1 1 Critical Success Factors in Contract Management Breakout Session E04 Dr. Rene G. Rendon, CPCM, CFCM, Fellow Associate Professor U.S. Naval Postgraduate School

2 2 Critical Success Factors in Contract Management Background Theoretical Framework The Empirical Study Summary of Research Findings Implications of Research Conclusion

3 3 Background Department of Defense (DoD) obligated over $372B in FY2009 contracts DoD contract management is listed as a “high risk” by the GAO Poor acquisition outcomes Missed opportunities to improve contracting approach

4 4 Background DoD is placing increased emphasis on Workforce competencies Organizational process capability Organizational process assessments Contract Management Maturity Model (CMMM) Critical Success Factors (CSF)

5 5 Theoretical Framework Agency theory and the principal-agent problem (Eisenhardt, 1989) Conflicting goals between principal (buyer) and agent (seller) Asymmetrical information Results in different behavior between parties and reflected in approach to CM process

6 6 Theoretical Framework CSF Theory Elements of a business leading to success (Daniel, 1961) Determines type of information needed by managers (Rockart, 1979) CSF sources, categories, hierarchies (Bullen & Rockart, 1981)

7 7 Application to CM CSF directly related to organization’s contract management performance CSF important for workforce competency improvement CSF important for organization’s process improvement effort

8 8 The Empirical Study Research Focus: Develop a comprehensive understanding of the critical success factors in DoD contract management Research Question: What are critical success factors needed for your organization to achieve its mission?

9 9 Organizations Surveyed Army Contracting Command (ACC) AMCOM JM&L NCR RDECOM TACOM Naval Air Systems Command (NAVAIR) Naval Sea Systems Command (NAVSEA) Contractor A Contractor B

10 Survey Method Web-based survey Anonymous reporting Survey respondents GS1102 or military equivalents DAWIA Level 2 or higher Practicing contracting officer or contracting specialists Industry equivalents

11 Survey Results Number of respondents: 799 Number of responses: 2030 Created 7 CSF categories Leadership Processes Policies Relationships Requirements Resources Workforce

Organization Number Eligible Number of Responders Response Rate Number of Responses Percentage of Total ACC AMCOM %51627% ACC JM&L524688%964% ACC NCR %34814% ACC RDECOM %23615% ACC TACOM %32017% NAVAIR %1908% NAVSEA %1268% CONTRACTOR A463065%713% CONTRACTOR B634775%1274% Total % %

Survey Response Rates

14 Survey Results Response Categories Leadership Strong empowered support Quick decision-making Clear lines of authority People-oriented management Processes Documented, standardized Consistent, efficient, effective Enforced, streamlined

15 Survey Results Response Categories Policies Guidance, directions, regulations Dissemination, interpretation Enforcement Relationships Cooperation, coordination Communication, collaboration Teaming, support

16 Survey Results Response Categories Resources Facilities, information technology Equipment, supplies Technical support, funds Requirements Procurement request documents SOWs, SOOs, PWS Specifications

17 Survey Results Response Categories Workforce Trained, skilled, educated Recruitment, retention, promotion Experienced, mentored, coached

18 Place Holder for Agency-Specific Results

19 Summary of Research Findings Workforce category consistently identified most often as CSF for all DoD organizations Training consistently identified most often as CSF within Workforce category Processes or Relationships categories also consistently identified as CSF for all DoD organizations

20 Summary of Research Findings Processes category consistently identified most often as CSF for industry organizations Relationships category also consistently identified as CSF for industry organizations

21 Implications of Research DoD should continue to focus on establishing a trained, skilled, and experienced contracting workforce Further research should address the effectiveness of DoD’s contract management training in terms of performance outcomes Is there a knowledge gap between explicit and tacit knowledge?

22 Implications of Research Industry should continue to focus on establishing capable contract management processes Further research should address the maturity level of contract management processes and the effectiveness of the organization’s process improvement efforts

23 Conclusion CSF analysis can be applied to DoD and industry contract management organizations CSF analysis can be useful in workforce competency improvement CSF analysis can be useful in an organization’s CM process improvement

Questions/Comments 24 Dr. Rene G. Rendon, CPCM, CFCM, Fellow Associate Professor U.S. Naval Postgraduate School Monterey, CA