107 - Introduction to Service Contracts Flashcards
Professional Services
*according to National Institute of Governmental Procurement (NIGP)
Services rendered by members of a recognized profession or possessing a special skill. Such services generally acquired to obtain information, advice, training, or direct assistance.
Professional Services
*according to ABA
-ABA makes a distinction from supplies and construction
“…furnishing of labor, time, or effort by a contractor not involving the delivery of a specific end product other than reports which are merely incidental to the required performance. This term shall not include employment agreements or collective bargaining agreements.”
Examples of Common Service Contracts
-Engineering
-Architectural
-IT
-Legal
-Healthcare/Medical
-Insurance
-Consulting
-Financial Management/Auditing
-Labor
-Training
What is the intent of service contracts?
to allow a state government to broaden or improve its service levels to its citizenry by allocating SMEs in an efficient manner
Alternative Delivery of Services
Finding another way to deliver those services other than through in-house resources.
In other words, not using state employees to deliver the services.
Privatization
Divestiture of both management and assets of a public function to private sector in order to change the status of a function to be privately controlled and owned
Outsourcing
When an organization makes a decision to contract out a product, service, or business process that was previously provided using internal resources.
Economy vs Efficiency
Economy: The view that looks at the cost of providing the service
Efficiency: the perspective of service results
Ex: you can run a race, but a professional runner may be able to do it better and faster.
Service vs Commodity
Service: the purchase of human expert(s) who perform activities and/or deliver a work product
Commodity: akin to buying a “widget”
Elements critical to delivery of service
-Market share
-Availability of human resources
-Qualifications of resources
-Capability of the company to maintain quality control
Factors for sourcing of services
-Staffing availability
-Vendor capability
-Qualifications/experience
Negotiations of service contracts require knowledge of:
-Human resources
-Market conditions
-Project management
-Cost/price analysis
-Performance management
-Economic trends
When writing specifications, you must provide:
-Adequate description of the need for the service
-Intended outcomes
-Performance standards expected in the delivery of the services
Challenges related to Contract Administration and Management
- Vendor Performance and Accountability
- Failure of project manager to document performance issues
- Communication issues
Vendor performance is dependent upon:
- The Statement of Work
- Contractual terms
- Service Level Agreements
- Other performance related documents in addition to the people who are measuring them
The process for monitoring performance should be included in the proposal
Vendor performance is dependent upon:
- The Statement of Work
- Contractual terms
- Service Level Agreements
- Other performance related documents in addition to the people who are measuring them
The process for monitoring performance should be included in the proposal
Importance of Documentation
It is important to document all performance issues, large and small, as they occur, even if there are no consequences that happened in the moment.
-Establishes a formal business-like relationship
-If it isn’t documented, it didn’t happen
Contract Administration Plan
The plan allows for critical components of the contract to be identified and addressed. It should be developed in the pre-award phase and serve as a guide throughout the life of the contract.
-Can be used for contracts involving goods or services since they have higher levels of complexity
Review of the Contract
A detailed discussion of specifications and terms of conditions of the contract
-include contract schedule and identifying potential conflicts the parties may have
Introduction of Key Personnel
Primary representatives from procurement office, user agency, and vendor.
-Specifying role of each rep and identifying decision making authority
Discussion of Expectations
Should reiterate the expectations included in contract and allow for clarification
Payment Procedures
Discussion of the process for payments. If milestone payment is being used, the details of this should be outlined.
Modifications to the Contract
Should include discussion of the process for contract modifications. Specifically, it should be identified who has the ability to approve modifications.
