With regard to overall approach to contract performance management, the integrated project team should plan to rely less on management by contract and more on management by relationship. At its most fundamental level, a contract is much like a marriage. It takes work by both parties throughout the life of the
relationship to make it successful. Consider, for example, the public-private partnership that was the Apollo Program. Other, more recent examples exist, but they all share the same common characteristics:
- Trust and open communication
- Strong leadership on both sides
- Ongoing, honest self-assessment
- Ongoing interaction
- Creating and maintaining mutual benefit or value throughout the relationship
There are several means to shift the focus from management by contract to management by relationship. For example, plan on meeting with the contractor to identify ways to improve efficiency and reduce the effect of the "cost drivers." Sometimes agencies require management reporting based on policy without considering what the cost of the requirement is. For example, in one contract, an agency required that certain reports be delivered regularly on Friday. When asked to recommend changes, the contractor suggested that report due date be shifted to Monday because weekend processing time costs less. An example is requiring earned-value reporting on every contractual process. For tasks of lesser risk, complexity, and expense, a less costly approach to measuring cost, schedule, and performance can be used. This type of collaborative action will set the stage for the contractor and government to work together to identify more effective and efficient ways to measure and manage the program.
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Another effective means is to establish a Customer Process Improvement Working Group that includes contractor, program, and contracting representatives. This works especially well when the integrated project team's tasks migrate into contract performance and they take part in the working group. These meetings should always start with the question, are we measuring the right thing?
For major acquisitions, the team can consider the formation of a higher-level "Board of Directors," comprised of top officials from the government and its winning partner, with a formal charter that requires continual open communication, self-assessment, and ongoing interaction.
The intent to "manage by relationship" should be documented in a contract administration plan that lays out the philosophies and approach to managing this effort,
placing special emphasis on techniques that enhance the ability to adapt and incorporate
changes.
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