plans for hiring, training, and retaining workers; and the qualifications of their management team. Only during the second phase are bid prices evaluated, preferably with the help of an internal cost analysis to identify realistic bids.

Contract Structure

Nearly half the general managers urged specificity in defining contractor duties and responsibilities in the contract documents. They reported that defining as many expectations as possible at the outset and stipulating them in the agreement is essential for avoiding disputes. They also noted that the contract should establish a clear mechanism for making changes to the contract.

More than 40 percent of the general managers advised the inclusion of well-defined performance standards in the contract. Many urged rewards when standards of performance are exceeded, but combined with penalties for poor performance. Some recommended the inclusion of specific contract provisions to reduce the potential for performance problems, such as the stipulation of minimum wage rates to attract and retain quality drivers. One of the general managers reported that his agency does not specify wage rates, but stipulates the use of current areawide rates in bid proposals and justification for lower assumed wage levels.

Overseeing and Working with the Contractor

Monitoring of contract performance ranked third among all the areas of advice offered by the general managers. They noted the importance of clearly communicating the agency’s intention to monitor the work and to hold the contractor responsible for meeting agreed-upon standards. Attentive monitoring of performance was also identified as important in nearly all the follow-on interviews with general managers.

In addition, recognizing that circumstances and needs can change, the general managers reported that beyond establishing a formal mechanism for making changes in contract agreements, it is important to maintain clear channels of communication with the contractor. Here again, the follow-on interviews suggested the importance of cultivating the relationship with the contractor by both communicating expectations and holding the contractor to those expectations in a fair and consistent manner. One general manager interviewed found that informal weekly meetings with contractor staff helped identify and address incipient problems and build a stronger team relationship. Examples of efforts



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