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Supplying Principles and Practices > USPS Supplying Practices Process Process Step 5: Measure and Manage Supply > Share Lessons Learned
Share Lessons Learned
Sharing lessons learned regarding the purchase process is a mechanism for
the transfer of knowledge among members of the Purchase/SCM Team and
Supplier. A lesson learned is not past performance information like that
discussed in the Prequalify Suppliers topic of the Perform Solicitation-Related
Activities task of Process Step 2: Evaluate Sources. It is a function of project
closeout and is an ongoing discussion among the parties to the purchase to
determine what was successful and what could have been improved.
Lessons learned can be extended to anyone within the Postal Service who
will gain value from the experiences of parties to, and administrators of, a
contract. Because effective relationships between the Postal Service and the
Supplier are central to the success of a purchase, partnerships and
collaboration should be fostered to achieve mutual goals. In sharing lessons
learned and by communicating useful information regarding both successful
and unsuccessful endeavors, efforts, problems, and accomplishments are
identified, resolved, and/or propagated. Effective contribution to the lessons
learned forum results from clear and concise communication.
Whether lessons learned should be shared is the decision of the
Purchase/SCM Team. Factors that should be considered are the overall
effectiveness or lack thereof of the contract, whether the purchase furthered
or hindered a major Postal Service program, whether the Purchase/SCM
Team employed any innovative purchase practice and the extent of which
those purchase practices were successful or unsuccessful, and any other
pertinent facts the Purchase/SCM Team feels would benefit other
Purchase/SCM Teams.
The main forum for sharing lessons learned is a postcontract performance
workshop, facilitated by the Contracting Officer, which is attended by the
Purchase/SCM Team and pertinent representatives from the Supplier. The
results of the workshop should be posted on the Postal Service intranet
knowledge site so that the lessons learned can be perpetually accessed and
shared. Sharing lessons learned is the foundation for the topics associated
with the Manage the Supplier Relationship task of Process Step 5: Measure
and Manage Supply.
Sharing lessons learned is the circulation and transfer of helpful knowledge in
an open and descriptive environment and requires:
• Soliciting feedback from the Purchase/SCM Team
• Soliciting feedback from the Supplier
• Soliciting feedback from Subcontractor(s)
• Identifying root causes of problems
• Identifying and suggesting improvements
The Client and Contracting Officer must internally generate and circulate
findings that assess whether the contract met the identified needs and
expectations of the Client. This assessment should also address how the
contract has generated revenue or loss and determines whether process
improvements are appropriate. Additional information for how to conduct this
assessment can be found in the Evaluate Contract Effectiveness topic of the
Manage Delivery and Contract Performance task of Process Step 5:
Measure and Manage Supply.
Contract performance information is used by the Postal Service for future
purchases to guarantee that the proper investments are being made for
future purchases and that best value has been obtained. The findings should
address the following lessons learned:
• Postal Service conduct and self-assessment
• Effectiveness of procedures
• Effectiveness of tools and techniques
• Effectiveness of "as-is" relationship with the Supplier
• Satisfaction with Supplier timeliness
• Necessary personnel skills and capabilities
The Contracting Officer must also generate and circulate findings using the
information leveraged from the Evaluate Contract Effectiveness topic of the
Manage Delivery and Contract Performance task of Process Step 5:
Measure and Manage Supply. The findings should regard the following
lessons learned:
• Effectiveness of interface between the Purchase/SCM Team and
the Supplier
• Supplier opinions regarding project successes
• Supplier opinions regarding project failures
• Supplier suggestions for improvement
Depending on the particular purchase, the Contracting Officer must also
generate and circulate, to postcontract performance workshop participants,
findings using the information leveraged from the Evaluate Contract
Effectiveness topic of the Manage Delivery and Contract Performance task of
Process Step 5: Measure and Manage Supply. The findings should consider:
• Effectiveness of interface between the Supplier and the
Subcontractor(s)
• Subcontractor opinions regarding project successes
• Subcontractor opinions regarding project failures
• Subcontractor suggestions for improvement
The Client and Contracting Officer, in conjunction with postcontract award
workshop participants, must leverage their collective experiences, expertise,
and expectations for the future to analyze the findings generated from the
solicited feedback. Once complete, they must reciprocally circulate the
analysis to the remainder of the Purchase/SCM Team. Once problems are
identified, the root cause is determined, and the Supplier has had the
opportunity to respond, the information is recorded and posted to the
knowledge site. By determining the reason for difficulties and project failures,
the Postal Service can change future actions, plan strategies for
enhancement, and gain a competitive advantage. Problems may have
various reasons or causes, including:
• Process - policies, processes, procedures, methods, and/or
techniques
• Tools and technology - architecture, platforms, physical
environment
• Organization - relationship between the Postal Service and the
Supplier, assigned roles and responsibilities, formal and informal
structures, support functions
• Skills - experience and training necessary to ensure both Postal
Service and Supplier personnel capabilities
• Culture and leadership - communication, teamwork, morale,
attitudes, beliefs, incentives
• Plans and controls - awarded contract, plans, schedules,
measurements
Mechanisms and methods that will improve performance will also be
explored, and the knowledge generated from sharing lessons learned can be
leveraged to identify these mechanisms and methods. All parties involved
with contract management and contract performance must successively
share lessons learned with relevant quality, method, or process stakeholders
who are impacted by the suggested improvements. Sharing lessons learned
creates a knowledge chain effect, which is the group process of continually
imparting acquired expertise to others so that they too can acquire and share
expertise. A continuous improvement process for the sharing of lessons
learned and improvement opportunities is laid out in the Continuous
Improvement topic of the General Practices.
Value engineering is a method of encouraging suppliers to independently
develop and propose changes to improve an end item, the way it is
produced, or the way a contract is performed. The change must reduce the
contract's cost and not impair the essential characteristics or functions of the
product or service. Savings are shared by both parties, and the supplier is
paid allowable development and implementation costs.
A value-engineering change proposal (VECP) is a proposal that:
• Requires a change to a current contract;
• Results in savings to the contract; and
• Does not involve a change in:
(a) Deliverable end items only;
(b) Test quantities due solely to the results of previous
testing under the contract; or
(c) Contract type only.
If the Postal Service accepts a VECP, the Supplier shares in the contract
savings based on the negotiated agreement contained in the contract. The
contract savings are calculated by subtracting the sum of the estimated cost
of performing the contract with the VECP, Postal Service costs, and the
Supplier's allowable development and implementation costs from the
estimated cost of performing the contract without the VECP. If priced options
are included in the contract, those prices will be adjusted in accordance with
the above calculation. Profit is excluded when calculating contract savings.
The Contracting Officer may negotiate a noncompetitive contract or contract
modification for an additional quantity incorporating a change proposal when:
• An otherwise acceptable VECP is received too late during
performance to provide a significant benefit under the current
contract; or
• Additional quantities are required that are not provided for under
the contract.
When a supplier who does not have a current contract submits an unsolicited
proposal in the form of a VECP, the Purchase/SCM Team may decide to have
the Contracting Officer negotiate a noncompetitive contract incorporating the
VECP.
Generally the Purchase/SCM team will evaluate a VECP and either accept it
or reject it, in whole or in part, within 45 days of its submission to the
Contracting Officer. To expedite the evaluation, suppliers may give oral
presentations to the appropriate parties. If evaluating the proposal will take
more than 45 days, the Contracting Officer must notify the proposer of the
expected decision date. If a proposal is rejected, the Contracting Officer must
notify the proposer and explain the rejection.
The supplier may withdraw all or part of a VECP any time before it is
accepted by the Postal Service.
Acceptance of all or part of a VECP and determination of the savings
requires the agreement of both parties. Acceptance is accomplished by a
supplemental agreement to the contract. If agreement on price is reserved for
a later supplemental agreement, but agreement cannot be reached, the
matter must be treated as a dispute under Clause B-9: Claims and Disputes.
The Supplier must perform according to the existing contract until a VECP is
accepted. The Contracting Officer's decision to accept or reject all or part of a
VECP is final and not subject to Clause B-9: Claims and Disputes.
If the Purchase/SCM Team foresees a potential cost reduction through value
engineering under subcontracts, additional paragraph j should be added to
Clause 2-22: Value Engineering Incentive. If there is a potential for savings
through value engineering, Clause 2-22: Value Engineering Incentive, should
be included in firm fixed-price contracts of $100,000 or more, at any time
during the term of the contract. However, the clause may not be used in:
• Fixed-price incentive contracts
• Research and development contracts
• Contracts with nonprofit or educational organizations
• Contracts for professional or consultant services
• Contracts for product or component improvement
• Contracts for commercially available goods and services
Involve Suppliers in Planning topic, Collect Ideas and Build Fact Base task,
Process Step 2: Evaluate Sources
Prequalify Suppliers topic, Perform Solicitation-Related Activities task,
Process Step 2: Evaluate Sources
Evaluate Contract Effectiveness topic, Manage Delivery and Contract
Performance task, Process Step 5: Measure and Manage Supply
Continuous Improvement topic, General Practices
Clause B-9: Claims and Disputes
Clause 2-22: Value Engineering Incentive
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