Chapter 2 Principles and Policies of Air Force Service ...

AFI 63-124 PERFORMANCE BASED SERVICE ACQUISITION (PBSA) PHASE I TRAINING BACKGROUND ON IMPLEMENTATION OF AFI 63-124 1 April 1999 Initial Publication 9 February 2004 Interim Change 1 Aug 2005 First Revision

9 Aug 2005 AFMC delayed Implementation 16 Sep 2005 AFMC Implementation COURSE OBJECTIVE Provide the student with the knowledge and skills required to perform QAP duties to ensure the government is receiving the services it contracts for

COURSE OVERVIEW ATTENDEES Quality Assurance Personnel (Mandatory) Multi-Functional Teams (MFT) (Recommended) COURSE MATERIALS: AFI 63-124, 1 Aug 2005 Slides/Note Pages QAP Assessment Documents Acronym/Abbreviations List

Dos & Donts for QAPs CLASS INTRODUCTIONS Name Organization Type of Contract Experience PHILOSOPHY OF PBSA The goal of PBSA is to design mission support

strategies that obtain higher levels of: contractor performance foster synergistic partnerships accommodate changing mission needs leverage commercial best practices http://www.dau.mil/pubs/misc/PBSA_GUIDEBOOK.pdf PBSA PROCESS PBSA begins with the planning of the acquisition by the MFT and consists of

- Acquisition Strategy - Market Research - Write the PWS - Write the PP - Performance Metrics Ensure that performance metrics align with the PWS and mission objectives APPLICATION OF AFI 63-124 This AFI is applicable to all Service

Acquisitions with an annual contract value above the Simplified Acquisition Threshold (SAT) ($100,000.00) (FAR 2.101) APPLICATION OF AFI 63-124 Exemptions in FAR 37.102 (a) (1) Use performance based contracting methods to the maximum extent practicable, except for: - Architect-Engineer Services

- Construction - Utility Services - Services that are incidental to supply purchases DEFINITION OF A SERVICE CONTRACT One which directly engages a contractors time and effort whose primary purpose is to perform an identifiable task rather than furnish an end item of supply

PRINCIPLES OF PBSA Some of the areas in which service contracts are found include the following: - Maintenance, overhaul, repair, servicing, rehabilitation, salvage, modernization, or modification of supplies, systems or equipment - Routine recurring maintenance of real property - Housekeeping and base services PRINCIPLES OF PBSA

- Advisory & Assistance services (A&AS) - Operation of Government-owned equipment facilities and systems - Communications services - Architect-Engineering - Transportation and related services - Research and Development ELEMENTS OF PERFORMANCE-BASED

Requirements are outcome-based Includes performance thresholds Surveillance methods focus on end results, not the process BENEFITS OF PBSA Reduces contract prices and improved performance Contain measurable performance requirements Provides contractor flexibility

BENEFITS OF PBSA Requires less surveillance Motivates contractors to use innovative and cost effective approaches STANDARDS OF CONDUCT ETHICS Government Standards of Conduct Bribery

Gratuities UNAUTHORIZED COMMITMENTS An agreement that is not binding solely because the government representative who made it lacked the authority to enter into that agreement on behalf of the government RATIFICATIONS The act of approving an unauthorized

commitment by an official who has the authority to do so RATIFICATION PROCESS Statement of Facts Management Corrective Action Contracting Officers Actions Ratification Authority RATIFICATION PROCESS If approved

If not approved FREEDOM OF INFORMATION ACT Specifies how federal agencies will make their records available for public review RELEASE OF INFORMATION General Information Advance Acquisition Information

KEY MANAGEMENT DUTIES/RESPONSIBILITIES SENIOR LEADERSHIP WING COMMANDER Appoint a MFT and QAPC to ensure that service contracts meet mission needs and performance based service acquisitions Ensure a service acquisition is designed with performance-based mission support strategy to support contractor performance, partnerships, accommodates

changing a desired mission needs Implement a Performance Management Assessment Program (Quality Program) to satisfy mission requirements Ensure performance management focuses on risk management, cost, schedule and performance baselines CONTRACTING SQUADRON COMMANDER/75 CONS/CC Serves as the Business Advisor to Senior Leadership Providing the health of services acquisitions to senior

leadership annually . Ensure MFT work IAW the FAR, DFARS, AFFARS Ensures the QAPC is appointed and training plans are tailored to local mission and responsibilities Ensures FC/FD receives training for PBSA Ensures consistent guidance to customers, functional areas and ACE office by the QAPC FUNCTIONAL COMMANDER/FUNCTIONAL DIRECTOR (FC/FD)

Squadron commander or Division Chief Identify mission essential services DoDI 3020.37 Assigns primary and alternate QAPs to each requirement Review QAPs assessment records to ensure it is compatible with contract and mission objectives FUNCTIONAL COMMANDER/FUNCTIONAL

DIRECTOR (FC/FD) Receive training from QAPC within 30 days of commencement of duties Provides written notification when QAPs are removed from the contract Notify QAPC when vacating the position QUALITY ASSURANCE PERSONNEL (QAP) QAP must be appointed and trained prior to assuming QA responsibilities (Phase I and Phase

II) Evaluate and document contractors performance IAW the PP on Performance Assessment Report (PAR) Notify the CO of any performance deficiencies on the Corrective Action Report (CAR) Maintain assessment documentation Recommend improvements to the PP and PWS Participate as a member of the MFT CONTRACTING OFFICER

AFFARS MP5346.103 Advises the MFT on PP development Manages the listing of QAP assigned to the contract Issues duties & responsibilities letter to Contractor/QAP MFT advisor for developing incentives/remedies tied to performance objectives/thresholds CONTRACTING OFFICER

AFFARS MP5346.103 Conducts Phase II Training (Contract Specific) Maintains contract file documentation Phase I and Phase II training Provide the following copies to the QAPC PWS, PP, Nomination/Appointment Letters, Contractor QC Plan Letter, Modifications, Contractor and QAP Limitation Letters , Phase II Training Certificates QUALITY ASSURANCE

PROGRAM COORDINATOR (QAPC) Supports the MFT in development of contract requirements Provides Phase I Training to QAP, FC/FD and MFT Members Reviews PWS/PP Processes/maintains/updates QAP appointment and delegation memos QAPC

PHASE 1 Q TRAINING QUALITY ASSURANCE PROGRAM COORDINATOR (QAPC) Maintains a master file and database of contracts & QAP assigned to each contract, and training documentation

Assists in market research efforts of the MFT to determine commercial QA practices Assists in the evaluation of the Contractors QC Plan Provides refresher training annually to ensure the QAPs are up to date on all required changes SEVEN STEPS TO PERFORMANCE-BASED SERVICES ACQUISITION What do I need?

When do I need it? How do I know if its good when I get it? http://www.arnet.gov/Library/OFPP/BestPractices/pbsc/ home.html ESTABLISH THE TEAM Ensure senior management involvement and support. Tap multi-disciplinary expertise. Define roles and responsibilities.

Develop rules of conduct. Empower team members. Identify stakeholders and nurture consensus. Develop and maintain the knowledge base over the project life. "Incent" the team TEAM MEMBERSHIP For complex requirements: All stakeholders impacted by the service, CO, QAPC, QAP, FTR

For less complex requirements: CO, QAPC, QAP, FTR MULTI-FUNCTIONAL TEAM (MFT) Consists of stakeholders that are responsible for acquisition throughout the life of the requirement Duties and Responsibilities of the team includes: Fostering partnerships with industry Provide support to senior leadership (metrics, data, briefings) Researching the commercial market to ensure MFT is

using the most efficient and effective assessment methods Developing, implementing performance-based acquisition strategy MULTI-FUNCTIONAL TEAM (MFT) Manage risk to ensure mission is within cost and schedule constraints Developing, implementing and executing source selection Planning, programming and budgeting

adequate funds Completing and reporting annual reviews IAW the Management and oversight of the Acquisition of Services Process (MOASP) Identifying opportunities to improve performance throughout the life of the contract MULTI-FUNCTIONAL TEAM (MFT) Assessing and managing contractor performance to submit CPARS report Measure performance IAW the PP

Include contractor understands hazardous, safety, security and environmental concerns Approve the deviation authorized in para 1.8 Recommend changes to the PP as required ANLALYZE/DEFINE REQURIEMENTS

Acquisition Planning Link acquisition to mission and performance objectives. Define (at a high level) desired results. Decide what constitutes success. Determine the current level of performance. MARKET RESEARCH The ultimate goal of market research is to

help the acquisition team members to become informed consumers. Information derived from market research will help the acquisition team develop the optimum strategy for meeting the requirement. Performance Based Service Acquisition, a DoD Guide MARKET RESEARCH Take a team approach to market research. Spend time learning from public-sector

counterparts. Talk to private-sector companies before structuring the acquisition. Consider one-on-one meetings with industry. Look for existing contracts. Document market research. DEVELOPING A PWS Steps to Develop the: PWS Services Summary (SS)

Decide how to measure & manage performance PEFORMANCE-BASED REQUIREMENTS PWS defines the requirements in terms of results rather than the method of performing the work. OUTCOMES

Performance-Based Work Statement (PWS) requires: Requirements to be outcome based Outcomes must be measurable Contractor empowered to use best commercial practices and management innovation From: Specifying How To C o n t i n u u m To: Specifying What

WRITING A PERFORMANCE- BASED REQUIREMENT Use precise terms Clear, concise wording Abbreviations and acronyms Ambiguous words and phrases FORMAT Examples are found in the SAF/ACQ Contracting Toolkit http://www.safaq.hq.af.mil/contracting/affars/5337/library5337-pbsa.html

Local electronic format is also available from QAPC FORMAT SECTION I. Description of Services Describes the services required under the

contract Defines those things the contractor would not know from the outcomes alone FORMAT SECTION II. Services Summary (SS) A summary of the performance objective and performance threshold required by

the government in contractor performance SERVICES SUMMARY (SS) Performance Objective PWS Para. Performance Threshold

Report generation from consolidated database to support our Customers 1.1 95% all reports are generated within three days

SERVICES SUMMARY (SS) Captures the overall requirements at the outcome level Birds eye view of what is on the contract FORMAT SECTION III. Government Furnished Property and Services

FORMAT SECTION IV. General Information QAP Responsibilities Hours of Operations, Holidays Contractor Quality Control Plan Requirements Security Issues DODI 3020.37 Identify Mission Essential Services IAW 63-124 para 2.7.1 FORMAT

SECTION V. Appendices Workload Estimates Maps Unique Definitions Listings of References REFERENCES AFI 63-124 para 1.4.3 Cite reference directives (publications, instructions) by specific process/procedure (paragraph, chapter) rather than the entire

publication PBSA PWS Examples Yes, No, Maybe 3.1 Task 1. MESA/PD model Manager: The contractor shall furnish appropriately skilled labor for the management of the XYZ analytical tool called The Model for Electronic Support and Attack (MESA) and Passive Detection (PD). Duties include software engineering support (requirements solicitation and analysis, software design and testing, verification/validation), tool deployment support, and end user training/support. In this role the contractor shall be expected to

and make decisions regarding the design and functionality of MESA and PD models for the government during performance. Deliverables include: Requirements Definition Documents for use in the enhancement/sustainment program (A007) PBSA PWS Examples Yes, No, Maybe 1.2.3.2 Experience. A minimum of six years experience working in fuels is required; three years in base level general fuels, and three years in a fuels managerial capacity. XXX The contractor shall have graduated from Harvard with a BS in Fuels Management.

XXX The contractor shall hire three people to man the service desk XXX The contractor cannot wear crop tops and belly rings. XXX The contractor shall turn off all lights upon leaving the room. XXX The contractor shall turn off all water facets after use. PBSA PWS Examples Yes, No, Maybe Preservation is accomplished only if required by technical orders listed below and only if directed by the CO: XXX. Accomplish engine preservation in IAW TO 1C130B/H-2-4 or1C-130(H)H-2-2 and 1C-130H-2-00GE-00-1. XXX. Remove aircraft storage battery and SCNS battery

if installed, store, and maintain as directed in TO 8D2131 or TO 8D231. XXX. Treat the aircraft as directed in TOs 1117 and 1C130A17 when storage is anticipated. Drained fluids shall be disposed of or reused as follows: MEASURE AND MANAGE PERFORMANCE Rely on commercial quality standards. Have the contractor propose the metrics Select only a few meaningful measures on which to judge

success. Include contractual language for negotiated changes to the metrics and measures. Apply the contract-type order of precedence carefully. Use incentive-type contracts. Consider other incentive tools. PERFORMANCE PLAN (PP) Provides a systematic method to evaluate the services the contractor is required to perform Elements of the Govt PP are not contractual

Should be revised or modified as needed throughout the life of the contract Ensure the government receives acceptable contractor performance against contractual requirements Minimum surveillance of the contractor Tailored to each individual contract PERFORMANCE PLAN (PP) Contract assessment is the Prime responsibility of QAP

Method of surveillance will determine how the QAP will actually evaluate the contractors performance CONTENTS OF THE PP 1. 2. 3. 4. Objective

Results expected by the MFT Roles and responsibilities of the MFT Strategy, methods & tools used to assess the contractors performance 5. Management approach, methods & tools to validate objectives and goals 6. Incentive plan to validate the objective & goals of the MFT The members of the MFT sign the PP METHODS OF

SURVEILLANCE How to Determine what method to use: Criticality of the task Lot size

Availability of QAPs Value of surveillance in relationship to cost or task criticality Commercial practices as a result of market research

PERIODIC SURVEILLANCE Samples selected on other than 100% or statistically random basis Frequency Weekly Monthly

Quarterly RANDOM SAMPLING Appropriate for frequently recurring tasks with a lot size of over 25 Statistically based Assumes the government receives acceptable performance if a given percentage or number of scheduled inspections are found to be acceptable

CUSTOMER COMPLAINTS QAP is the point of contact and must collect all customer complaints and validate immediately Can be used to validate information obtained through other sources Need to be validated r me o t

s Cu ining Tra Customer training Customer Complaint Record (CCR) ONE HUNDRED PERCENT INSPECTION Inspecting the requirement every time it occurs

May be required when Critical impact Occur infrequently Have stringent requirements PERFORMANCE THRESHOLDS Percentage of required conformance Number of allowable

deviations from the performance objective to be considered acceptable PERFORMANCE THRESHOLDS Should rarely be 100% or no deviations Directly affects the cost of the service May be industry-wide standards May be developed by the agency PERFORMANCE ASSESSMENT GUIDANCE

FOR RANDOM SAMPLING PROCEDURES 1. Method of Surveillance: 2. Lot Size: 3. Sample Size: 4. Performance Threshold: a. Performance is acceptable when (Use your percentage or number of deviations on SS) b. Performance is unacceptable when (Use your percentage or number of deviations on SS) 5. Sampling Procedure: (How your random

numbers were pulled). 6. Inspection Procedure: PERFORMANCE ASSESSMENT GUIDANCE FOR OTHER THAN RANDOM SAMPLING 1. Method of Surveillance: 2. Performance Threshold: a. Performance is acceptable when (Use your percentage or number of deviations on SS) b. Performance is unacceptable when (Use your percentage or number of deviations on SS)

3. Inspection Procedures: SAMPLE OF SS AND METHOD OF SURVEILLANCE Para 1.1 Report generation from consolidated database to support our Customers. What is important in each of these requirements? Timeliness, Accuracy, Cost, Customer interaction, down time for the system/application How will I determine if the contractor is performing?

SS Performance Objective Report generation from consolidated database to support our Customers

PWS Para. 1.1 Performance Threshold 95% all reports are generated within three days

Method of Surveillance Valid Customer Complaints for the reporting Timeliness period or submission of report within 3 days

PP SAMPLE OF SS AND METHOD OF SURVEILLANCE Para 1.1 Report generation from consolidated database to support our Customers. What is important in each of these requirements to you? - Timeliness, Accuracy, Cost, Customer interaction, down time for the system/application - How will I determine if the contractor is performing?

SS Performance Objective PWS Para. Performance Threshold

Method of Surveillance Report generation from consolidated database to support our Customers 1.1

95% all reports are generated without errors Valid Customer Complaints for the reporting period

Accuracy PP REMEDIES Negative Incentives Increased assessments CPAR statements Award Fee Monies Inspection of Services Clause

One size doesnt fit all!!! INSPECTION OF SERVICES FAR 52.246-4 This clause is in every service contract Gives the QAPs authority to perform inspections Provides the means for reduction of fee/price (amount = importance to contractor) Allows re-performance if possible at no additional cost

AUTHORITY TO INSPECT Implied Authority Contracting Officer Expressed Authority QAPs Dos & Donts for QAPs

INCENTIVES Positive Incentives (as applicable) Consider award fee and award term incentives Exercising of options Reduced assessment Performance incentive (Bonus on a FFP contract) Newspaper article on merits of contractor Participation in enterprise type meetings Doesnt have to be monetary

SELECT THE RIGHT CONTRACTOR Compete the solution. Emphasize past performance in evaluation. Use oral presentations and other opportunities to communicate Use best-value evaluation and source selection. Assess solutions for issues of conflict of interest.

PAST PERFORMANCE INFORMATION (PPI) Enhance market research Help establish competitive range and make award decisions Provide a basis for discussing progress with contractors Help decide whether to exercise contract options Award decisions on task orders

Aid in developing acquisition strategies Recognize good performers CONTRACTOR PERFORMANCE ASSESSMENT REPORTING SYSTEM (CPARS) Annual requirement Contracts at or over $1,000,000 (Aggregate Total) AF adopted the Automated Navy System (www.cpars.navy.mil)

Information is for Official Use Only MANAGE PERFORMACE Keep the team together Adjust roles and responsibilities Assign accountability for managing contract performance. Add the contractor to the team at a formal kickoff meeting. Regularly review performance in a contract Performance Improvement Working Group.

Ask the right questions. CONTENTS OF LOCAL REQUIREMENTS PACKAGES STANDARD REQUIREMENTS Form 9 with at least three suggested sources Justification & Approval (J&A) if $100K and not awarded competitively (AFFARS 5308.404(b)(2)) Requirement written IAW AFI 63-124 with a Services Summary (SS)

Performance Plan (PP) QAP Nomination Letters (at least one primary and one alternate assigned per contract) A&AS REQUIREMENTS Form 9 with at least three suggested sources Justification & Approval (J&A) if $100K and not awarded competitively (AFFARS 5308.404(b)(2)) Decision Determination Document (DDD) Staff Summary if over $50K Exemptions

Requirement written IAW AFI 63-124 with a (SS) Performance Plan (PP) QAP Nomination Letters (at least one primary and one alternate assigned per contract) GSA REQUIREMENTS Form 9 with GSA Contract # and at least three suggested sources for a multi-source schedule and one source for a single-source schedule Sole Source Justification Document if $100K and not awarded competitively (AFFARS 5308.404(b)(2))

Requirement written IAW AFI 63-124 with a SS Performance Plan (PP) QAP Nomination Letters (at least one primary and one alternate assigned to each contract) QUALITY ASSURANCE POST AWARD CONTRACTORS QUALITY CONTROL PLAN Contractors Plan for Assuring that the

Services conform to the Requirement (Section I) Includes Inspection and Test Criteria Policies, Procedures and Practices Delivery within Allowable Tolerances Quality Planning Procedures QC CONTRACT ASSESSMENT Scheduling Performing

Documenting SCHEDULING ASSESSMENTS Use QA Monthly Schedule Template Schedule monthly assessments of SS items Send a copy to the CO Retain a copy for your records PERFORMING

ASSESSMENTS Perform assessments IAW procedures set forth in the PP per performance assessment guides If assessment methods need to be changed revise the PP and send copies to who has a copy of the original PP DOCUMENTING ASSESSMENTS Document assessments as it is

accomplished Use the Performance Assessment Report (PAR) Template UNACCEPTABLE RESULTS OF ASSESSMENTS If government actions caused the unacceptable performance, take steps to prevent it in the future If not government caused inform the contractors on-site representative

Document on the Corrective Action Report (CAR) and send to the CO If the contractor disputes the results of the assessment refer them to the CO QAP CONTRACT FILE QAP Nomination/Appointment letter QAPs Duties & Responsibilities Letter COs Duties & Responsibilities Letter Phases I & II Training Certificates Memo for Records/Correspondence

Records of Inspection Discrepancy Reports Certification of Services ADDITIONAL TRAINING This training serves as Phase I QAP Training Refresher Training will be provided when changes occur

Your Contract Administrator will schedule you for Phase II Training Contract Specific Training Training is required every time a new contract is awarded QUESTIONS? Student Evaluations

Certificates https://hillnet.hill.af.mil/HAFB/ALC/PK/newcontracting/ Resources/QualityAssurance/QualityAssurance.asp

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