Best Practices in Service Contracts Getting good value and ensuring accountability

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Best Practices in Service Contracts - Getting
good value and ensuring accountability
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Best Practices

• Building the Contract
• Managing the Contract
• Completion of the Contract
• Capturing new knowledge

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Building the Contract
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Building the Contract

• Client - define the expectations for a successful
  contractual relationship. Examples
• On time and at or below budget
• Performance criteria
• Customer survey results

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Building the Contract

• Contracting team (client, procurement) determine
  the contracting approach
• Support selected success criteria
• Partnership with Contractor
• Determine key risks/mitigating strategies
• Define roles who will be managing the contract?
  

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Defining Expectations
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Building the Contract

• Define and execute a fair bidding and awarding
  process.
• Model RF(x) by contract type
• Fixed price
• Cost reimbursement
• Time and Material
• Indefinite delivery
• Ensure Full Monty bidding process

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Building the Contract

• 4-Negotiate a mutually agreeable contract that
  embodies the contracting approach. Clearly
  determine contract completion (date, acceptance)
• Client defines desired outcome
• Contractor determines the best way to achieve
  that outcome
• Clearly defined Statement of Work (SOW)

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Managing the Contract
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Managing the Contract

• Provide orientation for contractors.
• Culture and norms of the client. Discuss
  performance measures, contract milestones etc.
  with key individuals.
• Clearly define roles of Client / Contractor
• Organization policy compliance e.g. harassment,
  workplace safety, parking, travel.

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Managing the Contract

• Monitor Performance and provide timely feedback.
• Performance-based contracting
• Focus on output, quality or outcomes
• Connect all the pieces
• Client desired expectations
• Contracted terms and deliverables

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exercise
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Managing the Contract

• Establish a clear communication process specific
  to the project
• Reporting schedule
• KPI model
• Benchmarking metrics
• Competency standards for consultants
• Meeting schedule
• Progress reporting to SOW
• Conflict resolution

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Completion of the Contract
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Completion of the Contract

• Contract completion based on contract type.
• Acceptance
• Fixed date
• Final Milestone completion
• Bonus or penalties for performance
• Requirement for competitive evaluation

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Capturing New Knowledge
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Capturing New Knowledge

• Knowledge transfer to client
• Post mortem evaluation
• RFP evaluation methods
• contracting methodology
• KPI metrics used
• Communication methods
• Update templates (rf(x), contract, letters etc.)

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Summary

• Funding agencies requiring more accountability
  and demonstrated value
• Ensuring value and accountability requires
  significant effort even before the RFP
• Value add for the procurement organization

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Best Practices in Service Contracts - Getting
good value and ensuring accountability

• Questions?

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Bibliography

• Effectively Managing Professional Services
  Contracts. Sandra L. Fisher, Michael Wasserman,
  Paige P. Wolfe. IBM Centre for The Business of
  Government.
• Seven Steps to Performance Based Services
  Acquisition. U.S. Office of Federal Procurement
  Policy.
• Its whats up front that counts. Richard W.
  Walker, Government Computer News, 11/10/03
• Contributions by
• Bob Moore, Director, Purchasing - University of
  Western Ontario
• Paul Dugal, Manager, Purchasing Services
  University of Manitoba
• Ron MacDonald, Chief Executive
  Officer-Interuniversity Services Inc.