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Attachment 2

Performance-Based Statements of Work
Guidance for Using a Quality Assurance Plan (QAP)

procedures || steps

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Introduction

After it has been determined what services are needed, the next step in the award process is to generate a Statement of Work (SOW) that will provide the Contractor with an outline of the contract requirements. There are basically three types of SOWs - Functional Based, Performance Based, and a combination of the two. Selecting the type of SOW is dependent on how much the user wants to govern specific contract requirements.

The instructions provided below address a Performance Based (PB) Statement of Work. This type of solicitation document describes the top-level objectives that the Contractor is required to support. It is used to maximize the flexibility afforded the Contractor to propose innovative/cost-effective approaches to successfully completing the work.

Also provided is guidance for using a Quality Assurance Plan (QAP). The QAP defines what the Government must accomplish to ensure that the Contractor has performed the contacted services in accordance with the performance standards.


Performance-Based (PB) Statements of Work (SOW)

The types of contracts that are most likely to motivate contractors to perform optimally should be selected for Performance-Based SOWs. Performance-Based Contacts enables the increased use of fixed-price contracts and incentives to encourage optimal performance. It will be the program area responsibility to identify contract types and task within the contract to apply the degrees of monitoring and surveillance required.

A Performance-Based SOW describes what has to be accomplished without describing how the job must be done. For example, a task that requires a contractor to design a system to best meet the needs of the customer is performance oriented. It leaves the "how to" to the contractor. A performance-based description emphasizes acceptable results (Output).

  1. What is a Quality Assurance Plan (QAP)?

    A QAP is required in addition to writing your Performance-Based SOW. Provided below is a guideline for incorporating performance based statements of work and surveillance plans if one of the following contract methods is being considered. The QAP defines what the government must do to ensure that the contractor has performed in accordance with the PWS performance standard. This determination can range from a one-time inspection of a product or service to periodic in-process inspections of on-going product or service delivery.

    A good QAP should include a surveillance schedule and clearly state the surveillance method(s) to be used. The QAP should focus on the quality, quantity, and timeliness etc. of the performance outputs to be delivered by the contractor, not on steps required or the procedures used to provide the product or service.

    The development of the QAP also allows the agency to clearly define the amount of contract administration resources needed.

  2. TYPES OF CONTRACTS

    This sections covers various types of contracts and provides guidance on where PB-SOWs can best be used.

    Fixed Price

    If you are planning a fixed price contract, it should include the following:

    • Performance Based Statements of Work
    • Measurable Performance Standards
    • Surveillance Plans

    Cost-Reimbursement

    If you are planning a Cost-Reimbursement contract, you should include the following:

    • Incentives in addition to award fee to ensure contractors are awarded for good performance
    • Quality Assurance deduction schedules to assure satisfactory performance

    Time and Materials/Labor Hour Contracts

    If you are planning a Time and Material/Labor contract, you should consider the following:

    • Use Performance Based Statements of Work
    • Measurable Performance Standards
    • Surveillance Plans

    Previously Acquired Services Contracts

    If you are planning a previously acquired services contract, you should consider the following:

    • Agencies should rely on experience, knowledge and historical data from prior contract to incorporate performance based methods.

  3. PB-SOWs and QAP EXAMPLES

    Below are some good examples of services and products that are good candidates for PB-SOWs and QAPs:

    • guard service
    • operation of telephone and communications services
    • hospital housekeeping services
    • hazardous waste management
    • multifuntion public works services
    • operation and maintenance services
    • custodial services
    • fire protection
    • freight services
    • warehouse services
    • audiovisual services
    • administrative services
    • equipment support
    • facilities engineering -- resource management
    • family housing

  4. TYPES OF SURVEILLANCE METHODS:

    • 100 Percent inspection: This is usually the most appropriate method only for infrequent tasks or tasks with stringent performance requirements, e.g., where safety or health is a concern. 100 percent inspection is too expensive to be used in most cases.

    • Random Sampling: This is the most appropriate method for recurring task. For example, services are sampled to determine if the level of performance is acceptable. Random sampling works best for when number of instances and a statistically valid sample can be obtained. Computer programs may be available to assist in establishing sample procedures.

    • Periodic Inspection: This method, sometimes called "Planned Sampling," consists of the evaluation of tasks selected on other than a 100 percent or random basis. A predetermined plan for inspecting part of the work is established using subjective judgement and analysis of agency resources to decide what work to inspect and how frequently to inspect it.

    • Trend Analysis: This method should be used regularly and continually to monitor the contractor's on-going performance over time. Data for tracking trends can be gathered from all other evaluation sources and methods of database upon which the trend analysis is based. This database should be created and maintained by government personnel. The contractor's own metrics may provide most of the information needed for the analysis.

    • Customer Input: Although usually not a primary method, it is a valuable supplement to more systematic methods. For example, in a case where random sampling indicates unsatisfactory service, customer complaints can be used as substantiating evidence. In certain situations where customers can be relied upon to complain consistently when the quality of performance is poor, e.g., dining, facilities, building services, and customer surveys. However, use caution when assessing and evaluating customer input. Sometimes customer input can be complaint-oriented and not actually related to actual requirements of the contract.

    • Third Party Audits or Assessment: Third party audits or assessments refers to contractor evaluation by a third party organization that is independent of the contractor. All documentation supplied to, and produced by, the third party should be made available to the government by the contractor.

    The surveillance methods to be used should be discussed with the contractor to confirm they are fully understood. Whatever form of surveillance is used, the government should take care to ensure that no undue interference with contractor operations occurs. You should brief the contractors on surveillance requirements and responsibilities at a post-award conference.


  5. QAP CHECKLIST EXAMPLES:

    The best way to document surveillance is through use of a surveillance checklist. The checklist can be as simple as below:

    Performance Objective Required Service (task or deliverable) Performance Standard Method of Surveillance Positive/Negative Incentive
    % for NOT meeting the AQL

    This is the desired outcome

    (What do we want to accomplish as the end result of this contract?)

    (What task must be accomplished to give us the desired result?) Error Rates, Accuracy Rates, completion of milestones, cost control, staying within the targeted cost. The government must set these standards.   FAR does not mandate the use of performance incentives. Incentives can be monetary, non-monetary, realist, attainable and built on performance objectives and standards. Use positive or negative incentives when performance exceeds standard or is below standards
    Examples:
    1. Users shall have access to all desktop computing functions, as needed
    Desktop systems/networks shall be available to all users M-F, 6a.m. till 10p.m. 99% availability, as described herein. Inspect call logs for trouble calls. +/- 1% of total monthly price.

    Always find ways to use non-monetary incentives

    1. Moves, adds, and changes shall be accomplished as efficiently as possible
    Request for moves, adds, and/or changes shall be completed within 5 workdays after receipt of request. 98% of requests are completed within 5 workdays Random Sampling of request for service (i.e., RISS) logs, completed work tickets, and customer interviews. +/- 1% of total monthly price for each +/-1% variance from standard.
    1. Sufficient numbers of the staff members are available to resolve day-to-day issues.
    The Contractor shall provide qualified employees to adequately staff the program. Average staffing levels shall not fall below 90% on any task order. Invoices, reports and other records will be reviewed to determine staffing levels on a monthly basis. +/- .5% of total task order price, for each variance +/-5% (reflects positive and negative incentive) from standard.
    1. Customer problems shall be resolved as quickly as possible.
    Requests for service shall be efficiently logged and tracked, and the customer shall be notified as to the expected completion time. 98% of calls are resolved within same business day. Trouble tracking system will be reviewed, noting how request arrived (e-mail, phone), time arrived, and date/time completed; random +/- 1% of total monthly price for each variance of +/- 1% variance from standard.

    A Quality Assurance Evaluator (QAE) must be fully qualified to meet the following responsibilities of the position:

    • maintaining complete and accurate documentation,
    • a good relationship with the contractor
    • thorough knowledge of the contract requirements

    The QAE should be identified with a letter of assignment that include cautions against making legal interpretations, imposing tasks not in the contract, supervising contractor employees, or waiving contract requirements. A copy of the letter should be provided to the Administrative Contracting Officer.

    If additional information is needed, please contact your Contracting Specialist or Rose Mary Jackson on x4709.


PERFORMANCE-BASED STATEMENTS OF WORK

TEMPLATE FOR SECTION C


C. BACKGROUND AND PURPOSE

  • In 1 to 2 paragraphs provide an overview of the program or initiative this contract will support.
  • Provide events that led to or issues that surround the need for the requirements.
  • Indicate expected start and end dates of the contract
  • Indicate the estimated amount of the contract
  • Specify the type of contract and any purchase thresholds
  • Specify any phases to the initiatives

C.1 DEFINITIONS

  • Define any acronyms the Government uses for this initiative, give both the acronym and the words represented by the acronym.
  • Explain any special terms or phrases used in the SOW.
  • Definitions should be carefully considered by the Government.

C.2 SPECIFIC REQUIREMENTS or TASKS

  • Clearly state each objective, task, or activity
  • Identify expected or desired outcome(s)
  • Include provisions for the contractor to comply with all relevant Census Bureau statistical quality standards when the deliverables will be used in information products released by the Census Bureau.
  • Use the "Contractor Shall"
  • Use the "Government Will"
  • Use the Active Voice
  • Write in Nouns and Verbs
  • Prefer the Simple to the Complex
  • Check Grammar and Syntax
  • Try to be concise
  • Reference any applicable FAR Statements
  • Use Work Words: The Contractor Shall analyze, annotate, attend, audit, build, calculate, compare, consider, contribute, construct, control, create, define, design, determine, develop, differentiate, establish, evaluate, evolve, examine, explore, extract, form, generate, inquire, inspect, install, institute, judge, make, manufacture, notice, observe, organize, perform, probe, produce, pursue, reason, recommend, record, resolve, scan, search, research, seek, study, trace, track, and etc.

C.3 DELIVERABLES AND MILESTONE SCHEDULE

  • List each major task and assign a due date.
  • Identify delivery dates for each deliverable.
  • Clearly indicate Phases if needed.
  • Identify in a summary who will receive copies of the milestones and/or reports.

C.4 GOVERNMENT-FURNISHED RESOURCES

  • Clearly state what the Government will furnish to the Contractor.
  • Indicate what equipment, hardware, software, space, service manuals, documents, coding, and etc. the Government will provide to the Contractor.
  • Note any applicable FAR statements.

C.5 TRAVEL REQUIREMENTS

  • Indicate when, how the Government will fund the Contractor's travel expenses.
  • Reference any FAR statements if needed.

C.6 SKILL or RELEVANT EXPERIENCE REQUIREMENT

  • Identify any specific skill requirements needed to successfully complete the work.

C.7 PERFORMANCE MEASURES

  • Indicate how the government will measure the Contractor's performance to do the work. For example:
    1. The Contractor's ability to meet agreed scheduled dates
    2. The Contractor's ability to submit all deliverables on time as specified and agreed upon
    3. The Contractor's adherence to stay within the budget
    4. The Contractor's ability to produce quality assurance documents
    5. The Contractor's ability to prepare, develop, and use comprehensive reports/presentations

C.8 INCENTIVES

Market research shows that industry prefers positive incentives as a balance to negative incentives. Payment deduction schemes are generally instituted as a remedy for nonperformance, not as an incentive.

Nonmonetary incentives can be used in both types of contracts --- Fixed-Price and Cost-reimbursement. When developing non-monetary incentives, think about what the contractor would consider as an incentive.

Award Fee Contract Agreements. Based on evaluation factors established in an award fee plan, award fee contracts are a tool that subjectively assesses contractor performance for a given evaluation period. They allow contractors to earn a portion (if not all) of an award fee pool that is established as the beginning of the evaluation period.

Cost-Reimbursement Contract. Incentives are applied to fee only.

Two Types of Non-Monetary Incentives

  • Award term contract arrangements: instead of cash as compensation for quality performance.
  • Past performance: appropriately documenting past performance is another incetivize quality level of performance.

Award term arrangements are very similar to an award fee contract, however, instead of cash as compensation for quality performance, the contractor is awarded periods of performance. Award term arrangements ar most suited for situations where establishment of a long-term contractor relationship is valuable to the government and potential contractor. They differ from options in that award terms are based on a formal evaluation process and do not require those regulatory procedures required of options.

Past Performance. It is the fastest way to motivate the contractor to improve performance or to reinforce exceptional performance. This information could affect exercising option decisions or future contract award.

C.9 QUALITY ASSURANCE PLAN

Prepare a Quality Assurance Plan (QAP). Use the Checklist from the guidance document.

  • Summarize the Performance Objective
  • Indicate the Performance Standard for a specific task
  • Explain the Method of Surveillance the government will use
  • Offer Positive Incentives if needed
  • Indicate Negatives if needed
  • Reference OFPP Policy Letter 91-2
  • Note applicable FAR Statements

The sections noted in this guidelines documents consist of the general format of a Performance-Based Statement of Work. Program areas may be required to add additional sections to assist the Contractor in understanding the requirements and desired outcome. Other sections in Part C may include:

  • Contractor Responsibility
  • Government Responsibility
  • Equipment Monitoring Requirements
  • Non-Chargeable Maintenance Items
  • General Requirements
  • Evaluation Factors for Award

Your comments and suggestions are welcome. The information used to prepare these guidelines are from the following sources:

  • Contracting for COTRs Class Manual by Houseman and Associates
  • Performance- Based Service Acquisition Class Manual by National Contract Management Association
  • A Guide to Best Practices Performance Service Contracting by OFPP
  • Procedures-Purchase of Services Through the Federal Supply Schedule DRAFT-COPY by Albert Kennedy
  • Samples and Guidelines from Ronne Rogin, Treasury Department

WHAT IS SECTION 508 AND WHAT IS ACQ'S ROLE AND RESPONSIBILITY?

Section 508 of the 1973 Rehabilitation Act was amended in 1998 to require Federal agencies to ensure that any time the Government maintains, procures, develops, or uses electronic and information technology that it is accessible to persons with disabilities. The enforcement provision of Section 508, i.e., the right to file private lawsuits in Federal district court, applies only when a Federal agency procures goods and services. Federal employees are covered by the provisions of Sections 508 as well as members of the pubic seeking information from the government, unless an undue burden can be established. Undue burden is defined as a "significant difficulty or expense. The law is not retroactive; it is enforceable only for items/services procured after the effective date of June 21, 2001.

WHO'S WHO

Department Coordinator Diana Hynek (202) 482-0266
dhynek@doc.gov
 
Agency Coordinator Roger Brown (301) 457-6198
Roger.D.Brown@census.gov

This section is intended to clearly define the roles of the program areas and Acquisition Division's role for monitoring Section 508 buys.

ACQ Division:

  • Looks at the market research done by the program areas to see if they have documented accessibility products.


  • Informs program areas that the threshold under $25,000 purchases placed on the government credit cards will not exceed 2003.

Program Areas:

  • Provides a Memorandum for Waiver from Michael P. Palensky and Richard W. Swartz. If the economic analyst product is 508 compliant and cost more than funds budget for, the program area can submit an undue burden wavier to DoC. This waiver/approval process should not stop the procurement process. Copies of the memo should be filed for auditing purposes.


Source: U.S. Census Bureau
Acquisition Division

Last Revised: October 15, 2012