Effective Contract Management

Indicates how to manage contracts.
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    December 1969
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WORKSHOP IN EFFECTIVE CONTRACT MANAGEMENT CalACT Spring Conference April 21, 2010 Roy Glauthier Transportation Planning and Policy v/fax: 949.650.5956 Email: [email protected] Workshop in Effective Contract Management CalACT 2010 Spring Conference WORKSHOP IN EFFECTIVE CONTRACT MANAGEMENT Workshop Goal: To share tips, techniques and approaches that can improve the effectiveness and experience of contracting for public transit management and operations. Workshop in Effective Contract Management CalACT 2010 Spring Conference Workshop Outline      Sources of Procurement Guidance Terminology Contracting Market Should You Go To Bid? Procurement Timeline  Procurement Process – – – – RFP Development Contract Elements SOW Elements Interviews & BAFO    Transitioning Monitoring Contractor Performance Managing Your Contractor Workshop in Effective Contract Management CalACT 2010 Spring Conference Primary Sources for Procurement Guidance:  Federal Transit Administration Best Practices Procurement Manual [do not print…. 694pp] FTA Triennial Review Workbook _6037.html Available at: http://www.fta.dot.gov/funding/thirdpartyprocurement/grants_financing   http://www.fta.dot.gov/funding/oversight/grants_financing_10924.html Your agency‟s procurement policies. Workshop in Effective Contract Management CalACT 2010 Spring Conference Critical Terminology  Bid versus Competitive Procurement -- Bid requires very clear specifications -- Competitive Procurement is intended to permit competition on quality and other factors, as well as on price Workshop in Effective Contract Management CalACT 2010 Spring Conference Critical Terminology Types of Procurements*:  Professional Services Agreement  Sole Source  Negotiated Procurement  Competitive Procurement *Depending on agency procurement policies Workshop in Effective Contract Management CalACT 2010 Spring Conference Overview of the Contracting Market    Major National Firms Regional Firms Local Transportation Firms Focus on performance-based specifications Clearly indicate criteria for selection Seek broadest possible participation in process Workshop in Effective Contract Management CalACT 2010 Spring Conference Step 1: Should you go to out to bid or not?    What does your existing contract say about contract term and options? What objectives will be achieved by a competitive procurement? Could these be achieved through negotiations with existing contractor? Workshop in Effective Contract Management CalACT 2010 Spring Conference Step 2: Determining Your Procurement Timeline  Request for Proposals Issued October 1, 2010  Voluntary Pre-proposal Conference October 13, 2010  Deadline for Submission of Questions October 15, 2010  Addenda and Answers Distributed October 22, 2010  PROPOSALS DUE 5:00 pm PDT October 29, 2010  Evaluation and Interviews November 1-24, 2010  Contract Award December 1, 2010  START OF SERVICE January 1, 2011 Workshop in Effective Contract Management CalACT 2010 Spring Conference Step 2: Determining Your Procurement Timeline Critical Considerations in Setting Timeline:  Acquisition and Preparation of    Vehicles Facilities Computers and software, other equipment Review and approval of RFP document by management, legal counsel, risk management, etc. Council/governing body approval of RFP, selection, award Holiday periods Governing Board meeting schedule Coordinating contract timing to fiscal year  Internal City/Agency Reviews and Approvals       Practical Considerations  Others? Workshop in Effective Contract Management CalACT 2010 Spring Conference Step 3: Understanding the Complete Procurement Process Guidelines:  Transparency  Define your process, then follow it  Fairness, level playing field  Establish Sole Point of Contact  Win/Win/Win -- Agency, Contractor, Public Workshop in Effective Contract Management CalACT 2010 Spring Conference Elements in the Procurement Process         RFP development RFP release/publication Preproposal conference & question period Addenda/clarifications Proposal submission Evaluation Interviews BAFO/negotiations         Selection/staff report Award Contract finalization Transition Start-up Month One Monitoring & management Repeat ? Workshop in Effective Contract Management CalACT 2010 Spring Conference Developing Your Request for Proposals   Start with a good sample RFP… or several Why reinvent the wheel? Sample: City of Rosemead, Rosemead Transit [procurement conducted Dec „07 – Feb „08] Workshop in Effective Contract Management CalACT 2010 Spring Conference Major Parts of RFP Document      Solicitation Terms of procurement, evaluation criteria and protest process, checklist of proposal contents Sample contract Scope of Work Attachments -- Anticipate bidders‟ requests: Copies of monthly reports, present wage scales and benefits, fleet schedule and mileages, detail on provided equipment, facilities and furnishings Workshop in Effective Contract Management CalACT 2010 Spring Conference Contract vs. Scope of Work ?? Contract Legal structure of relationship between the contracting agency and the contractor firm  Scope of Work Description of the services, equipment, and/or facilities to be provided under the contract  Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Contract Document  Term of contract and any option periods – – – Clearly state base term of contract Specify any option periods and how these may be exercised [“at sole option of the City” or “upon mutual agreement”] Specify option term price [specific price or CPI limit] Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Contract Document   Term of contract and any option periods Termination for cause and for convenience Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Contract Document    Term of contract and any option periods Termination for cause and for convenience How compensation will be paid – – – – Form of compensation Documentation needed for payment Timing of payments Payment for additional and out-of-contract services Workshop in Effective Contract Management CalACT 2010 Spring Conference Form of Compensation    Fixed Rate [per Rev Vehicle Hour, RVM, passenger] Fixed and Variable – usually fixed payment per month for fixed cost reimbursement plus specified amount per hour or mile operated during billing period Pass-through or Cost reimbursement – useful for cost items out of contractor‟s control [e.g. fuel, facility rent, public phones] Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Contract Document      Term of contract and any option periods Termination for cause and for convenience How compensation will be paid Insurance Requirements Emergency response: – – Expected actions Terms of compensation Workshop in Effective Contract Management CalACT 2010 Spring Conference And, in case your project uses Federal funds….. Workshop in Effective Contract Management CalACT 2010 Spring Conference Applicable Federal Clauses – See FTA Triennial Review Workbook [http://www.fta.dot.gov/documents/06_Procurement_TriennialReview_FY2010_WKBK.pdf Exhibit 6.1 A. Required Third-Party Contract Clauses B. Required Certifications, Reports and Forms C. Other Required Items Exhibit 6.2 Applicability of Third-Party Contract Clauses [breaks down applicability by type of procurement & dollar value] Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Scope of Work  Definitions – – – Any terms used in compensation [e.g. vehicle revenue hours and miles] Acronyms [NTD, FTA, GPPV] Service terms: door-to-door, curb-to-curb, ontime, dwell time, missed trip, no-show Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Scope of Work   Definitions Description of services to be operated [hours, days, routes, service levels, policies] Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Scope of Work      Definitions Description of services to be operated Performance standards, penalties/incentives, how defined and measured Detailed Responsibilities of Agency and Contractor Staffing: key positions, qualifications, retention/replacement and approval Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Scope of Work -Continued  Specifications for vehicles and equipment to be provided by contractor or supplied by agency – – – – Make, model year, fuel, mileages Replacement schedule or requirements Present condition/ major rebuild history Integrated equipment: radios, MDTs, AVL, annunciators, fareboxes,… Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Scope of Work -Continued   Specifications for vehicles and equipment to be provided by contractor or supplied by agency If DAR, operating details – – – Scheduling software or procedures to be used Present call volumes by hour and day Request policies [DR, advance or subscriptions] Workshop in Effective Contract Management CalACT 2010 Spring Conference Key Elements in Scope of Work -Continued    Specifications for vehicles and equipment to be provided by contractor or supplied by agency If DAR, operating details Fuel cost arrangements Workshop in Effective Contract Management CalACT 2010 Spring Conference Elements in the Procurement Process RFP development                RFP release/publication Preproposal conference & question period Addenda/clarifications Proposal submission Evaluation Interviews BAFO/negotiations Selection/staff report Award Contract finalization Transition Start-up Month One Monitoring & management Repeat ? Workshop in Effective Contract Management CalACT 2010 Spring Conference Interviews     Optional at agency‟s discretion Specify total time and breakdown [e.g. No more than 60 minutes, presentation not to exceed 15 minutes…] Require project manager to participate and limit number on proposer teams If PP allowed, equipment failure does not extend time allowed for presentation. Workshop in Effective Contract Management CalACT 2010 Spring Conference BAFO: Best And Final Offers    Optional Valuable if: – Selection is close – Questions about what is being provided – Specifications need to be clarified May be requested of all proposers or only those in competitive range Workshop in Effective Contract Management CalACT 2010 Spring Conference Transition       Include transition requirements in Scope of Work Initiate transition meetings immediately of award of contract Require participation of on-site managers and responsible superior manager Document agreements reached in meetings If vehicle maintenance/condition involved, consider independent maintenance expert Critical issues: vehicle maintenance and physical condition, transfer of phone lines, access to current employees for information/interviews/training, other? Workshop in Effective Contract Management CalACT 2010 Spring Conference Monitoring Contractor Performance      Review, question and refine monthly reporting; Establish regular monthly review meeting with standing agenda; Document meeting discussion, follow-up & action items; If performance standards, penalties or incentives included in contract, monitor and follow through; and Conduct annual review of contractor performance. Workshop in Effective Contract Management CalACT 2010 Spring Conference Managing Your Contractor      Work to develop a partnership … both parties must succeed; Manage, don‟t micro-manage; Don‟t get between company and its employees; Strive for consistency and clear direction; and Be familiar with actual operations, employees, services. Workshop in Effective Contract Management CalACT 2010 Spring Conference Expert Contracting Panel     George Sparks, Pomona Valley Transportation Authority Mark Wall, Mark Wall Consulting Sandi Schmidt, Transportation Concepts Ron Bushman, Veolia Transportation Workshop in Effective Contract Management CalACT 2010 Spring Conference