107 - Introduction to Service Contracts

Question 1

Professional Services

*according to National Institute of Governmental Procurement (NIGP)

Answer 1

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.

Question 2

Professional Services

*according to ABA

Answer 2

-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.”

Question 3

Examples of Common Service Contracts

Answer 3

-Engineering
-Architectural
-IT
-Legal
-Healthcare/Medical
-Insurance
-Consulting
-Financial Management/Auditing
-Labor
-Training

Question 4

What is the intent of service contracts?

Answer 4

to allow a state government to broaden or improve its service levels to its citizenry by allocating SMEs in an efficient manner

Question 5

Alternative Delivery of Services

Answer 5

Finding another way to deliver those services other than through in-house resources.

In other words, not using state employees to deliver the services.

Question 6

Privatization

Answer 6

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

Question 7

Outsourcing

Answer 7

When an organization makes a decision to contract out a product, service, or business process that was previously provided using internal resources.

Question 8

Economy vs Efficiency

Answer 8

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.

Question 9

Service vs Commodity

Answer 9

Service: the purchase of human expert(s) who perform activities and/or deliver a work product

Commodity: akin to buying a “widget”

Question 10

Elements critical to delivery of service

Answer 10

-Market share
-Availability of human resources
-Qualifications of resources
-Capability of the company to maintain quality control

Question 11

Factors for sourcing of services

Answer 11

-Staffing availability
-Vendor capability
-Qualifications/experience

Question 12

Negotiations of service contracts require knowledge of:

Answer 12

-Human resources
-Market conditions
-Project management
-Cost/price analysis
-Performance management
-Economic trends

Question 13

When writing specifications, you must provide:

Answer 13

-Adequate description of the need for the service
-Intended outcomes
-Performance standards expected in the delivery of the services

Question 14

Challenges related to Contract Administration and Management

Answer 14

1. Vendor Performance and Accountability
2. Failure of project manager to document performance issues
3. Communication issues

Question 15

Vendor performance is dependent upon:

Answer 15

• 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

Question 16

Vendor performance is dependent upon:

Answer 16

• 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

Question 17

Importance of Documentation

Answer 17

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

Question 18

Contract Administration Plan

Answer 18

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

Question 19

Review of the Contract

Answer 19

A detailed discussion of specifications and terms of conditions of the contract

-include contract schedule and identifying potential conflicts the parties may have

Question 20

Introduction of Key Personnel

Answer 20

Primary representatives from procurement office, user agency, and vendor.

-Specifying role of each rep and identifying decision making authority

Question 21

Discussion of Expectations

Answer 21

Should reiterate the expectations included in contract and allow for clarification

Question 22

Payment Procedures

Answer 22

Discussion of the process for payments. If milestone payment is being used, the details of this should be outlined.

Question 23

Modifications to the Contract

Answer 23

Should include discussion of the process for contract modifications. Specifically, it should be identified who has the ability to approve modifications.