Seven Steps
to performance-based acquisition
    
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step 5

Decide How to Measure and Manage Performance
Have the contractor propose the metrics and the quality assurance plan.

One approach is to require the contractor to propose performance metrics and the quality assurance plan (QAP), rather than have the government develop it. Learn more about QAPs. This is especially suitable when using a SOO because the solution is not known until proposed. With a SOO, offerors are free to develop their own solutions, so it makes sense for them to develop and propose a QAP that is tailored to their solution and commercial practices. If the agency were to develop the QAP, it could very well limit what contractors can propose.

As the integrated project team considers what is required in a QAP, it may be useful to consider how the necessity for quality control and assurance has changed over time, especially as driven by acquisition reform. In short, QAPs were quite necessary when federal acquisition was dominated by low-cost selections. Think about the incentives at work: To win award but still protect some degree of profit margin, the contractor had to shave his costs, an action that could result in use of substandard materials or processes. With best-value selection and an emphasis on past-performance evaluation and reporting, entirely different incentives are at work.

The regulations have changed to some degree to reflect this reality. FAR 46.102 provides that contracts for commercial items "shall rely on a contractor's existing quality assurance system as a substitute for compliance with Government inspection and testing before tender for acceptance unless customary market practices for the commercial item being acquired permit in-process inspection."

Air Force Instruction 63-124 (1 August 2005) addresses the concept of a performance plan and metrics:

1.4.4. A Performance Plan. The performance plan is an evolving document whose development begins with acquisition planning, and finalized as the acquisition progresses. The members of the multi-functional team sign the performance plan. Award Fee plans containing the elements below qualify as the performance plan. The plan identifies:

1.4.4.1. Objective(s) in having the service provided, i.e., to provide quality housing maintenance to military members.

1.4.4.2. Results the multi-functional team is striving to achieve in managing the acquisition, e.g., cost savings, efficiencies, and improved customer service.

1.4.4.3. A distribution of the roles and responsibilities among the multi-functional team members.

1.4.4.4. A strategy, methods and tools the multi-functional team will use to assess the contractor's performance against the performance thresholds, measurements, metrics, and incentives identified in the contract. Performance thresholds must be measurable in terms of quality and timeliness of performance.

1.4.4.5. A management approach, methods and tools the multi-functional team will routinely use to validate the objectives and goals identified as part of the Performance Plan, i.e. benchmarking, etc.

1.4.4.6. An incentive plan may be the management approach, methods and tools used to validate the objective and goals of the multi-functional team.
1.4.5. Performance metrics are to be used to track contractor progress towards meeting stated performance objectives. The multi-functional team in assessing contractor performance validates that the performance metrics align with the performance-based work statement and overall mission support objectives.

Remember the following key aspects. Performance metrics are negotiable and, wherever possible, address quality concerns by exception not inspection. Also, when contractors propose the metrics and the QAP, these become true discriminators among the proposals in best-value evaluation and source selection.

What are the requirements for a quality assurance plan? See the chapter on Quality Assurance Plan and Surveillance in OFPP's Best Practices Guide View the Software Quality Assurance Plan (SQAP) prepared by MIT's Center for Space Research for NASA's George C. Marshall Space Flight Center View the short, to-the-point QAP for Brandeis Universitypis Peak Project

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