically mustbe reinforced. Senior managementshould be briefed by the championsand asked to encourage Partnering tothe workforce generally, and to theteam participants, specifically. Recog-nize successful efforts by publicizingthem through such means as the in-stallation newspaper, command brief-ings to the workforce and at commandstaff meetings. One benefit of rein-forcement is that it demonstrates toother employees that engaging in thePartnering process will be worth theirtime and effort and, most importantly,will benefit the American soldier.

When the contract is complete, thepartners should review what occurred,do a final comparison against thegoals set forth in the Partnering Char-ter, and develop a lessons learned/after-action report, to be used as aguide for future Partnering efforts. ❖

29

Conclusion

This “Model” has been used success-fully by several AMC procuring activities. When using the

Partnering process, the participantsare free to tailor this methodology asnecessary to achieve the objectives oftheir particular program. However,each basic step of the process is impor-tant and should not be overlooked.

QuestionsWhen individuals are first introducedto the Partnering philosophy andprocess, they often have numerousquestions.

(Appendix K provides responses tofrequently asked questions and willprovide important information to thoseconsidering the use of the AMC ModelPartnering Process.)

30

31

For more informationor more information on AMC’sPartnering Program, and to dis-cuss how you can utilize the proce-

dure for your contracting actions,please contact any of the members ofthe AMC Partnering Team.

Edward J. KorteCommand CounselHeadquarters, Army Materiel Command(703) 617-8031

Mark A. SaganDeputy Chief CounselU.S. Army Communications-Electronics Command(908) 532-9786

David C. DeFriezeAttorney-AdvisorU.S. Army Industrial OperationsCommand(309) 782-8424

Kenneth P. BousquetGroup Leader, Acquisition CenterU.S. Army Tank-automotive& Armaments Command(810) 574-7106

Stephen A. KlatskyAssistant Command CounselHeadquarters, Army Materiel Command(703) 617-2304

F

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Appendixes

Appendix A ............................................................................................................... A-1 Partnering Solicitation Provision

Appendix B ............................................................................................................... B-1 Partnering Agreements and Charters

Appendix C ............................................................................................................... C-1 Overarching Partnering Agreement

Appendix D ............................................................................................................... D-1 Rocks in the Road Action Plan

Appendix E ............................................................................................................... E-1 Conflict Escalation Procedures

Appendix F ............................................................................................................... F-1 ADR Protocol Agreement

Appendix G ............................................................................................................... G-1 AMC ADR Program

Appendix H............................................................................................................... H-1 AMC Acquisition ADR Program

Appendix I ................................................................................................................ I-1 Partnering Performance Survey

Appendix J................................................................................................................ J-1 Metrics

Appendix K ............................................................................................................... K-1 Questions and Answers about Partnering

Appendix APartnering solicitation provision

A-1

In an effort to most effectively accomplish the objectives of this contract, it is proposedthat the government, the contractor, and its major subcontractors engage in the Partneringprocess.

Participation in the Partnering process is entirely voluntary and is based upon a mutualcommitment between government and industry to work cooperatively as a Team toidentify and resolve problems and facilitate contract performance. The primary objectiveof the process is providing the American soldier with the highest quality supplies/serviceson time and at a reasonable price. Partnering requires the parties to look beyond the strictbounds of the contract in order to formulate actions that promote their common goals andobjectives. It is a relationship that is based upon open and continuous communication,mutual trust and respect, and the replacement of the “us vs. them” mentality of the pastwith a “win-win” philosophy for the future. Partnering also promotes synergy, creativethinking, pride in performance, and the creation of a shared vision for success.

Participation in the Partnering process is entirely voluntary. After contract award, thegovernment and the successful offeror will decide whether or not to engage in thePartnering process. Accordingly, offerors shall not include any anticipated costs associ-ated with the implementation of the Partnering process in their proposed cost/price (e.g.cost of hiring a facilitator and conducting the Partnering Workshop). If the parties elect topartner, any costs associated with that process shall be identified and agreed to aftercontract award.

The establishment of this Partnering arrangement does not affect the legal responsibilitiesor relationship of the parties and cannot be used to alter, supplement or deviate from theterms of the contract. Any changes to the contract must be executed in writing by theContracting Officer.

Implementation of this Partnering relationship will be based upon the AMC ModelPartnering Process, as well as the principles and procedures set forth in the AMCPartnering Guide. The principal government representatives for this effort will be (in-clude names, positions, and roles in contract administration).

Partnering - Section L

Appendix COverarching Partnering Agreement

C-1

Overarching Partnering Agreement betweenTeam C4IEWS and Hughes Aircraft Company

1. We the senior leadership of Team C4IEWS and the Hughes AircraftCompany (HAC), are firmly committed to the utilization of the Partneringprocess in the performance and administration of each of our futurecontractual endeavors.

2. We will serve as the champions for the establishment of positiveand proactive relationships between our organizations based upon mutualtrust and respect and the replacement of the “us and them” mentality ofthe past with a “win-win” philosophy and partnership for the future anddedicated to the accomplishment of mutually beneficial goals and objec-tives ( i.e., the delivery of the highest quality products/services, onor ahead of schedule, at a reasonable price/profit).

3. We are committed to the highest ethical and professional standardsand the creation of a mutually supportive team-based environment. Webelieve that our commitment to Partnering will promote synergy, pride inperformance, and quality workmanship leading to showcase projects andoutstanding contract performance.

4. Our overriding objective shall always be providing America’swarfighters with the most technologically advanced and reliable equip-ment in a timely manner in order to promote the swift, safe andsuccessful accomplishment of their missions.

5. All contracts between HAC and Team C4IEWS awarded subsequent tothe execution of this Agreement will include an individually designedand tailored Partnering Agreement based upon open, effective and con-tinuous communication and dedicated to successful contract performance,the establishment of a true team spirit, the timely resolution/avoidanceof problems, and continuous product and process improvement.

6. Immediately after the award of a contract, each of theseGovernment/Contractor Teams will work together to identify and mutuallyagree upon the particular program’s mission, goals and objectives: allpotential obstacles to the timely and effective completion of thecontract ( i.e., the “Rocks in the Road”); the establishment of a tieredconflict avoidance/resolution process; and milestones for assessing, ona periodic basis, the Team’s success in overcoming these hurdles and

C-2

successfully accomplishing the program’s objectives. Existing contractsbetween Team C4IEWS and HAC will each be reviewed to determine thefeasibility and potential benefit of incorporating a Partnering Agreementduring contract performance.

7. Although we anticipate the development of a tiered conflict avoid-ance/resolution process, we agree to empower our employees to jointly andexpeditiously resolve all problems at the lowest possible level.

8. Alternative Dispute Resolution techniques will be used to thegreatest extent possible in order to facilitate the timely resolution ofdisputes and eliminate the necessity for litigation.

9. It is recognized that notwithstanding the objectives of thisAgreement, it shall not be used as a vehicle for the dissemination orexchange of any competition sensitive, source selection or proprietaryinformation or for the premature or unilateral release of acquisition-related information prior to its publication to industry in general.

10. Any Partnering Agreement(s) entered into between Team C4IEWS and HACshall not be used to alter, supplement or deviate from the terms of thecontract(s) and the legal rights and obligations of the parties set forththerein. Any changes to the contract(s) must be executed in writing bythe Contracting Officer.

11. Team C4IEWS and HAC will share the costs associated with theimplementation of the Partnering process as set forth in the individualPartnering Agreements executed pursuant to this Agreement.

12. We agree to discuss the status of Partnering initiatives betweenTeam C4IEWS and HAC on a quarterly basis, commencing in March 1997, inorder to reinforce the Partnering commitment, share and build uponsignificant accomplishments, and identify and eliminate any perceivedbarriers to future success.

Appendix D“Rocks in the Road” Action Plan

D-1

Armored Security Vehicle Program

Potential “Rocks” identified in Problem-Solving Groups

• GFE Deliveries• Long-lead items• Interpretation of requirements• Inadequate/slow information transfer• Overly bureaucratic/risk avoidance

Other Potential Key “Rocks”

• ILS considerations• Concurrent engineering• Untimely decisions• Cost Control• Geographical considerations• PCO/ACO interface

Other Potential “Rocks”

• Logistical, technical issues• Possible change in user requirements• Inclement weather• Unrealistic specifications• Changes in personnel• Contract changes• Worker training• Hesitation in the partnering process• Loss of funding• Decision levels too high• Labor issues• Contractor technical data• Unknown factors• Old school versus new school• Contractual gray areas

Appendix GAMC ADR Program

G-1

The objectives of the AMC ADR Program are to adopt an interdisciplinary ap-proach to address disputes and dispute resolution, to design processes to enable the partiesto foster creative, acceptable solutions, and to produce expeditious decisions requiringfewer resources than formal litigation.

Definition of ADR

ADR is not a single process or procedure. It is an inclusive term that describes avariety of joint problem-solving techniques that present options in lieu of litigation. ADRencourages the consideration of creative solutions to disputes that are unavailable in tradi-tional dispute resolution forums. It encourages communication between the parties andfocuses on the parties’ real interests, rather than on their positions or demands, enablingthem to address the real concerns underlying the conflict.

Characteristics of ADR

Regardless of the specific ADR process chosen, there are characteristics commonto all:

1. Voluntary — the parties choose to use ADR.

2. Expeditious — avoids components of traditional litigation that prolong anddelay dispute resolution.

3. Controlled by the parties — the dispute is handled and resolved through anADR Protocol Agreement in which the parties choose a specific ADR method, outline thespecific steps of the process, and establish time periods for each step.

4. Non-judicial — rather than turning the case over to a third-party decision-maker who has no stake in the outcome of the dispute, ADR decision-making is in thehands of the parties to the dispute—the stakeholders.

5. Flexible — ADR is not a single method of dispute resolution. There are manymethods. The parties decide which is best for them.

G-2

Examples of ADR Processes

1. Negotiation

• Communication between parties to a suit. The parties seek resolution by listen-ing to each other’s view point.

• The basic building block for all forms of ADR.

2. Mediation

• Negotiation facilitated by a neutral third party who does not have power to issuea decision—the parties decide the outcome themselves.

• Assists in clarifying issues, identifying objectives, and managing the process.

3. Fact-Finding

• An impartial third party collects information on the dispute and makes a reportabout relevant data or issues recommendations.

• Provides an impartial assessment of the dispute for the parties.

4. Arbitration

• The parties choose a neutral person to hear their dispute and to resolve it byissuing a decision which can be advisory or binding.

• Although adjudicative, differs from litigation in that the rules of evidence are notapplicable and the process is expedited.

5. Mini-Trial

• Summary presentation of the case to key principals who are chosen by theparties to preside and render a decision.

• A pre-trial agreement establishes the process to include strict time lines onpresentation and submission of position papers, and restrictions on discovery andwitnesses.

Appendix HAMC Acquisition ADR Program

H-1

Partnering is one of four AMC ADR programs in the acquisition area:

1. Headquarters AMC-Level Protest Program

The Headquarters AMC-Level Protest Program provides a forum at the HQ AMC-level that is an expeditious and less costly alternative to litigation before the General Account-ing Office or the Federal courts. In 1995, the AMC-Level Protest Program was named “One ofThe Ten-Best Government Procurement Practices” by the Office of Federal ProcurementPolicy. Additionally, Executive Order 12979 (October 25, 1995) mandates an agency-levelprotest resolution process throughout the Executive Branch of government, modeled after theAMC program. For more information on this ADR Program, or for a copy of a brochure onthe HQ AMC-Level Protest Program, contact the Office of Command Counsel Protest Litiga-tion Team, (703) 617-9022.

2. AMC Debriefing Program

We believe that meaningful debriefings for unsuccessful offerors will instill greaterconfidence in the acquisition process, reduce protests and litigation because of the increaseddialogue that characterizes the process, and enhance government-industry relations. To thisend, AMC drafted a Debriefing Handbook entitled: “A Practical Guide for Conducting Post-Award Debriefings.” For more information on this program or for a copy of the Handbook,contact the Office of Command Counsel Business Law Team, (703) 617-2302. Copies of theHandbook can also be ordered through the Defense Technical Information Center,1-800-225-3842.

3. Contract Dispute Resolution Program

Traditional contract dispute resolution litigation is expensive, time-consuming, andoften characterized by program delays, contributing to a breakdown in the relationshipbetween the government and the contractor. AMC has designed a contract dispute ADRprogram that substantially reduces dispute resolution time. This ADR procedure is fast, fair,and affordable for both government and industry. For more information on this ADR initia-tive, contact the Office of Command Counsel Business Law Team, (703) 617-2302.

4. Partnering—the subject of this Guide.

Appendix JMetrics

J-1

A List/Baseline Of Things To Look At To Assess The Success Of Your Partnering Efforts

The parties entering into the Partnering Agreement must identify a method to measurethe impact Partnering has on contract performance. We strongly recommend that theparties keep these metrics in mind as they move through the contract and build theirPartnering relationship. Although each contract will have unique goals and objectivesidentified at the Partnering Workshop, it is imperative that the Partners agree upon atool or method to measure each goal and objective. The Workshop facilitator should beable to assist in developing such metrics. The following are a few examples of specificcontract performance items and components of a solid business relationship that could bemeasured during, as well as at the completion of, each Partnered contract.

Cost: There is no doubt that a comparison of the cost objectives with actual incurredcosts on the contract is an appropriate measurement of the impact Partnering has had oncontract performance. Whether the contract is cost reimbursement or fixed-price is notcritical. Under a cost reimbursement contract, the government would incur greater riskif costs were not controlled, while under a fixed-price-contract the contractor would incurgreater risk. In either case, however, both of the Partners may suffer when costs are notproperly controlled, as this often precludes the accomplishment of their objectives.

Quality: The government has many ways to measure quality once the product or serviceis delivered (i.e., number of Quality Deficiency Reports, Reports of Item Discrepancy,warranty claims). However, a measurement of the contractor’s in-house quality perfor-mance can be a far more crucial element in determining the success of Partnering. Byidentifying in-house quality measurement tools and reports, and having both partiesshare the responsibility for analyzing and resolving issues that contribute to poor qualityprior to delivery, the likelihood increases significantly that quality performance will beachieved. The parties must recognize that a sound contractor quality program will en-sure the product/service delivered meets the terms of the contract and the user’s needs.It will reduce rework and improve the probability of remaining within the contract’sestimated cost and delivery schedule.

Delivery: Obviously, the ability to meet delivery schedules contained in the contract is avital element of measuring Partnering success. It is, therefore, critical that the partiescontinuously communicate during contract performance to ensure that issues which mayhave an impact on delivery are resolved in a timely manner.

J-2

Paperwork: The parties should establish a method to determine if paperwork hasbeen reduced as a result of their Partnering activity. This may be as simple asfeedback on follow-up surveys or as complex as recorded logs for outgoing and incom-ing paperwork. We suggest the more informal approach to preclude the establish-ment of new reporting procedures or documents. The individuals working the issuesassociated with the contract can call upon their past experiences to assess whetherpaperwork actions have been reduced. They can also indicate if the parties arecommunicating and cooperating to the degree that “self-protection” paperwork isavoided.

Litigation/Claims: One goal included in each Partnered program should be zeroclaims or litigation events. Significant savings and enhanced contract performancecan be achieved by avoiding all claims and litigation. The Conflict Escalation Proce-dure developed at the Partnering Workshop must be utilized to avoid the necessityfor filing a claim(s).

Morale/Satisfaction: The follow-up surveys will reflect how well the parties areprogressing in maintaining or improving team morale and satisfying all stakehold-ers. Each individual committed to the Partnering Agreement should benefit fromthe experience and find personal satisfaction in successful completion of the contract.

Conflict Escalation Activity: Most issues will be resolved at the lowest level workingthe contract; however, in some instances, it will be necessary to elevate issues tohigher levels for review and resolution. The success of this process can be evaluatedthrough the results of the follow-up surveys and the responses provided by partici-pants regarding the Conflict Escalation Procedure.

Decision-Making Process: Timely decision-making is crucial to successful perfor-mance of any contract and will significantly reduce the potential for claims andlitigation. Failure to do so will result in frustration on the part of many contractstakeholders and increase the risk that performance will not be completed within theterms of the contract. Feedback received in follow-up surveys will provide informa-tion relative to the timeliness, effectiveness and equity of the decision-making pro-cess.

Quality Deficiency Reports (QDRs) and Reports of Item Discrepancy (RODs): Asmentioned above, these two items will identify post-delivery quality issues. Quanti-fying the number of QDRs and RODs received on supplies delivered will providedocumentary evidence of the extent of successful contract performance. In addition,the manner and timeliness in which the QDR or ROD is resolved will also indicatethe commitment parties have made to Partnering.

J-3

Percentage Received on Award Fee: Successful and outstanding contract performancemay result in achievement of the maximum award fee allowed under the contractterms. Failure to attain performance supporting the maximum, or very near themaximum, award fee could indicate a level of customer/user dissatisfaction thatshould have been identified during contract performance. If the parties are communi-cating in a cooperative, open arrangement and the contractor is responsive to theinformation provided by the customer/user, it should be likely that a high percentageof the award fee will be paid.

Achievement of Profit Objectives: A primary goal of any contract is that the contrac-tor achieve a reasonable profit. Failure to do so would preclude the contractor fromclassifying the program as a complete success. Even if all performance and qualityobjectives are met, the short and long term success of that firm is impacted by a fail-ure to meet profit objectives on individual contracts. The contractor personnel canprovide general statements on their ability to achieve this goal on fixed-pricecontracts. The same information can be obtained on cost reimbursement contracts,supported by DCAA confirmation following its review.

Appendix KQuestions & Answers about Partnering

K-1

Q-1 What is Partnering?

A The AMC Model Partnering Process, as described in this Guide, is based upon amutual commitment between government and industry to work cooperatively as a teamto identify and resolve problems and facilitate contract performance. The primaryobjective of this process is providing the American soldier with the highest qualitysupplies/services on time and at a reasonable price. Partnering requires the parties tolook beyond the strict bounds of the contract in order to formulate actions that promotetheir common goals and objectives. It is a relationship that is based upon open andcontinuous communication, mutual trust and respect, and the replacement of the “us vs.them” mentality of the past with a “win-win” philosophy for the future. Partnering alsopromotes synergy, creative thinking, pride in performance, and the creation of a sharedvision for success.

Engaging in Partnering is similar to picking a Partner at the office picnic and enteringthe three-legged race. The Partners have their legs tied together and know that to winthe race they must reach the finish line; however, if they run in different directions, donot start at the same time and on the same leg, or do not hold each other up and keepeach other out of potholes on the path to the finish line, neither will finish successfully.Similarly, government and industry must work together, communicate their expecta-tions, agree on common goals and methods of performance, and identify and resolveproblems early on—or risk bringing both Partners to the ground.

Q-2 Why would I want to become involved in the Partnering process? What’sin it for me?

A Partnering has not only consistently contributed to the success of a variety of pro-grams within AMC, it has also significantly enhanced the morale and professionalism ofthe individuals who have been involved in the process. By promoting creativity andempowering people with the requisite authority to make binding decisions, in real time,the Partnering process has engendered a uniquely positive outlook and motivation topersonally contribute to the accomplishment of the team’s goals and objectives. Mostpeople who have participated in the process report that their ability to focus on andresolve problems and accomplish tasks in a timely manner without surprises, protractedarguments and the necessity for generating endless file documentation, minimizesstress and non-productive time and maximizes job satisfaction. Significantly, manyPartnering participants have indicated that they would not want to work on a futureproject that was not Partnered.

K-2

Q-3 How can we financially afford to Partner in an environment in which ac-quisition budgets are consistently being reduced?

A The fact is that in today’s environment of dramatically reduced defense budgets, wecan no longer afford not to Partner. Although the Partnering process does entail an up-front investment to cover the costs of contracting with a facilitator and conducting thePartnering Workshop, experience has repeatedly demonstrated that these initial ex-penses are minimal compared to the significant savings realized in the cost of contractperformance for both the government and the contractor.

Q-4 Isn’t the additional time necessitated by the implementation of thePartnering concept inconsistent with the increasing emphasis on acquisitionstreamlining and cycle time reduction?

A No. It is true that implementation of the Partnering process, particularly amongindividuals or organizations unfamiliar with the concept, requires an initial investmentof time both in preparing for and conducting the Partnering Workshop. However, experi-ence has consistently demonstrated that Partnered contracts result in earlier contractcompletion. In fact, the Partnering process facilitates the accomplishment of acquisitionstreamlining and cycle time reduction objectives.

Q-5 How can a manpower-intensive process like Partnering be implemented inan environment in which the government and industry are downsizing?

A Although implementation of the Partnering process requires the active participationand involvement of all government and contractor stakeholders, it is not, in fact, a man-power-intensive process. Rather, through its focus upon open communications; the em-powerment of the primary players and clear definition of their roles and responsibilities;the early identification of “Rocks in the Road” and formulation of an Action Plan for theirprompt resolution; the avoidance of surprises; the significant reduction in paperwork; thedevelopment of a Conflict Escalation Procedure; and the elimination of litigation, thePartnering process is, in reality, a workforce multiplier, the utilization of which is abso-lutely essential to our future success.

Q-6 Aren’t the personnel and budgetary costs attributable to Partnering dis-proportionate to any potential benefits which can be obtained?

A No. Experience has repeatedly demonstrated that the personnel and financial invest-ment in the Partnering process is far outweighed by the benefits which consistentlyresult from the utilization of this technique.

Q-7 Isn’t Partnering simply a new “buzzword” for the team concept that hasalways been used in the administration of government contracts?

A No. The team approach which has historically been employed in the administration ofsome government contracts is significantly different from the Partnering concept. Gener-ally, in “traditional” contract administration, when teaming is used, there is a govern-

K-3

ment team and a contractor team that, for the most part, work independently. When thePartnering process is utilized, the government and the contractor approach contract per-formance as a single, interdependent unit whose objectives, focus and daily interaction areguided by the terms of the Charter which they themselves developed. Even when an inter-organizational team philosophy has been adopted, the parties usually do not have a pro-cess in place to implement that philosophy. The AMC Model Partnering Process providesthe blueprint for that implementation.

Q-8 Are there formalized rules for the implementation of the Partnering processor is it flexible enough to allow for tailoring as necessary to meet the needs ofindividual programs?

A There are no formalized rules for the implementation of Partnering. However, use ofthe AMC Model Partnering Process, tailored as necessary to achieve the objectives ofindividual programs, is recommended.

Q-9 Is the Partnering Charter a legally enforceable agreement?

A No. The Partnering Charter is not a contractual agreement and does not create, relin-quish or conflict with the parties’ legally binding rights or duties.

Q-10 What is the relationship between the Partnering Agreement and the con-tract?

A While the contract establishes the legal relationship between the parties, thePartnering Agreement establishes their business relationship. The Partnering Agreementconstitutes a mutual commitment by the parties on how they will interact during thecourse of the contract with their primary objective being successful and timely contractperformance.

Q-11 Can the Partnering Agreement be used to alter, supplement or deviatefrom the rights and obligations of the parties set forth in the contract?

A No. The Partnering Agreement cannot be used to alter, supplement or deviate from theterms of the contract, nor can it affect the legal responsibilities or relationship of theparties.

Q-12 Won’t the relationship between the government and the contractor engen-dered by the Partnering process undermine and/or preclude the enforcement ofthe parties’ contractual rights?

A No. Engaging in the Partnering process does not require either party to relinquish orwaive its contractual rights or to take any action that is inconsistent with its best inter-ests. The Partnering process is, however, based upon the parties’ commitment to commu-nicate openly and honestly, to expeditiously identify and resolve problems without thenecessity for litigation, and to work cooperatively as a team to accomplish their mutualgoals and objectives.

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Q-13 Wouldn’t it be improper for the government to become involved in or facili-tate the contractor’s efforts to comply with the terms of the contract (i.e., todeliver conforming supplies/services on time and within the estimated cost/price)?

A No. On the contrary, it is entirely appropriate and in the best interests of both partiesfor the government to team with the contractor in order to facilitate and streamline con-tract performance. In today’s environment of personnel downsizing and dramaticallyreduced defense budgets, we can no longer afford to approach contract administration in atraditional “us vs. them” manner. It is imperative that we employ creative, “outside thebox” thinking and accept the risks inherent in trying something new, in order to maximizeour ability to provide America’s soldiers with the most technologically advanced and reli-able equipment in a timely manner.

Q-14 Doesn’t implementation of the Partnering concept alter the traditionalrelationship between the government and industry?

A Yes. The Partnering process replaces the passive, independent, “hands off” philosophyof the past—an approach which experience has shown to be both ineffective and man-power-intensive—with a proactive, interdependent, team-based approach for the future, astrategy which has already generated significant dividends throughout AMC.

Q-15 Does the execution of a Partnering Agreement mean that disagreementsbetween the parties will no longer be permissible?

A No. Execution of a Partnering Agreement does not mean that the parties have some-how attempted to do the impossible—to preclude disagreements from arising during con-tract performance. On the contrary, the Partnering Agreement specifically anticipates thedevelopment of problems and conflicts and establishes a series of mechanisms designed toexpeditiously resolve them at the lowest possible organizational level in order to stream-line contract performance and avoid the significant expense and delays attributable tolitigation.

Q-16 If disputes occur during contract performance, does this mean that thePartnering process has been unsuccessful?

A No. The Partnering process specifically recognizes that disputes may arise duringcontract performance and establishes a methodology for their prompt resolution withoutthe necessity for litigation.

Q-17 Doesn’t the inclusion of Alternative Dispute Resolution provisions in thePartnering Agreement indicate that the parties anticipated that the Partneringprocess would fail?

A No. Partnering is an integral part of the AMC Alternative Dispute Resolution (ADR)program. The intent of the Partnering process is not to eliminate conflict, but rather tomanage it, so that conflict does not prevent or delay the achievement of the parties’

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overriding goals. Some issues may not be resolvable using the Conflict Escalation Proce-dure. When this happens, other ADR techniques, specifically selected by the parties, areused to apply different tactics in order to facilitate the timely resolution of conflict. ADR isnot a sign of failure, but rather a continuation of the parties’ commitment to successfulperformance without the necessity for litigation.

Q-18 Is the Partnering Agreement developed in conjunction with an individualcontract applicable to all subsequent contractual relationships between thegovernment and the contractor?

A No. Assuming that both the government and the contractor wish to engage in thePartnering process on a continuing basis, each contractual endeavor between them mustinclude individually designed and tailored Partnering Agreements reflecting the uniqueaspects and circumstances of each program (e.g., the parties’ goals and objectives; “Rocksin the Road”; and Conflict Escalation Procedure). It is noted that AMC does have experi-ence with the use of Overarching Partnering Agreements (see Appendix C) in which seniormanagement from the government and industry formalize their commitment to utilize thePartnering process in the performance and administration of each of their subsequentcontractual efforts. Even in these instances, however, the parties specifically recognizethe necessity to formulate individually designed Partnering Agreements for each of thosecontracts.

Q-19 Does the Partnering process have to be utilized on all contracts over acertain dollar value or of a particular duration?

A No. Use of the Partnering process is never mandatory. The personal commitment,open communications and “outside the box” thinking which form the foundation for thePartnering concept necessitate its voluntary acceptance and utilization by both govern-ment and industry. Nevertheless, in selecting acquisitions for Partnering, contracts of twoyears’ duration or longer are generally preferred. If the Partners are familiar with or haveexperience with the process, however, its use on shorter contracts is recommended.

Q-20 Is Partnering limited to use in sole source contracts?

A No. The Partnering process can be employed in conjunction with both sole source andcompetitive contracts.

Q-21 Can the Partnering process be utilized with any type of contract?

A Yes. The Partnering process can be employed in conjunction with any contract type.

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Q-22 Is it advisable to use the Partnering process when potentially complex andcontroversial issues are anticipated during contract performance? When poten-tial industry or government Partners have traditionally been uncooperative oradversarial?

A Yes. The Partnering process is most valuable and provides the greatest benefit to theparties when used in conjunction with technically complex efforts or in situations whereprior contract performance has been poor or there has been a history of adversarial rela-tionships between the government and the contractor.

Q-23 When should the government first communicate to industry its desire toutilize the Partnering process in conjunction with a particular program?

A The government’s desire to utilize the Partnering process in conjunction with a particu-lar program or series of programs should be communicated to industry as early in theacquisition process as possible. As discussed in this Guide, both the government andindustry are strongly encouraged to suggest the use of Partnering. These discussions cantake place during Advance Planning Briefings for Industry and, with respect to specificprograms, in draft solicitations published on a command’s Electronic Bulletin Board aswell as during Pre-Solicitation and Pre-Proposal Conferences.

Q-24 Does the enhanced level of communications between the government andindustry necessitated by the Partnering concept increase the potential for viola-tion of procurement integrity and/or standards of conduct rules?

A The existence of a Partnering Agreement between government and industry is not anexception to, inconsistent with, or a waiver of any of the rules relating to procurementintegrity and standards of conduct. Notwithstanding the fact that enhanced communica-tions between the parties is the foundation of the Partnering concept, it is imperative thatthe parties recognize that the Partnering relationship cannot be used as a vehicle for thedissemination or exchange of any competition sensitive, source selection or proprietarydata or for the premature or unilateral release of acquisition-related information prior toits publication to industry in general.

Q-25 Doesn’t the Partnering process encourage the implementation of construc-tive changes to the contract?

A No. The Partnering process encourages the parties to communicate openly on a con-tinuous basis, promotes the establishment of a cooperative relationship based upon trustand honesty, and specifically empowers the stakeholders, starting at the lowest organiza-tional level, to work together as a team to expeditiously resolve problems. It cannot, how-ever, be used to alter, supplement or deviate from the terms of the contract or affect thelegal rights and obligations of the parties. Any changes that are made to the contractmust be executed in writing by the Contracting Officer.

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Q-26 Won’t employee turnover within the government and industry underminethe success of the Partnering process?

A Significant employee turnover within the government and/or industry can potentiallyundermine the success of the Partnering relationship. It is, therefore, imperative thatwhen personnel changes are experienced, particularly among the “Champions” or primarystakeholders, the new Partnering participants be familiarized immediately with andembrace the process, especially the necessity for open and continuous communication.Follow-up workshops can be employed to reinforce the critical components of the process(e.g., goals and objectives; “Rocks in the Road”; and Conflict Escalation Procedure) and toassure the continuing commitment of the parties.

Q-27 Is the Partnering process consistent with the requirements of the Competi-tion in Contracting Act?

A Yes. Although the Partnering process is based upon trust, open communications, andthe development of a close working relationship between the government and industry, itis not an exception to the Competition in Contracting Act (CICA) nor a mechanismthrough which the requirements of CICA can be circumvented.

Q-28 Is it imperative that a facilitated Partnering Workshop be conducted?

A No. Although many of the activities encompassed within a facilitated Partnering Work-shop can be, and have been, accomplished by program participants on their own, it isstrongly recommended that a professional facilitator experienced in the Partnering pro-cess be utilized. The facilitator is an objective, neutral, “honest broker” whose participa-tion accelerates the successful implementation of the Partnering effort by minimizingskepticism and bias, keeping the parties focused on the Partnering process and playing apivotal role in the development of the Charter, the “Rocks in the Road”, the Conflict Esca-lation Procedure, and metrics for the assessment of program success.

Q-29 When is the best time to conduct the Partnering Workshop?

A The best time to conduct the Partnering Workshop is as soon as possible after contractaward. The Workshop can often be held in conjunction with the Post-Award Conference.

Q-30 Who should attend the Partnering Workshop?

A The Partnering Workshop must include, at a minimum, all “stakeholders” within bothgovernment and industry. Stakeholders are individuals who play a critical role in ensur-ing program success. This includes anyone who is in a position to disrupt contract perfor-mance or “throw a monkey wrench” into the process (e.g., Program Manager, ProcuringContracting Officer, user representatives, the testing community and contract administra-tion personnel).

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Q-31 Where should the Partnering Workshop be held?

A It is recommended that, where feasible, the Partnering Workshop be conducted at aneutral site away from the workplace. This approach contributes to the parties’ uninter-rupted focus on the Partnering initiative, negates any concerns over favoritism or “turf”,and minimizes the potential for participants to be called away for other work-relatedmatters.

Q-32 Who pays for the Partnering Workshop?

A The source of funding for the Partnering Workshop must be determined on a case-by-case basis. Generally, however, the Partners share the costs of conducting the Workshop(hiring the facilitator, renting the Workshop facility, etc.) and pay their own costs relatedto transportation, lodging, per diem and salaries.

Q-33 Can an offeror’s willingness to Partner in the future or its prior experiencewith the Partnering process be evaluated in conjunction with the source selec-tion process? Should Partnering be specifically identified as an evaluation fac-tor or sub-factor?

A Since Partnering is neither a contractual requirement nor a process whose use shouldever be mandated by the government, it should not be identified as an evaluation factor orsub-factor in the source selection process. Depending upon the structure of the evaluationscheme in negotiated acquisitions, however, an offeror can and should be given evaluation“credit” for successful prior Partnering efforts as part of the evaluation of the PerformanceRisk/Past Performance Factor. This can be accomplished either through direct recognitionof the benefits derived from the offeror’s previous Partnering experiences or indirectlythrough an overall assessment of the offeror’s performance on prior contracts that werePartnered. Furthermore, the offeror’s desire to engage in Partnering during the contractto be awarded, as well as its approach for the implementation of the process and strategyfor the enhancement of communications and timely contract performance, could be appro-priate for consideration in the evaluation of the Management Factor.

U.S Army Materiel CommandATTN: AMCCC

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