Service Contracts Making Life Better

Service ContractsMaking Life Better

Louis SellersContracts Administration Manager

General Counsel Division


I am not an attorney. I do not give legal advice. I am offering my personal thoughts and opinions, not those

of the Office of the Attorney General. Check with your agency’s attorneys regarding any

contractual or legal issues.


Service Level Agreements (SLA) and milestones in service contracts

Communications in service contracts

Modifying a contract by customs and practice

Unauthorized performance evaluations

Find SLAs That Make Life Better!

Use SLAs that are related to your requirements

Use measurable outcomes

Use SLAs that are reasonable

Use SLAs that are easily understood

What Are Some Factors That Might Be Usable SLAs?

Response time to communications

Response time for an incident

Resolution time for an incident

Billing dispute resolution time

What Are Some Factors That Are More Difficult SLAs?

Courteous communications

Appropriate dress

Professional demeanor

Subject matter expertise

Quality of decisions

Harder to Measure Satisfaction Factors

Helpdesk satisfaction (use surveys and call-back counts)

Report quality (use metrics for content, citations, grammar, formatting)

Personal presentation of staff (define appropriate dress and appropriate language)

Personal interaction with staff (define “easy to work with”, “effective communicators”, etc.)

Milestones That Make Life Better

Place milestones at important points where a change in the process is noticeable:• When contractor arrives• When a report is delivered• When a report is accepted• When a particular service is made available• When an old system is turned off• When a new process is accepted• When a contractor identifies and defines a requirement

Milestones That Make Life Better

At interim points during the creation of a report:• When information gathering is complete• When surveys are distributed• When a draft review meeting takes place• When consensus is reached

At the completion of some reasonable hours of work:• A specific number of hours of design effort• A specific number hours of customer training

Communications in Service Contracts

A successful communicationis one that elicits the desired response.


It is the responsibility of the sender of the message to ensure:

that it is received, that it is understood, and that will elicit the desired response.


Use a variety of communication channels• Face to face

Optimizes many complex discussions• Paper document

Has gravity and is durable• Email

Quick and convenient but may not appear serious• Telephone

Solves complex back and forth issues but may require documentation to memorialize the content

• Smoke signals Vague and now prohibited in most counties


Use a variety of tools• Tables

Quick identification of variance and outliers• Charts

Intuitive understanding of trends and outliers• Flow charts

Clearly show linear and iterative process• Diagrams

Show relationships and complexities


Tables

Company "A" Company "B" DifferenceFY 1996 13,478,700.21$ 8,439,908.99$ 5,038,791.22$ FY 1997 12,071,717.96$ 12,855,686.40$ (783,968.44)$ FY 1998 27,909,134.00$ 8,011,249.32$ 19,897,884.68$ FY 1999 13,268,293.83$ 11,101,040.67$ 2,167,253.16$ FY 2000 17,517,326.40$ 14,826,316.16$ 2,691,010.25$ FY 2001 38,937,770.17$ 19,445,998.47$ 19,491,771.70$ FY 2002 25,075,688.96$ 22,962,825.43$ 2,112,863.53$ FY 2003 22,823,632.00$ 20,909,326.97$ 1,914,305.03$ FY 2004 48,232,635.75$ 26,493,577.06$ 21,739,058.69$ FY 2005 71,029,773.74$ 48,023,534.93$ 23,006,238.81$ FY 2006 52,432,238.65$ 36,532,849.45$ 15,899,389.20$ FY 2007 58,357,080.48$ 29,154,521.63$ 29,202,558.85$ FY 2008 68,884,971.06$ 21,023,386.96$ 47,861,584.10$ FY 2009 19,238,439.73$ 18,057,480.50$ 1,180,959.22$

Total 489,257,402.93$ 297,837,702.93$ 191,419,700.00$

Table Example



Inventory

Work in Progress

ReworkQuality


Diagrams show relationships

Modifying a Contract by Customs and Practice

What does this mean?• Performing at a different level than is specified by the

contract over time until everyone understands that this is the expected performance level.


How does this happen?• Not documenting low performance• Not discovering low performance• Not recognizing low performance• Not knowing what constitutes low performance


What else can happen?• A vendor may want to perform above the level that is

required.• A vendor may accidentally overperform.• A vendor may not understand the requirements.


What is one to do?• Know what performance level is required.• Discover performance levels.• Learn to recognize performance levels.• Document low and high performance levels.


It is important to ensure that vendors perform at required levels, because the competitive procurement process relies on enforcement of contractual performance levels.

Unauthorized Performance Evaluations

Who provides unauthorized performance evaluations?• Anyone with vendor contact might say:

“Gee, you did a great job!” “This is NOT how it is done.” “My fifth grader could have done this.” “This is a lot better than what we expected.” “We aren’t paying for this!”


Why does this happen?• Dedicated, hard-working people often do not know the

details of the contract.• People often have an idea of what is right and wrong

that is not necessarily aligned with what is in the contract.

• People have experience with contracts that have other terms.

• A particular level of performance may be good for one user and not for another.

• It may not be a very good deal.


Why is this a problem?• It may mislead a vendor into poor performance.• It may shift a vendor’s focus from what the contract

intended.• It may be detrimental to the agency’s effort to elicit

performance.• It may be used as evidence in court.


What is one to do?• Communicate to the vendor how performance

evaluations are – and are not – provided and why this is important.

• Communicate to those with vendor contact how performance evaluations are – and are not – provided and why this is important.


SLAs and milestones in service contracts

Communications in service contracts

Modifying a contract by customs and practice

Unauthorized performance evaluations

Contact Information

Louis SellersContracts Administration Manager

General Counsel Division(512) 936-1676

[email protected]

Documents

Service Contracts Making Life Better