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Texas Facilities Commission (TFC) TFC CONTRACT MANAGEMENT
Richard D Ehlert CTCD CTCMProcurement Director
Course Outline amp Objectives Project Management Basics
Negotiation Techniques and Strategies Basics
Contract Management Basics (Framework Overview)
TFC Contract Management
Summary
Project Management Basics
Project Management
Defined as the discipline of defining and achieving specific goals and objectives for temporary and unique efforts by effectively managing and controlling technical performance (ScopeQuality) cost and schedule
Project Management Basics (conrsquot)
Project Life CycleProcess Groups Initiating
Planning
Executing
Controlling
Closing
Project Management Basics (conrsquot)
Project Management Knowledge Areas Integration Management Scope Management Time Management Cost Management Quality Management Human Resources Management Communications Management Risk Management Procurement Management
Project Management Basics (conrsquot)
Project Management Phases Project Initiation
Produce charter commit resources SMART Objectives
Specific Measureable Achievable Realistic Time bound
Project Deliverables Internal External
3 Major Project Constraints Time Budget Quality
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Course Outline amp Objectives Project Management Basics
Negotiation Techniques and Strategies Basics
Contract Management Basics (Framework Overview)
TFC Contract Management
Summary
Project Management Basics
Project Management
Defined as the discipline of defining and achieving specific goals and objectives for temporary and unique efforts by effectively managing and controlling technical performance (ScopeQuality) cost and schedule
Project Management Basics (conrsquot)
Project Life CycleProcess Groups Initiating
Planning
Executing
Controlling
Closing
Project Management Basics (conrsquot)
Project Management Knowledge Areas Integration Management Scope Management Time Management Cost Management Quality Management Human Resources Management Communications Management Risk Management Procurement Management
Project Management Basics (conrsquot)
Project Management Phases Project Initiation
Produce charter commit resources SMART Objectives
Specific Measureable Achievable Realistic Time bound
Project Deliverables Internal External
3 Major Project Constraints Time Budget Quality
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics
Project Management
Defined as the discipline of defining and achieving specific goals and objectives for temporary and unique efforts by effectively managing and controlling technical performance (ScopeQuality) cost and schedule
Project Management Basics (conrsquot)
Project Life CycleProcess Groups Initiating
Planning
Executing
Controlling
Closing
Project Management Basics (conrsquot)
Project Management Knowledge Areas Integration Management Scope Management Time Management Cost Management Quality Management Human Resources Management Communications Management Risk Management Procurement Management
Project Management Basics (conrsquot)
Project Management Phases Project Initiation
Produce charter commit resources SMART Objectives
Specific Measureable Achievable Realistic Time bound
Project Deliverables Internal External
3 Major Project Constraints Time Budget Quality
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Life CycleProcess Groups Initiating
Planning
Executing
Controlling
Closing
Project Management Basics (conrsquot)
Project Management Knowledge Areas Integration Management Scope Management Time Management Cost Management Quality Management Human Resources Management Communications Management Risk Management Procurement Management
Project Management Basics (conrsquot)
Project Management Phases Project Initiation
Produce charter commit resources SMART Objectives
Specific Measureable Achievable Realistic Time bound
Project Deliverables Internal External
3 Major Project Constraints Time Budget Quality
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Knowledge Areas Integration Management Scope Management Time Management Cost Management Quality Management Human Resources Management Communications Management Risk Management Procurement Management
Project Management Basics (conrsquot)
Project Management Phases Project Initiation
Produce charter commit resources SMART Objectives
Specific Measureable Achievable Realistic Time bound
Project Deliverables Internal External
3 Major Project Constraints Time Budget Quality
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases Project Initiation
Produce charter commit resources SMART Objectives
Specific Measureable Achievable Realistic Time bound
Project Deliverables Internal External
3 Major Project Constraints Time Budget Quality
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Planning
Most important phase of the project Scope planning Work Breakdown Structure
divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Resource Planning
Determines what is needed for the project including time people equipment supplies materials etc
Quality Planning Targeting quality standards relevant to a project Three costs associated with quality are
Preventative costs Appraisal costs Failure costs
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Risk Management Planning (conrsquot)
Two types of risk Inherent Risk Accountability Risk
Risk management is the process of identifying quantifying and mitigating project risks
Three criteria used for identifying the level of risk are
Sensitivity Significance Susceptibility
Methods for managing risk Risk avoidance transference mitigation acceptance
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Execution
Organizational structure
Teambuilding Four stages of teambuilding
Forming Storming Norming Performing
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Measuring and Controlling Project Performance Contract Payment Types
Fixed firm price Cost Reimbursement Cost Sharing Time and Materials
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot)
Effective status process Performance Reviews Variance Analysis Trend Analysis Earned Value Analysis
Planned value + Actual cost = Earned value
Corrective Action Change Management
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Project Management Basics (conrsquot)
Project Management Phases (conrsquot) Project Closeout
Two processes during project closeout are Contract Closure Administrative Closure
Steps in closeout Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition (Surplus) Issue final payment Retire contract file Document lessons learned
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies Common Negotiation Philosophies
WinWin Integrative ndash the Statersquos method
WinLose Distributive ndash generally private sector
When to Negotiate in State contracts Competitive Sealed Proposal (RFP) Professional Services Emergency Proprietary DIR TxMAS
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies Three phases of Negotiation
Planning and Preparation Negotiation Settlement and Documentation
Six steps in the Planning Phase Analyze ndash the other parties proposal Establish ndash your objectives Formulate ndash your position Assess ndash the other partyrsquos strengthsweaknesses DefineOrganize ndash the issues Develop ndash your strategies and tactics
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies Ethics in Negotiation
Prohibited negotiation techniques Technical Transfusion Auctioneering Technical Leveling
Characteristics of Effective Negotiators Confident amp assertive Able to plan and offer alternate solutions Good business judgment Able to tolerate conflict and ambiguity Calm and patient Commitment to mutual satisfaction Open minded listener Diplomatic and persuasive
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies
Negotiation Strategies Active listening Use questions wisely Anticipate compromise Use solid data Use silence Avoid emotional reactions Make use of caucuses Pay attention to timing Offer alternatives
BATNA ndash lsquoBest alternative to no agreementrsquo
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies
Breaking down roadblocks during negotiation Focus on interests Defuse emotions Not reacting Change the scope of risk sharing Change the delivery schedule Change the shape of the money
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies
Generational differences Traditionalists ndash born before 1945 prefer communication
through written word put duty before fun and strictly adhere to rules
Baby Boomers ndash born 1946-1964 prefer to communicate in person tend to be workaholics live to work
Generation X ndash born 1965-1980 prefer communication by phone want structure and feedback
Millennials ndash born 1981-2000 prefer to communicate electronically good at multi-tasking entrepreneurial and goals oriented
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Negotiation TechniquesStrategies
Settlement and Documentation Record results and confirm in writing to the other party Follow up with action plan TFC Procurement may issue a final addendum to the
solicitation to document the final negotiated terms and conditions
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Contract Management Basics
Contract Management Framework Plan Procurement Rate and Price Establishment Contract Formation Contract Oversight
Three lsquoOrsquos Approach to Contract Management Outline Operate Oversee
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Contract Management Basics (conrsquot) Contract Manager
Oversees and manages the entire process Project Planning and Budget Monitor Performance Manage Change Approve Payment Contract Closeout
Contract Administrator Oversees contract administration functions
Relationship Management Implementing and Monitoring vendor performance and
assurance of contract compliance Approving Payment Managing Contract Change
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Contract Management Basics (conrsquot) Risk Assessment
Identifying risks Quantifying and analyzing risks Limit abolish and mitigate identified risks
Understand the criteria for a valid contract Offer Acceptance Legal authority Mutuality of obligation Certainty of subject matter Consideration Competent parties
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Contract Management Basics (conrsquot)
Contract Administration Planning Contract Admin Change Management Payment Approval Dispute Resolution Termination Contract Closeout
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Contract Management Basics (conrsquot)
Change Management Three main types
Administrative Substantive Constructive
CM consults with Purchaser re possible changes
CM must have changes documented in writing and agreed to
Purchaser responsible for executing (POCN) Change not valid until POCNChange
OrderAmendment is issued
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Contract Management Basics (conrsquot) Vendor Performance Monitoring
Recurring status meetings Desk reviews Site Visits Reporting SPD VPTS Cancellation for cause or convenience
Contract Closeout Renewal - a planned or systematic change
Must be in writing and executed prior to current term end
Agreed to by both parties Extension ndash additional time needed Closeout ndash contract is complete verify all parties have met
contractual obligations
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Solicitation amp Contract ProcessSolicitation Process - (lsquoOperatersquo)
TFC Procurement program will facilitate the solicitation
There is another training class lsquoTFC Formal Solicitation Processrsquo that covers the formal (gt$25K) specification development and formal solicitation process
There are requirements that you as an end user are expected to comply with during this process please attend if you will require GoodsServices over $25K
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract Management Contract Management - (lsquoOverseersquo)
Post Award Activities
Pre-services meeting is held with awarded vendorNotify HUB Director of all pre-services meetingsReview finalized HSP and review reporting requirements
Report any changes to HSP to HUB Director Review any other issues related to the start of your contract such as
insurance bonds approval background checks etcIssue lsquoNotice To Proceedrsquo
Vendor begins workBackground checks for all vendor employeesTransition plan (if applicable)Using program begins primary responsibility for management of the contract
Create your contract management folderStatus meetingsInvoice approval compliance to contract Corrective Action Plans (if applicable) Vendor Perf Report
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Management is a weighty responsibility ndash you are managing taxpayer funds and the distribution of those funds as payment for goods delivered andor services rendered
You are also responsible for the management of the vendor and for performance measuring and approval of invoices for goods delivered andor services rendered
State of Texas Procurement and Contract Management Guide The State of Texas Procurement and Contract Management Guide is maintained by the
Statewide Procurement Division at the CPA You may have managed contracts at private entities and done a great job however the State
of Texas has certain requirements and obligations necessary to manage State contracts You may already be a certified PMP (Project Management Professional) or a registered
Architect or Engineer or even have vast knowledge of how to manage a project however this does not exempt you from the state of Texas requirements which this guide details
The Procurement and Contract Management Guide can be located at the following link httpswwwcomptrollertexasgovpurchasingpublicationscontract-management-guidephpThere is also a TFC Contract Manual on the TFC webportal under Policies and Procedures Legal
If you manage a contract or project you should be familiar with both of these publications ndashplace a link to them on your lsquofavoritesrsquo on your internet browser
READ IT Much of the information presented today is based upon this guide CTCM certification available
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOverseersquo)
You should schedule a lsquoPre-Constructionrsquo or lsquoPre-Servicesrsquo meeting with your awarded vendor
Discuss the transition to the initiation of the contract Meet key individuals on both sides Set up a proper lsquochain of commandrsquo for the management of your contract Review any specific or special circumstances pertinent to your contract
Discuss background check process ndash all vendors and their subs ndash anyone who steps onto state property to perform work - must complete a criminal background check prior to arriving at the job site
Work with the agency Office of Risk Management (ORM) Tommy Oates Set up a schedule of future meetings with the proper vendor representative to
review contract performance and to discuss ongoing issues You may or may not issue the lsquoNotice to Proceedrsquo at this meeting
The lsquoNotice to Proceedrsquo officially tells the vendor he may start on the project
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Approving Invoices Contract Monitoring
During the execution of the contract you as a Contract Manager may be required to approve invoices that the vendor submits for payment
Invoices must be scrutinized for both accuracy to the terms and conditions associated with the contract (read = at the correct billing rates hourly rates etc) and for accuracy to the goods or services received
Invoices are paid according to the Prompt Payment Act which means a correctly submitted invoice must be paid within 30 days of receipt (AP will timestamp the invoice upon receipt ndash the clock has begun)
You have up to 21 days to reject an incorrect invoice The invoice resubmitted by the vendor will restart the 30 day clock
upon receipt
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOverseersquo lsquoOperatersquo)
Measuring Vendor Performance
There may be instances when the awarded vendor is not performing as expected or is not meeting contract requirements These issues could include any of the following
Invoice errors billing errors Performance issues Failure to meet specifications Incidental problems or issues that may arise
A basic principle of Contract Management is due diligence on measuring performance with your vendor
If you have problems with vendor performance the TFC Contract andor Purchase Order governing the project have terms and conditions that allow for disciplinary measures including
Corrective Action Plans lsquoCurersquo Periods Termination with Default
Be diligent in measuring your vendorrsquos performance and document everything Donrsquot wait until a problem becomes a horror show ndash cure early
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Measuring Vendor Performance (conrsquot) The State of Texas requires agencies to report vendor performance for delegated
purchases (thatrsquos all of TFCrsquos purchases) for contracts in amounts of $25K or greater TFC must report and upload a lsquoVendor Performance Reportrsquo to the SPD Vendor
Performance Reporting System Procurement or your dedicated Contract Specialist will assist in the upload of this
information once you send it to the Purchaser You can also request Procurement to enter a Vendor Performance Report at any
time during the contract to document performance issues or outstanding performance
You as a ProjectContract Manager are expected to work out minor performance issues on your own however DOCUMENT ndash DOCUMENT -DOCUMENT
Once the report is entered the vendor has two weeks to respond with a rebuttal
At the end of a project or services term you should submit a final Vendor Performance Report to Procurement to either enter into the Vendor Performance Reporting System (if a CMBL vendor) or to place in the Procurement file
Documented vendor performance is a reason to Disqualify a vendor lsquos response to a solicitation Use performance as a measuring tool for evaluation purposes
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance ndash Vendor Performance Report (VPR)
FDC Completing a Vendor Performance Report (VPR) is a requirement when you
report the Performance Measures for your project The VPR along with the Performance Measures are returned to your dedicated
Contract Specialist
PREM AND ALL OTHER PROGRAMS When you as a Contract Manager approve the FINAL INVOICErsquo you must select
the radio button on the invoice that asks the question ldquoIs this the final invoice for the POrdquo
This will trigger APS to require you to complete a Statewide Procurement Division VPR
You will not be able to approve the final invoice without completing this form
Procurement or your dedicated Contract Specialist will enter the report into the Vendor Performance Tracking System (VPTS)
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form Developed by the Statewide Procurement Division This is a lsquolockedrsquo form Review of sections you must complete
lsquoBest Valuersquo standard Positive Performance
Comments Negative Performance ndash Requires a lsquoResolution Codersquo
Satisfactory Resolution Unsatisfactory Resolution Comments
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
Procurement will take care of the lsquoDebarmentrsquo issue ndash this is a rarity
lsquoArsquo The selected score reflects that the contractor
that delivered the good or service that is the best value for the good or service because it complied with all the specifications and evaluation criteria identified in the solicitation documents in full compliance of all material terms of the contract and with complete or substantial customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoBrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents in substantial compliance of all material terms of the contract or promptly remedied any instance of non-compliance with the material terms of the contract and with substantial or adequate customer satisfaction
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoCrsquo The selected score reflects that the contractor
delivered the good or service that is the best value for the good or service because it complied with all specifications and evaluation criteria identified in the solicitation documents substantially remedied a majority of the in-stances of non-compliance with the material terms of the contract and with adequate customer satisfaction A vendor that has been placed on an official TFC Corrective Action Plan (CAP) during the current contract term reporting period cannot receive a grade higher than a lsquoCrsquo
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoDrsquo The selected score reflects that the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with substantially all specifications and evaluation criteria identified in the solicitation documents or in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form DebarmentGrade
lsquoFrsquo The selected score reflects the contractor
delivered the good or service that was not the best value for the good or service because it did not comply with all specifications and evaluation criteria identified in the solicitation documents in substantial non-compliance of material terms of the contract and failed to remedy a majority of instances of non-compliance with the material terms of the contract or in a manner that subjects the contractor to debarment
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatelsquo lsquoOverseersquo)
Reporting Vendor Performance (conrsquot)
The Vendor Performance Report (VPR) Form (conrsquot) After the report is uploaded to the SPD Vendor
Performance Tracking System (VPTS) the vendor gets a notice and has ten (10) days to rebut comment or file a formal protest associated with their report Protest can involve legal representation Protest will involve the CPA SPD Agencyrsquos decision on outcome no action typically
required
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatersquo)
TFC Change Order Tolerances
Change Orders for Commission approved Construction and AE Contracts
Construction gt$1M Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
AE gt$500K Single amendment cannot increase by more than 6 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
Services gt$500K Single amendment cannot increase by more than 50 of original amount Aggregate of all amendments cannot increase by more than 50 of original amount Any amendments over these amounts requires Commission approval
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOperatersquo)
Change Management (conrsquot) Renewal vs Re-Solicitation
TFC service contracts are typically awarded for the following terms 2-year initial term 2 1-year renewal periods or 1 2-year renewal period depending upon the service Biennium will determine ending date (831XX)
Renewals are OPTIONS and must be according to the originally awarded terms and conditions (unless otherwise negotiated)
Renewal periods are pre-determined periods of time Renewal periods must be mutual and in writing signed by both parties DO NOT ASSUME THAT THE VENDOR WILL AGREE TO RENEW THE CONTRACT First Step discussion with your vendor re renewal what escalation (if allowed)
negotiated justification preparation
Programs should present a lsquobest valuersquo methodology to determine if it is in the statersquos best interest to renew or re-solicit
Market conditions complexity of the services vendor performance
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned Preparing for your next Solicitation
During management of your contract you should be documenting not only vendor performance but a lsquolessons learnedrsquo journal can also be extremely helpful in developing your next solicitation
This should start in the lsquoevaluationrsquo phase prior to award of the current contract ndash what worked and what did not work when writing the specification in regards to how the vendor community responded
Do you need to tighten up your specs for the next solicitation Do you need to tighten up your minimum qualifications criteria for the next
solicitation You should be reviewing this material and preparing for your next solicitation at least
eight months from the final termination date of the current contract You should be prepared and ready to solicit for complex services 4-5 months from
the final termination date of the current contract This will allow for a sensible solicitation schedule proper evaluation of the
responses proper time to negotiate proper time allowed for contract execution and proper time for the vendor to transition into the new contract to be able to start on the expected start date
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Offsite Property Management
ISSUE SAO Audit concluded that there was improper TFC oversightapprovals on major change
orders and projects the contracted vendor implemented in our offsite properties
RESULT TFC Contract Manager no longer works at TFC
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES
Security Services
ISSUE Tenant agency representatives giving direction to TFC hired Contractor
RESULT Misdirection duplication of effort additional costs frustrations for Contractor tenant
agency reps and TFC Contract Manager
LESSONS LEARNED Set up a proper chain of command and enforce it if it is not followed perhaps by a
verbal then written warning then a Corrective Action Plan (CAP)
= BEST VALUE
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract Management Contract Management - (lsquoOverseersquo)
Lessons Learned
TFC CASE STUDIES Elevator Maintenance
ISSUE Elevators breaking down often and numerous complaints which led the TFC Contract
Manager to investigate and perform follow up inspection on the contracted scheduled maintenance
RESULT When the maintenance appeared to be either performed poorly or missing altogether
the TFC Contract Manager observed video of the inspection areas to observe the contracted maintenance technician performing the contracted services
The contracted maintenance technician was observed reporting to the area and marking the maintenance complete without actually performing the maintenance
Corrective Action Plan (CAP) issued to vendor TFC requested the contractor employee be terminated or removed from the TFC contract
Unencumbered over $40K from contract Services and elevator reliability have improved
LESSONS LEARNED Due diligence is required when you manage a contract and a major part of your job s a
Contract Manager is to provide oversight review scrutiny direction and approvals in a manner that is consistent with looking out for the Statersquos best interest
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementContract Management - (lsquoOverseersquo)
Contract Closeout
Contract is complete verify all parties have met all obligations
Close file dispose of property ndash Surplus
Proactive Contract Managers start the process again NOW ndash with a new RiskNeeds Assessment - for the next solicitation This allows you to
have a working template for the next contract development during the current contract
Will be able to continually update during the current contract will be prepared to solicit on shorter notice and have less to develop when it is
time to solicit
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
TFC Contract ManagementKnow your assigned Contract Specialist
LEGAL SERVICES Martin Blair 463-7829FDC Construction AE
Debra Delaney 463-6870PREM Other
PREMJonathan Saad 463-7055
FDCVeronica Holmes 463-8287
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
Summary Follow the basic guidelines outlined in this training
KNOW the basic roles and responsibilities of Project Management
KNOW the basic tenants of Negotiation techniques and strategies
KNOW when you can and cannot negotiate in State contracts
KNOW and utilize the tools available for Contract Management
ALWAYS ask a TFC Purchaser your program Contract Specialist or Legal Services for assistance when planning and managing your contracts if needed
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
SummaryThis training and other tools are available for review on the TFC webportal
under Procurement Docs
httpportaltfcstatetxus
General Procurement and Database Training
Summarizes basic Procurement statute requirements and options available and reviews use and navigation of the TFC Automated Procurement System (APS)
TFC Formal Solicitation Award and Contract Process
Summarizes the TFC formal (gt$25K) Open Market or lsquoon the streetrsquo solicitation award and contract process
