Performance Based Studies Research Group

-Abstract-

A large government organization is using a risk management system which depends on the vendors to manage the risk on their contracts that they do not control, and to report on the status of the risk using a weekly risk report (WRR) and a risk management plan (RMP) which identifies how the vendor is minimizing the risk that they do not control. By minimizing the report content to dominant information that is difficult to refute (objective information such as time, cost, status), information is generated that motivates accountability, pre-planning, and performance of all parties. Dominant information minimizes the need for direction and control, identification of exact solution, and management, direction, and control by the client/user/buyers, and motivates the use of quality control/risk management by the contractors and quality assurance by the client/users. The transparency of the system becomes the enforcement of performance and accountability. Interesting concepts developed by the research include the concept that minimizing information flow is more effective than maximizing information flow between participants, vendors can effectively manage and minimize risk that they do not control by use of dominant information and best value concepts of measurement of performance and accountability can be initialized from the bottom up instead of from top down.

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-Abstract-

For decades, research has been conducted that addresses the issue of decision making.   For the past 15 years, research addressing decision making has been conducted by the Performance Based Studies Research Group (PBSRG).  The research is proposing that decision making is only done in events where there is inadequate information.  Decision making brings risk.

Unlike more traditional approaches which use decision making tools to bring information to the decision maker, this research is proposing that the mechanism of decision making itself is a problem.  The solution being proposed is to minimize decision making by all participants in the supply chain, and also minimize any characteristics that leads to decision making.  A structure/process has been developed which perceives all organizations and groups of organizations as a supply chain, and minimizes decision making by supply chain participants.   It also minimizes management, direction, and control, and replaces it with a leadership structure.  This concept has been tested out in almost 700 tests over 15 years and has a 98% level of predictability and success.  The paper used deductive logic and test results to validate the proposal.

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-Abstract-

A new contract model has been developed which changes a project manager’s (PM) responsibilities from writing and enforcing a contract, to transferring the responsibility of writing and administering the contract to the vendor. The new environment changes the PM’s role from management, direction, and control, to quality assurance.

Quality assurance is ensuring the vendor has a quality control and risk management plan. The new model is based on the assumption that the client cannot control the vendor through the contract. The control mechanism is deleted, and the vendor creates a contract document that minimizes risk. The contractual document, which must be approved by the client’s PM and legal, includes a risk managing mechanism called the risk management plan (RMP) and a weekly risk report (WRR.) The new contractual mechanism is the expert contractor’s mechanism to document and minimize risk and transactions.

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-Abstract-

Design Services have been not meeting the value and expectations of the clients and their project managers. A research project has studied the impact of the low bid award environment on construction practices, and has proposed that designers‟ current practices and expectations are price based and not performance based.

The authors also propose that the qualification based system is a price based system and should be replaced by a best value system which includes a best value selection process such as the Performance Information Procurement System (PIPS.) The new design model will give control and risk management capability back to designers by utilizing a weekly risk report (WRR) and the risk management plan (RMP.) The new PM model managing design firms will create transparency; will give the advantage to the higher performing professionals. The researcher interviewed over 400 designers to validate the concepts of the new designer model.

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-Abstract-

To describe the implementation of the Performance Information Risk Management System (PIRMS) to indefinite delivery indefinite quantity (IDIQ) general contractors in the US Army Medical Command (MEDCOM) 26 sites, 150 projects/year, and $250m/year maintenance and repair construction program.

Design/methodology/approach – To test the hypothesis that facility owner management, control, and decision making is a source of risk, and that the transfer of risk and control to the contractors will minimize the risk.

Findings – Include minimizing construction management by 33 percent, motivated contractors to regulate their own contracts, minimized unresolved issues by 50 percent, minimized contractor generated change orders by 20 percent, and moving from doing quality control to quality assurance.

Research limitations/implications – The authors see no constraints in the implementation of PIRMS in other organizations. This paper reflects the perceptions of the Arizona State University research team, and publicly available test results, and not the views or policy of the USA Medical Command.

Originality/value – Includes the use of dominant performance/risk information from the contractor's weekly risk reports to create accurate performance and risk information on all ongoing projects, the IDIQ contractors, and on the client's/buyer's personnel. Risk information is being used to streamline a large organization's organizational structure, minimizing decision making and transactions, and transferring risk and control to the party who can minimize the technical risk.

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