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22 2. Measures and repeatable measurement procedures TRAINING that relate to the project and stem from plan and/or program objectives. Introduction of PBMC can go relatively smoothly or be a disruptive experience for several reasons, in part, because 3. Outcomes and outputs that can be verified through staff and contractors must be prepared to make a significant measurement and evaluation. cultural change. Agency staff must resist thinking in terms of compliance with method specifications and remember 4. Incentives and disincentives that encourage the con- the contractor is focused on achieving specific results. Both tractor to achieve performance targets. agency and contractor staff must cease to think in terms of bid quantities and come to terms with a new payment scheme that provides negative and possibly positive incen- MONITORING AND EVALUATION OF CONTRACTOR tives for achieving performance standards. Agency staff and contractors may be unaccustomed to the partnering that suc- There are a variety of approaches to monitoring and evaluat- cessful PBMC demands (Science Applications International ing the contractor. The first approach allows the contractor Corporation 2007). to monitor itself through frequent and periodic reporting. The contracting agency normally would require the contrac- Training has a major role to play in bringing about this tor to submit monthly and annual reports on service levels shift and to help ensure that PBMC works. Furthermore, as being achieved. The agency will have to be certain that the an agency accumulates experience with PBMC and under- evaluation is performed properly by joining the contractor takes new contracting efforts, there is a need to communicate when it collects data, conducting random inspections, insist- lessons learned. Some examples of topics on which training ing that the contractor execute a sound QC plan, and ensur- reaps large benefits are as follows: ing that the contractor provides documentation suitable for making payment determinations. Once the agency is confi- The acquisition process dent that the contractor is providing accurate information, Understanding and use of performance measures and the agency does not have to undertake as much oversight. standards The big advantage of this approach is that it is less costly Contractors communicating to subcontractors their than other approaches and the agency communicates that roles and responsibilities it trusts the contractor; partnering is strengthened. Many Agency and contractor implementation of effective would say the evaluation responsibility should not be placed practices and lessons learned on the contractor, however, because the risk of inaccurate How to get the most from partnering reporting increases. QC and QA procedures Evaluation of contractor performance. In the second approach, the agency has primary respon- sibility for determining the performance of the contractor. A disciplined approach is essential, typically an MQA process. In CONTRACT TERM AND RENEWALS addition to periodic inspections, the agency might use random, unannounced inspections. If the agency conducts the evalua- Selecting a desirable contract term and renewal terms is a tions with the contractor present, it promotes good communica- key issue (A Guide for Methods and Procedures in Contract tion and understanding. If the agency conducts the evaluation Maintenance 2002). Some agencies want a short initial term without the contractor present, the arm's-length approach will in case the contractor fails to perform or to be in line with reduce the strength of the partnering relationship. budget realities (Stankevich et al. 2005; Hill et al. 2007). Other agencies would like the initial period to be long enough The third approach is to use an independent third party so that contractors can fully depreciate their equipment and to conduct contractor evaluations; a method that provides therefore offer a lower price. Many agencies lean toward a the most objectivity. It also leaves room for the agency and long first term because the contractor will make decisions the contractor to develop a strong partnering relationship, more in tune with the long-term interests of the agency; for because the burden of evaluation lies with neither the agency example, minimizing life-cycle costs. Recently, the British nor the contractor. There will be an added cost of an inde- Columbia Ministry of Transportation increased its contract pendent evaluator, but it is likely to lead to monetary and term from seven to 10 years (Stankevich et al. 2005). As nonmonetary benefits (Science Applications International implied earlier, VDOT recently decided not to include bridge Corporation 2007). and pavement work in its legislative-mandated interstate