Original Date: 11/12/2001
Revision Date: 01/18/2007
Best Practice : Contract Management System Database
The Contract Management System Database tracks contract deliverables on Frontier Electronic Systems’ contracts, allowing all participants contributing toward a contract’s performance to synchronize their efforts in support of one always-current contract delivery date. The result is a 98% on-time delivery rate and numerous recognition awards to the company for its outstanding delivery performance.
Previously at Frontier Electronic Systems (FES), the visibility and status reporting of contractual delivery requirements were limited to monthly program management reviews. While Program Managers were held accountable for making on-time deliveries, the low level focus of this requirement tended to cause deliveries to take a lower priority in daily project management and planning. FES commonly ran “fire drills” to make last minute deliveries, paid premium prices for material purchases and shipping, and used overtime as a solution. Program teams worked with unofficial/verbal changes of contract delivery dates from customers. FES ended up completing out-of- scope tasks at its own risk since contract changes are not binding unless received from the customer’s Contract Manager. The result was that Program Managers frequently worked toward a perceived changed delivery date while Contract Managers worked toward the actual delivery date as reflected in the contract. This practice placed FES in an after-the-fact position with often no opportunity to prevent late deliveries. On-site representatives and the Defense Contract Management Agency (DCMA) were continually dissatisfied with FES’ delivery performance. Despite the company’s good intentions and customer focus, FES continued to maintain an uneven delivery performance. In 1998, FES implemented the Contract Management System (CMS) Database to track contract deliverables on all contracts.
FES’ overall objective was to be more consistent in meeting customer schedule requirements, with a goal of meeting customer delivery requirements more than 95% of the time. The process starts when the Contract Manager initiates the Contract Summary Memorandum (CSM) and distributes it to the Program Manager. The Contract Manager enters the CSM into the CMS Database. The CMS deliverables report is reviewed by the management team at weekly meetings. If a course correction is required to meet the customer delivery date, then corrective action is taken and entered into the system so the Contract and Program Managers can uniformly track delivery progress. If a revised delivery date is imposed, the Contract Manager revises the CSM and enters the new date into the system, allowing the Contract and Program Managers to uniformly track the revised delivery date. The CMS Database contains deliverable quantities, due dates, contract line item number funding values, customer information, and other relevant data. Reports are generated and reviewed weekly by upper management to ensure that risks to imminent and future deliveries are properly addressed. The CMS Database allows all participants contributing toward a contract’s performance to synchronize their efforts in support of one always-current contract delivery date.
Since 2003, FES has maintained a 100% on-time delivery and quality acceptance ratings for all of its customers. The company now tracks customer delivery requirements to ensure customer satisfaction. “Fire drills” are rare. Improved project planning ensures that materials are ordered with sufficient lead-time to avoid the need for expediting. Overall project management costs have also been significantly reduced. FES’ outstanding delivery performance has netted the company several business-of-the-year awards, the most recent being the 2001 DOD Nunn-Perry Mentor-Protg Award. The company has also attained preferred supplier status with large customers such as Boeing, Northrop Grumman, and Lockheed Martin. In 1999, DCMA designated FES as the first company in Oklahoma to operate under the Agency’s new self-surveillance program.
For more information see the
Point of Contact for this survey.