1 1

Breakout Session E03 Daniel Jacobs, CPCM, CMC, Fellow; Chairman/CEO, The Federal Market Group; Chairman, Subcontract Management Institute (ScMI); Board of Advisors Lenn Vincent (RADM, USN Ret.), Fellow, Industry Chair, DAU; Vice Chairman, ScMI; Board of Advisors Tom Reid, CPCM, Fellow, Chief Problem Solver, Certified Contracting Solutions, LLC; President, ScMI Rob Burton, Partner, Venable LLP.; Board of Advisors Bonnie Ross, Managing Partner, The Federal Market Group; VP/Secretary/Chief Marketing Officer, ScMI

Managing Subcontracts for Peak Performance: A Proactive, Problem-Avoidance Approach to Subcontract Management

Tuesday, December 15 1:45pm – 3:00pm

2 2

1. Introductions/Subcontract Management Overview, Introduction of panel members, learning objectives, brief overview of ScMI. Moderator - Lenn Vincent 2. Subcontract Management Plan, SOW/PWS consistent with Prime CWBS (Baseline) Tom Reid 3. Selective flow-down clauses; maintain commercial, NDI status Rob Burton 4. Value of QASP - Meetings, Reports, Inspection; Subcontract Closeout Dan Jacobs 5. Summary Bonnie Ross

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

AGENDA

3 3

PANEL MEMBERS Lenn Vincent, Vice Chairman ScMI - RADM USN (RET); Industry Chair, DAU; Past National President NCMA; Director, Procurement Round Table (PRT); Formerly Commander, Defense Contract Management Command (DCMC); Formerly Commandant, Defense Systems Management College (DSMC); NCMA Board of Advisors Tom Reid, President ScMI – President, Certified Contracting Solutions; Former NASA Contracts Attorney; Former General Counsel Staff, Lockheed Martin; Member NCMA; former member, Board of Directors, NCMA Robert Burton, ScMI Trustee - Partner, Venable Law; Formerly, Administrator, the Office of Federal Procurement Policy (OFPP); Director, Procurement Round Table (PRT); NCMA Board of Advisors. Dan Jacobs, Chairman ScMI - Chairman/CEO, The Federal Market Group (FMG); Past National President NCMA; Chairman Emeritus, Contract Management Institute (CMI); Director, Procurement Round Table (PRT); NCMA Board of Advisors Bonnie Ross, VP /Secretary/Chief Marketing Officer ScMI - Managing Partner Capture Strategies, The Federal Market Group; Registered Lobbyist, Member NCMA

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

4 4

You want to increase your competitive advantage, realize greater profitability, and enhance your value proposition?

The learning objectives of this session are to heighten your awareness of the importance of properly managing subcontracts. Attendees will learn best practices as identified by ScMI.

This is an information-packed presentation that focuses on a proactive, problem avoidance approach to critical phases in the subcontract management process.

A distinguished panel of subject matter experts including a former Commander of DCMC, a former Administrator of OFPP, three Directors of the Procurement Round Table (PRT) and others.

LEARNING OBJECTIVES

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

5

As indicated in the Packard Commission Report (1986), the single greatest risk factor in the acquisition process is the failure of the using activity to adequately define its requirements from the outset. The second greatest risk factor is the failure of the prime contractor to adequately manage its subcontractors with whom the federal government has no privity (no contractual arrangement). Approximately 60-80% of all acquisition dollars are expended with subcontractors.

THAT RISK STILL EXISTS

UNTIL NOW, THERE WAS NO INDUSTRY STANDARD FOR SUBCONTRACT MANAGEMENT OF PUBLICLY-FUNDED CONTRACTS.

The Subcontract Management Institute ScMI™

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

6

ScMI™ CHARTER

The purpose of The Subcontract Management Institute (ScMI™), a non-profit

organization, 501c(3), is to:

1.Establish and maintain the Global Standard for Subcontract Management and

Administration to include the Subcontract Management Body of Knowledge©

(ScMBOK™);

2.Provide the contractor with knowledge, skills, competencies, tools and

techniques to execute subcontracts more effectively, reduce performance risk

and deliver value to company shareholders and taxpayers; and

3.Provide organizations and individuals the opportunity to become certified to

enhance productivity, profitability and their value proposition.

ScMI™ provides prime and subcontractor personnel with the knowledge, skills,

tools and techniques to deliver best value supplies, services and data and reduce

performance risk in the execution of publicly-funded contracts.

Integrates certification standards with qualification standards.

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

7

ScMI™ FACTS Established and maintains the Subcontract Management Body of Knowledge

(ScMBOK©) • Developed and delivers Subcontract Management Certification Program

(ScMCP™) for Subcontract Managers (SCM) and Technical Representatives (TR)

• Certification only when candidate has demonstrated they are Qualified; combines online, classroom and experiential training

• Online Toolbox, Desktop Reference Guide, Performance Support Tools

• Community of Practice maintained for exchange of Best Practices • Program recommended by DOD and State Department to the Commission on

Wartime Contracting as a best practice

• Program briefed to heads of DCMA and DCAA; supports outreach

• Representation in DC, Denver, Los Angeles, Seattle, Brussels, Tel Aviv

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Equivalency Training Provider

8 8

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

BEST PRACTICES

Subcontract Management Plan, SOW/PWS consistent with

Prime Contract Work Breakdown Structure (CWBS – The Baseline) Tom Reid

9 9

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management Basic Project Management Disciplines

•Developing a WBS •Developing a schedule •Having solid BOE’s •Answering the two critical questions for the prime and the sub:

• What is the contract? • How do you know when it is done?

10 10

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Managing Subcontractors

•Sub WBS is subset of prime WBS •Subcontractor selection must be disciplined process. PART OF TEAM!! •Project management disciplines must run throughout the ENTIRE program.

11 11

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Using Interface Control Documentation (ICD)

•Communication of requirements •Achievement of requirements •Baseline documentation that flows through the program and to all team members

12 12

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

BEST PRACTICES

Selective flow-down clauses; maintain commercial, NDI status Rob Burton

13 13

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management Using Commercial Subcontracting

Procedures

•It is a government policy to use FAR Part 12 for commercial items •It is a requirement imposed on primes to use commercial contracting methods. •Prime contracts are covered by the Federal Common Law; Subcontracts are covered by the Uniform Commercial Code.

14 14

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Clauses Cost!!

•FAR Part 12 requires only minimal flow-downs in commercial item subcontracts. •It is a competitive edge because you get better pricing and less administrative burdens with this best practice. •Reducing administrative burdens increases competition

15 15

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Best Practices

•Treat subcontractors as part of the team •Use a compliance matrix at the prime level; do the same for subs •DO NOT fall into trap of flowing down EVERYTHING

16 16

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

BEST PRACTICES

Value of QASP - Meetings, Reports, Inspection; Subcontract Closeout Dan Jacobs

17 17

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Quality Assurance. Means the varying functions, including inspection performed by USG to determine whether a contractor has fulfilled the contract obligations pertaining to quality and quantity. The contractor is responsible for controlling the quality of supplies, services and data. The contractor is responsible for tendering to USG for acceptance only those supplies, services and data that conform to contract requirements. Monitor contractor performance through meetings, reports, and inspection.

The Surveillance Plan sets forth the methods and frequency you will hold meetings, require reports, and conduct

inspections.

18 18

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management QUALITY ASSURANCE SURVEILLANCE PLAN (QASP) CHECKLIST

ACTIVITY COMPLETED 1. Read The Contract ! 2. Baseline the Requirement: a. WBS – Work Breakdown Structure (Scope) (Subcontractor Provides - Based on Master WBS) b. Schedule c. Deliverables d. Costs e. Key Personnel 3. Identify Risks (Critical Path) – Subcontractor Provides. 4. Conduct Subcontract Orientation Meeting with PM Team; Conduct Meeting with Subcontractor. 5. Validate Subcontractor’s QC/QA Processes. 6. Determine what methods you will use to Monitor Performance: a. Meetings; b. Reports; c. Inspection. 7. Prepare & Document QASP.

Subcontract Manager Project Manager

PRIME CONTRACT TITLE/NUMBER SUBCONTRACT TITLE/NUMBER DATE

SUBCONTRACTOR: SUBCONTRACTOR POC:

CONTRACT OFFICE PROJECT MANAGER

19 19

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

1. Master Work Breakdown Structure (WBS)

2. WBS Elements Assigned to Subcontractor

3. Subcontract Schedule (Critical Path with Dependencies)

4. Deliverables/Acceptance Criteria

5. Risk Management Plan 6. Inspection (Type & Frequency) 7. Meetings (Type & Frequency) 8. Reports (Type & Frequency) 9. Documentation 10. Closeout

PRIME CONTRACT TITLE/NUMBER SUBCONTRACT TITLE/NUMBER DATE

SUBCONTRACTOR PRIME PROJECT MANAGER Contact Information PRIME CONTRACT MANAGER Contact Information PRIME SUBCONTACT MANAGER Contract Information TECHNICAL REPRESENTATIVE Contact Information

SUBCONTRACT OFFICE SUBCONTRACTOR PROJECT MANAGER Contact Information SUBCONTRACTOR QUALITY POC Contact Information SUBCONTRACTOR CONTRACTS MANAGER Contact Information SUBCONTRACTOR TECHNICAL REPRESENTATIVE Contract Information

QUALITY ASSURANCE SURVEILLANCE PLAN (QASP) OUTLINE

20 20

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

BEST PRACTICES

Summary

Bonnie Ross

21 21

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Managing Subcontractors

•Sub WBS is subset of prime WBS •Subcontractor selection must be disciplined process. PART OF TEAM!! •Project management disciplines must run throughout the ENTIRE program.

22 22

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

Best Practices

•Treat subcontractors as part of the team •Use a compliance matrix at the prime level; do the same for subs •DO NOT fall into trap of flowing down EVERYTHING

23 23

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management

1. Master Work Breakdown Structure (WBS)

2. WBS Elements Assigned to Subcontractor

3. Subcontract Schedule (Critical Path with Dependencies)

4. Deliverables/Acceptance Criteria

5. Risk Management Plan 6. Inspection (Type & Frequency) 7. Meetings (Type & Frequency) 8. Reports (Type & Frequency) 9. Documentation 10. Closeout

PRIME CONTRACT TITLE/NUMBER SUBCONTRACT TITLE/NUMBER DATE

SUBCONTRACTOR PRIME PROJECT MANAGER Contact Information PRIME CONTRACT MANAGER Contact Information PRIME SUBCONTACT MANAGER Contract Information TECHNICAL REPRESENTATIVE Contact Information

SUBCONTRACT OFFICE SUBCONTRACTOR PROJECT MANAGER Contact Information SUBCONTRACTOR QUALITY POC Contact Information SUBCONTRACTOR CONTRACTS MANAGER Contact Information SUBCONTRACTOR TECHNICAL REPRESENTATIVE Contract Information

QUALITY ASSURANCE SURVEILLANCE PLAN (QASP) OUTLINE

24

MANAGING SUBCONTRACTS FOR PEAK PERFORMANCE:

A Proactive, Problem Avoidance Approach to Subcontract Management ScMI™ BEST PRACTICES

BENEFITS GOVERNMENT Reduces Performance Risk and Contract Costs

Facilitates Best Value Source Selection Standardizes Criteria for Subcontract Key Personnel and Organizations Supports DCMA/DCAA Outreach

INDUSTRY Reduces Performance Risk

Enhances Profitability

Enhances Value Proposition

Facilitates Win Rates for Best Value Source Selections

25 25

The Subcontract Management Institute 3509 Connecticut Avenue NW, Suite 1112

Washington, DC 20008

Ph: 202-594-3147 Fax: 202-594-3148

Contact ScMI™ Today!

For more information: http://www.sc-m-i.org

202-594-3147

DEDICATED TO REDUCING PERFORMANCE RISK IN THE EXECUTION OF PUBLICLY-FUNDED CONTRACTS

Combines Certification with Qualification