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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

Solicit Feedback from Purchase/SCM Team

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

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Solicit Feedback from the Supplier

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

Solicit Feedback from Subcontractors

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

Determine Root Cause of Problems

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

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Identify and Suggest Improvements

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

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.

Noncompetitive Purchases

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.

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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

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Other Topics Considered

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

Clauses & Provisions

Clause B-9: Claims and Disputes

Clause 2-22: Value Engineering Incentive

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