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Using Metrics To Measure Contractor Performance

The document discusses metrics for measuring contractor performance and outlines regulatory requirements for government oversight after a contract is awarded. It examines differences in metrics for supplies/equipment versus services and explores various categories of deliverables and performance metrics used by commercial firms and the DoD to evaluate contractors. The conclusions recommend that performance metrics should measure program results, focus on customer satisfaction, and be able to project outcomes through continuous improvement.

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Nikhil Tripathi
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45 views13 pages

Using Metrics To Measure Contractor Performance

The document discusses metrics for measuring contractor performance and outlines regulatory requirements for government oversight after a contract is awarded. It examines differences in metrics for supplies/equipment versus services and explores various categories of deliverables and performance metrics used by commercial firms and the DoD to evaluate contractors. The conclusions recommend that performance metrics should measure program results, focus on customer satisfaction, and be able to project outcomes through continuous improvement.

Uploaded by

Nikhil Tripathi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Using Metrics to Measure

Contractor Performance:

Marshall Engelbeck
Graduate School of Business & Public Policy
Naval Postgraduate School

Graduate School of
Business & Public Policy
Research Questions
1. What is the regulatory foundation for
Government oversight of contractor
performance after contract award?
2. Is there a difference between
contracting for supplies/equipment and
services? I
3. Is there a difference between the
metrics used to evaluate contractor
performance for delivering
supplies/equipment and services?
4. Is there a difference in the type of
metrics valued by the User, PMO, PCO II
and ACO/COR?
Regulatory and Philosophical
Underpinnings of Performance
Measurement
• Government Performance and Results Act
of 1993 M R
E E
• National Performance Review (1993)
A S
• Adoption of Scorecard Approach to S U
Measuring Business Strategy (2002)
U L
– Financial Perspective
R T
– Customer Perspective
– Internal Business Perspective
E S
– Learning and Growing Perspective
You Get What You Measure!*
• You Should … “State Objectives in
Terms of Measurable Results.”
– People Are Better Motivated With
Measurable Objectives Than Without Them.
(Schleh 1961)

• “If You are Not Measuring You are Not


Managing-You Are Just Along for the
Ride.” **
* Marshall W. Meyer, Rethinking Performance Measurement, Cambridge University Press,
UK, 2002, 4.
** Luke Campbell and Brian Koster, “Software Metrics: Adding Engineering Rigor to a Currently
Ephemeral Process,” briefing presented to the McGrummwell F/A-24 CDR course, 1995
Performance Measurement
• Process of Assessing Progress
Toward Achieving Predetermined
Goals
• Includes Information on,
– Efficiency Resources are Transformed
into Quality Outputs
– Extent to Which Customers are
Satisfied
– Effectiveness of Government Operations
in Terms of Specific Contributions to
Program Objectives
James B. Whittaker, Presidents Management Agendas: Balanced Scorecard Approach, Management Concepts,
Vienna, VA, 2003,p 259
Acquisition Program Baseline
(DoD 5000 Series Regulations)

• User Performance Requirements


• Schedule Requirements
• Interoperability
• Supportability
– Cost of Ownership
• Applicable Environmental Requirements
• Estimate of Total Program Cost
5000.2-R dated April 5, 2002, Paragraph C 1.4.
ACQUISITION STANDARDS
“TO DELIVER ON A TIMELY BASIS THE BEST
VALUE PRODUCT OR SERVICE TO THE CUSTOMER
WHILE MAINTAINING PUBLIC TRUST AND
FULFILLING POLICY OBJECTIVES.”

FULFILL PUBLIC
SATISFY CUSTOMER POLICY OBJECTIVES
IN COST, QUALITY,
AND TIMELINESS

CONDUCT BUSINESS WITH


INTEGRITY, FAIRNESS AND
MINIMIZE ADMINISTRATIVE OPENNESS
OPERATING COSTS

FAR 1.102
Categories of Deliverables
• Initial Delivery of Supplies and Equipment
• Installation Support
– Food Service
– Installation Maintenance
• Support Weapon Systems and Other
Mission Capabilities
– Component Repair 60%
– Sustaining Engineering Services
– Advisory Services
– Research and Development
– Logistics/Sustainment Services
• Depot Level Maintenance
• Depot Level Support of Computer Systems
Categories of Contractor Deliverables
Spectrum of Tangibility

• Supplies TANGABLE

• Equipment
• Research and Development
• Services
– Facility Maintenance
– IT Services
– Logistics Support and Services
– Personnel Services INTANGIBLE
Larry R. Smeltzer and Jeffery A. Ogden, “ Purchasing Professionals’ Perceive Differences Between
Purchasing Materials and Purchasing Services,” Journal of Supply Chain Management, Feb. 02
Top Ten Categories

CATEGORIES/(PERCENTAGE) RELATIVE
IMPORTANCE
– Quality and Process Control (24.9) 1
– Continuous Improvement (9.2) 2
– Facility Environment (8.2) 2
– Customer Relationship (8.2) 2 No
– Delivery (8.1) 2 Statistical
Difference
– Inventory and Warehousing (7.0) 2
– Ordering (5.8) 2
– Financial Condition (5.5) 2
– Certifications- ISO (3.6) 3
– Price (3.6) 3
Penny M. Simpson and Judy A Siguaw, “Measuring the Performance of Suppliers: An Analysis of Evaluation Processes,”
Journal of Supply Chain Management: A Global Review of Purchasing and Supply, Institute of Supply Management, February
2002, Tables III and IV, pages 13 - 14
How Commercial Firms
Measure Services

• Customer-Provider Relationship
– Call Center Metrics
• Customer Satisfaction Metrics
– Overall Customer Satisfaction
• Operations
– Total Cost of Ownership
– Occupancy Cost
• Special Interest
– Number of Contracts With Small Businesses
Laura H. Baldwin, Frank Camm, and Nancy Moore, Strategic Sourcing: Measuring and Managing Performance,
RAND DB-287-AF, Santa Monica, CA.. 2000, Appendix B
Conclusions
1. GPRA Confirms Need to Design
Performance Metrics that Measure
Program Results
2. Customer Satisfaction Should be the
Number One Standard Metric
3. There is a Difference Between Metrics
Used to Evaluate Contractor
Performance between Supplies/Equip.
and Services?
4. There Should be Relatively Few Key
Performance Indicators (KPIs)
Conclusions
5. Metrics Selected Should be able to
Project Subsequent Outcomes (Results)
6. Metrics Selected Should Facilitate
Continuous Improvement
7. Metrics Selected Should Cross-
Functional Boundaries
8. Should Provide Capability to Compare
Contractors
9. Metrics Selected Should be Used to
Award/Penalize Contractors

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