Expectations

Is it in the contract?

What does the contract say about….?

A contract, or when operating under one, THE contract is a written agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law. The government typically employees four different types:

1.    Fixed-Price Contracts - ask contractors to submit a bid to complete a project at or under a predetermined price (also called firm fixed price for this reason)

2.    Cost-Reimbursement and Cost-Plus Contracts - allow a contractor to seek reimbursement for incurred costs up to a prescribed allowance or ceiling.

3.    Time-and-Materials Contracts (T&M) - Combine elements of fixed-price and cost-reimbursement contracts. Basically, services are purchased by the hour, including fees and profit.

4.    Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts – provide the flexibility to

Pre-select multiple companies that will compete for future break-out contracts (often called "task orders") under the umbrella of the main contract.

Each type of contract comes with its own risks, to the contractor and to the government, as well as its own approach to management. Regardless of type, they provide a legally binding document that defines and governs the rights and duties of the parties to an agreement. More simply, a contract provides structure to the relationship and records what the parties have agreed to do for and with each other.

To outline what is to be accomplished under a contract, a Statement of Work (SOW) is provided. The SOW lists the:

1.    Requested Services— what the project actually is.

2.    Project Phase Descriptions—Detailing how many phases, and what goes into them.

3.    Project Duration and Milestones—an estimate on how long the project is expected to take and any milestones that will occur along the way.

4.    Resource Hours—How many hours are allocated to each phase.

5.    Billing Rates—What is being charged for each practitioner in your company.

6.    Proposed Tasks & Deliverables—What is to be done the specific forms of delivery, and the timing.

7.    Commencement and Completion Dates—When the contract starts and ends.

8.    Service Fees—charges for the entire engagement.

9.    Payment Schedule and Terms—How and when contractual payments will be made

10. Listing of Representatives—roles and responsibilities of key individuals.

Key to making all this work, is intentional vagueness. The contract lays out the explicit tasks, but each explicit task most likely involves several implicit tasks. Explicitly the contract might call for the take over and management of the customer’s 10 pieces of networking gear.

To the customer, this includes the implicit tasks of configuring the items to best practices, providing ongoing patching and monitoring, hardening the configurations from a security perspective, fine-tuning the settings for performance and dynamically change the configuration state to meet business needs on the fly. It also includes resolving connectivity or functionality issue identified by the providers management system. As well as providing for the repair and/or replacement of hardware as needed. All while meeting the strict contractual agreements (SLA) and then provide reporting that proves adherence to that SLA.

To the provider, the same explicit statement would imply that the initial setup has already been completed, and any new installations that are required, are the responsibility of the customer. The provider can see this as a chance to add work via  new, separate, out-of-scope projects that can be executed for the initial deployment and configuration of new items. The equipment will be documented for "current running state," and a baseline will be established for the customer’s normal operating performance. "Best practices" is an ambiguous term, so configuration changes will be made to ensure the steady running state in accordance with known operating issues and recommended configuration settings. A runbook or order of operations will be generated to establish triage and tasks for maintenance as well as escalation paths for incidents, either related to performance or remediation. The ongoing patching, securing, and monitoring will be executed in accordance with the runbooks, and incidents and anomalies will be triaged through ticketing. If there is a need to repair\replace  a physical component, the customer’s warranty and support contracts will be leveraged to facilitate the repair (the repair falls to the warranty provider). (This example relies heavily on Trachtenberg, 2018)  

This gap can be illustrated by the figure below, where the inner circle represents the explicit taskings outlined in the contract, and the outer represents the implicit taskings.

To overcome these discrepancies in view, organizations must seek to understand the views of the other. Researcher John Seeley Brown describes this as “…a new way of looking at the world through the eyes of the customer.” (Saint-Onge and Armstrong) To make a managed service work, this must be expanded to include all parties.

Rather than attempting to self-define the implicit tasks protecting their own systems and understandings, an effort must be made to build effective communication channels. Through these communications the participants create and share information with one another to reach a mutual understanding of both the systems and limitations currently in place as well as facilitating the acceptance of a new ideas to overcome those limitations. (Rogers) This collaborative dialogue allows provides the methods to sort out and to understand differences and disconnects and to grasp the expectations of the work to be performed. This dialogue allows for the creation of a trust between all parties and established the foundations for the establishment of a generalized reciprocity (a mulit-directional knowledge flow that provides all parties with the ability to both contribute and derive value from the relationship (Saint-Onge and Armstrong).

Without this a contract can hit every specification. Everything explicitly detailed in the contract can be accomplished, ever SLA met – yet the contract can still struggle and fail because it has not addressed and does not understand the expectations.

References

Davenport, T. (1997). Information Ecology: Mastering the Information Knowledge Environment. New York: Oxford University Press.

Rogers, E. (2003). Diffusion Of Innovations. New York: Free Press.

Saint-Onge, H., & Armstrong, C. (2004). The Conductive Organization. New York: Routledge.

Trachtenberg, M. (2018, August 16). What Is A 'Managed Service' Anyway? Retrieved November 30, 2020