ITES-2S :: Lockheed Martin Resource Guide

ITES-2S Transforming the Army One Task at a Time

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Lockheed Martin Resource Guide

The principle concept for performance based contracting is to describe the services you are seeking in terms of the outcome you want to attain. To assist you in thinking in terms of business objectives and benefits choose an ITES 2S technical area to see associated objectives and benefits which the PWS or SOO might address.

Technical Area:

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The next step in developing a Performance Based Contract is to define measurable performance metrics. Outcomes are generally high level and often have outside influencers such as organizational culture, external interfaces or political constraints over which the vendor has no control. The contract’s overarching objectives and benefits must be decomposed to measurable outputs for the services rendered. The concept is to measure contractor performance by measuring (the least number) Key Performance Indicators (KPI) of outputs which logically lead to desired outcomes. The standard for the measurement must be fully defined. An example of measures and metrics is illustrated in the spread sheet below.

Measures and Metrics
Key Performance Indicator	Frequency	Defined Measure	Metric	Acceptable Level of Quality	Incentives Disincentives
Wireless access point availablity	Monthly	An access point is “available” only when it is properly running and available to clients	N = # of Access Points Total Available Minutes (TAM) = Total number of days in a reported month multiply by 1440 x N Scheduled Downtime (SD) = Cumulative unavailable minutes for all APs due to scheduled downtime events Outage Minutes (OM) = Total number of minutes all APs were not available Availability Percentage (AP) = percentage of availability of all Access Points within last month. AP = ((TAM-SD)-OM) / (TAM-SD) x100%	Maintain availability for all Access Points at 99% or better	For each 1% wireless access falls below ALQ decrement monthly invoice by .05%
Service Restoration Times for Critical Network Outage	Quarterly	Time to restore network service following identification of a critical outage. Critical outage is defined as affecting VIP end-users or impacting > 20 users.	A = # of Critical Outages exceeding 4 hours B = # of Critcal Outages Availability Percentage (AP) = percentage of Critical Outages exceeding > 4 hours. AP = A/B	92% of critical outages closed within 4 hours	The service restoration time for critical outages is worth 35% of the award fee. If greater than 92% of the calls are closed within 2 hours, the full 35% is awarded.
Essential Applications Down	Weekly	Maintain availability for xx designated essential applications and server services.	The measurement where an interruption of service, server outage and/or the unavailability of a designated essential application is counted as one Down Event. Consolidated trouble call reports will be used calculating the number of Down Events per week.	< five (5) Down Events per week	This measure is considered in making the discretionary award fee determination
First Call Resolution	Annually	Problem is resolved/fixed by the Help Desk on the initial call.	N = # of Help Desk Calls in scope of the contract NX = # of Help Desk Calls in scope of the contract escalated beyond first call First Call Resolution (FCR) = percentage of Help Desk calls resolved/fixed on first call FCR = (N - NX) / N x 100%	> 75% First Call resolution.	Each +/- 5% of FCR impacts 5% of the total award fee up to +/- 25%.
Delivery of Project Plan	One-time	Delivery of Project Plan in final form.	Due Date of final Project Plan Actual Date of Plan Delivery	Comparison of scheduled delivery date to actual delivery date.	A penalty of 2% of fee will be accessed for each 5 business days the plan is delayed. An award of 5% of fee will be provided for delivery 30 or more days early.

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When an acceptable level of performance is not delivered, the government should require a corrective action plan including a revised schedule, and lessons learned documentation with a risk mitigation plan to preclude repeat occurrence. Corrective actions may include more frequent or more detail monitoring. Corrective action plans are designed to ensure needed government oversight and additional vendor efforts are in place until performance returns to acceptable levels. Sample plans can be found in the reference links.

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Acceptable, unacceptable and superior performance must be defined. In the example from #2, Acceptable Levels of Quality (ALQs) have been defined for each metric as a formula. Acceptable performance can also be defined in narrative formats. However defined, the standards and methodology for collecting and determining the performance must be clear and unambiguous.

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