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Partnering – A Better Way Of Doing Business

Table of Contents



Partnering is primarily a relationship in which program stakeholders
work, cooperate, and perform in good faith as a unified team. Partnering is
similar to picking teams for a tug of war at the company picnic. Each team is
together for the duration of the competition and the “partners” know that they
must work together to succeed. If the partners do not pull in the same
direction, hold on to the rope, and dig-in with their feet, the team will not
finish successfully.

In the acquisition of government systems, the program is the rope that unites
the program partners. Accordingly, the partners are required to put aside
individual interests and work together, communicate their expectations, agree
on common goals and methods of performance, and identify and resolve problems
early, before losing the opportunity for success.

The Army defines partnering as: “A project-specific interorganizational
dispute-avoidance process.” It is “project specific” because the Competition In
Contracting Act (CICA) does not permit long term government commitments to
individual companies that exceed the duration of the competitively awarded
contract. It is “inter-organizational” because it joins a number of different
organizations into a single project team. “Dispute avoidance” refers to the way
partnering works to eliminate the root causes of conflict. It is a “process”
because philosophy is not enough. By developing a specific process,
participants have guidance tools rather than just good intentions.

The Army limits the partnership to the acquisition agency and the contractor in
the period after contract award. We have the opportunity to extend the concept
to include the using and the acquisition agencies before award, and adding the
contractor to the team after contract is awarded.

This document outlines the development of partnering, describes its benefits,
and offers some suggestions for use on MITRE programs. In addition to
references cited in the text, the bibliography lists sources of information
related to partnering.

The Development of Partnering

A brief history of how partnering came about in our environment starts
with the construction industry, which has used partnering for a number of years.

Partnering in the Construction Industry

In 1994, the Construction Industry Dispute Avoidance and Resolution Task Force (DART) surveyed 8,000 attorneys, design professionals, and contractors.
The design professionals viewed project partnering “as a superior method” for
achieving desired results, and the contractors were “extremely favorable toward
the prospects of project partnering and tended to view it as a highly effective
vehicle for achieving a host of goals on construction projects.” More than 70 percent of all three groups predicted future
increases in the use of partnering. The design professionals and attorneys
indicated that favorable experiences with partnering outnumbered unfavorable
experiences by five to one.

The Army Corp of Engineers Endorse Partnering

Recognizing the success in the construction industry, the Army Corps of
experimented with the concept. Their success has prompted them to
adopt a policy of developing, promoting, and practicing partnering on all
construction contracts and to expand the concept to other relationships. The
Corps defines the concept this way:

    Partnering is the creation of an owner-contractor relationship that promotes
    achievement of mutually beneficial goals. It involves an agreement in principle
    to share the risks involved in completing a project, and to establish and
    promote a nurturing partnership environment. Partnering is not a contractual
    agreement, however, nor does it create any legally enforceable rights or
    duties. Rather, partnering seeks to create a new cooperative attitude in
    completing government contracts. To create this attitude, each party must seek
    to understand the goals, objectives, and the needs of the other — their “Win”
    situation — and seek ways that these objectives can overlap.

Delivery of an operationally useful system on time or early, and on or under
budget, is a win situation for the user, the acquisition agency, and the
contractor. Program success is a powerful incentive for all the partners and
eliminates the disincentives associated with failure to achieve technical,
cost, or schedule goals.

The Office of Federal Procurement Policy recognized the success that the Army
Corps of Engineers and several other federal agencies have achieved in
construction projects and has recommended (as a “Best Practice”) the
implementation of partnering principles in the automated data
processing/information resources management areas.

How Partnering Is Possible in Todays Government Environment

The direction from the Secretary of Defense in DoD 5000.2-R to implement Integrated Product and Process
Development (IPPD)
and Integrated Process
Teams (IPTs) encouraged and enabled partnering throughout the Department of
Defense (DoD). The Air Force Electronic Systems Center supports the concept and
has already demonstrated successful partnering efforts that involve the user,
the acquisition organization, and the contractor.

The Evolution of IPTs

IPPD is the latest phase of the Total Quality Management (TQM)
initiative adopted by the American automotive and consumer electronics
industries in the early 1980s. The adoption of TQM philosophy was in response
to the market share lost to the Japanese manufacturers who had implemented TQM
in their manufacturing processes. One of the key TQM areas was the Design For
Manufacturability (DFM) early in the conceptual stage of product development.
This permitted a faster concept to market cycle than the serial design and
manufacturing engineering processes used in American industry. In the mid
1980s, American industry supplemented the early TQM initiatives with Concurrent
Engineering (CE) and IPTs. These two additions permitted the involvement of
manufacturing, support, marketing, and other “illilties” early in the design
process. The implementation of IPTs moved the focus away from the functional
departments and toward the product being developed. It introduced teamwork as
part of a major system development process.

Department of Defense Enables Partnering

In the new version of DoD 5000.2-R, the Secretary of Defense directs
“that the department perform as many acquisition functions as possible,
including oversight and review, using IPTs.” The regulation also endorses the
use of “government-industry partnerships” as a best practice, but points out
that the participation of prospective contractors before award be in accordance
with procurement integrity rules and requires legal review. DoD Directive
5000.1 states that “Program IPTs focus on program execution, and may include
representatives from both government, and after contract award, industry.”

Air Force Material Commands Electronic Systems Center Recognizes a Need for Partnering

In their draft reengineering team report, the Electronic Systems Center
(ESC) recommended the formation of “strategic partnerships” early in the
program. The following summarizes their

    “A successful program is dependent on establishing strategic partnerships
    early. Working with both the user and industry early can lead to a program
    where everyone understands what is wanted and there are few surprises. An
    atmosphere of disciplined trust, where everyone understands each other’s role
    and respects it, is fundamental to reducing the risks of other (more
    radical) tenets of acquisition reform.

    The optimum process would start with a dialog between the user and the
    acquisition agency like:

    1) Let’s work together to understand your requirements.

    2) Let’s get industry involved up front to perform tradeoffs and contribute to
    our risk assessments.

    3) Let’s agree up front what we will do for you.

    4) Let’s form a strategic partnership for the duration of the effort among the
    user, ESC, and industry.”

The ESC strategic partnerships fall into two categories: 1) those involving
users and potential contractors participating in Cooperative Research and
Development Agreements (CRDAs) and 2) those involving the user and the selected
contractor for any given program.

The partnerships involving potential contractors are best illustrated with the
Command and Control Unified Battlespace Environment (CUBE) efforts that provide
an interoperability showcase for participating CRDA contractors to demonstrate
their products to users. Since the Competition In Contracting Act precludes
limiting the competition for any particular contract to the participating CRDA
contractors, ESC uses Requests for Information, Presolicitation Conferences,
the Hanscom Electronic Request for Proposal Bulletin Board (HERBB), and draft
Requests for Proposals (RFPs) to provide all potential contractors
(including the participating CRDA contractors) with the opportunity to better
understand user requirements and to provide inputs to government requirements
tradeoffs and risk assessments while the RFP is being developed.

The second category of strategic partnerships involves the relationship
between the ESC program office and the user (as well as other government
stakeholders) in defining the requirements and the source selection factors for
the acquisition in question. Although contractor inputs during RFP development
are solicited and frequently accepted when they benefit the government (and
don’t give any one contractor a competitive advantage), the decisions regarding
the requirements and source selection factors are a government responsibility.
As the RFP evolves, the government requirements and source selection factor
decisions are provided to all potential contractors on HERBB. The contractors
deciding to bid submit proposals on their respective approaches and the source
selection results in the award of one or more contracts. Once the contract is
awarded, the selected contractor(s) can be included in the government
stakeholder partnership for the duration of the program. The following
discussion is limited to this second category of partnership–the program IPT.

Benefits of Partnering

Without some change in our actions, we may think “IPT”, but act the same
old way and get the same old results. The recommended partnering process lets
us change our actions and reap the benefits. Some examples follow:

  • Reduced litigation. The Army Corps of Engineers has used partnering
    on large and small contracts for over six years. To date, all reports indicate
    that not a single dispute has gone to litigation on a partnered project. This
    is in stark contrast to the number of disputes received on non-partnered
    contracts of similar size and complexity.

  • Successful, profitable contracts. Experience within the construction
    industry has shown that partnering has resulted in completion on schedule, cost
    overrun reduction by two thirds, reduction in paperwork by 66 percent,
    increased value engineering, no lost time injuries, and other mutually
    beneficial performance when compared to the average contract. The Kansas City
    District of the Army Corps of Engineers found that, on average, a partnered
    contract reduced cost growth by 2.65 percent, reduced modifications by 29
    percent, and virtually eliminated time overruns (averaging 26 percent). Another district, the Portland District Army
    Corps of Engineers, discovered a two thirds reduction in paperwork.

  • Improved morale. Evaluations conducted under previous Army partnering
    contracts has shown a distinct improvement in the morale of the people working
    on the contract. When people can work in a conflict-free environment, they can
    concentrate on the job rather than on potential claims, and the morale and
    effectiveness of the whole “team” is improved.

  • International success. USSOCOM has been given acquisition authority by
    Congress that is equal to the services. Thus, for USSOCOM managed programs, the
    user and the acquisition agency are part of the same command. On the
    Directional Infrared Countermeasures (DIRCM) program, USSOCOM implemented IPTs
    that involved all the stakeholders (including the United Kingdom Ministry of
    Defence, the contractors, and external organizations) for the program. They
    have been happy with the implementation of the concept and claim success with
    their IPTs.

Why We Need Partnering

Partnerships and IPTs are formed to facilitate concurrent problem
solving. Both concepts involve the interaction of disparate groups to solve
complex problems. If all parties in an acquisition were of like mind, then
there would be no need for either IPTs nor partnerships. However, this is not
the case. Many of the “stakeholders” in the acquisition of a major system come
from different cultures and have different value systems and vocabularies. For
example, the stakeholders may include the following groups:

  • Mililtary personnel
  • Civil service personnel
  • Government program office core personnel
  • Government acquisition matrix support personnel
  • Funded Research and Development Center (FFRDC) core and specialty personnel
  • Technical, Engineering, and Management Services (TEMS) contractor personnel
  • Government logistics support personnel
  • Government personnel from interfacing programs
  • Government personnel from independent test and evaluation organizations
  • Government personnel from security or other accrediting organizations
  • Using command operations personnel
  • Using command support personnel
  • Prime contractor personnel
  • Subcontractor personnel
  • Commercial Off-The-Shelf (COTS) suppliers
  • Associate contractor personnel from interfacing programs

Therefore, when these groups come together, the potential for conflict rises.
The next section discusses some of the different types of conflict and some
management strategies.

Conflict and How to Deal with It

Conflict is a disagreement between two or more parties. The issues in
conflict are typically either substantive (such as allocation of resources,
policies, procedures, requirements) or over emotional (such as values, culture,
management style, personal preferences, distrust). Frequently, conflicts
involve both types of issues. Conflict can range in intensity from a minor
irritant to a major problem that threatens the success of the entire program.

Research indicates that a typical manager spends 20 percent of his or her time
resolving conflicts and disagreements. The DoD 5000.2-R direction to implement
the use of IPTs changes the role of the typical manager. The empowerment of IPT
members and IPT leaders delegates some of the program management authority and
increases the number of individuals required to deal with conflicts and
disagreements. With the increased use of IPTs, there are numerous opportunities
for conflict. Although the senior representatives of the participating
organizations may be equipped to deal with conflict, many of the individuals on
the IPTs have not had either training or experience in conflict management.

The Defense Systems Management College (DSMC) Program Manager’s handbook points
out that conflict has been traditionally viewed as a negative factor, and if it
is present, organizational management has failed. The handbook also points out a new perspective:

    “The contemporary view of conflict is that it is not inherently good or bad,
    but is neutral. According to this philosophy, conflict is a process in which
    incompatible goals, interpretations, or emotions of individuals or groups lead
    to opposition. Conflict can be beneficial and productive, contributing to
    effective problems-solving and serving as a change agent for the parties

Here are some constructive ways of dealing with conflict and some
recommendations for successfully implementing program IPTs on major programs.

Sources of Conflict

The DSMC Program Manager’s handbook indicates a number of sources of
conflict within a Program Management Office (PMO) and discusses the role of the
program manager (PM) in dealing with this conflict. The PM continues to have a
major role in dealing with conflict within the PMO. However, we will also
examine those sources of conflict in a broader context that considers the
entire program and the participation of the user, the contractors, and other
external organizations in program IPTs. Sources of conflict include:

  • Ambiguous Roles. IPT members’ clear understanding of their roles and
    responsibilities can minimize conflict. IPT members are expected to represent
    their functional specialties, understand how their specialty needs to be
    tailored for the product being developed by the IPT, promote the success of the
    IPT product, and promote the success of the overall program. Each team member
    needs to have a clear understanding of the responsibilities and authorities
    given to them by their sponsoring organizations. They must also have a clear
    understanding of the goals of the IPT and how they are expected to contribute
    to the achievement of these goals. Each IPT and its members must be aware of
    its responsibilities associated with requirements, priorities, costs,
    resources, and timing. A well developed Integrated Master Plan (IMP) will spell
    out the roles of the contractor(s), but the PM and functional organization
    supervisors are responsible for identifying the roles and constraints on the
    other participants.

  • Inconsistent Goals. The opportunities for inconsistent goals with the
    number of organizations involved abound. The user is preparing for war. The
    acquisition agency is developing products. The functional organizations
    supporting the program office are concerned about their respective “illities.”
    The FFRDC is concerned about system engineering and interoperability. The
    logisticians are concerned about sustainability. The contractors are concerned
    about profit and reputation. The test organization is concerned about
    operational suitability. The security organizations are concerned about
    protecting their sources. It is important that the IPT members develop mutual
    goals for the success of their IPT. However, the IPTs also need “overarching”
    goals that lead to the success of the program and are not suboptimized at the
    IPT level. A well developed Statement of Objectives (SOO) with clearly stated
    program and contract objectives is a good start in developing the required set
    of overarching goals.

  • Communication Barriers. Research indicates that communication barriers
    exist and create misunderstanding in most organizations. This is compounded by
    the functional and acquisition vocabularies in the program office, the
    operational vocabulary of the user, the logistics community vocabulary, the
    security community vocabulary, and the contractor vocabulary. On joint service
    or multinational programs, the communication barriers are even more
    significant. In addition to the differences in vocabularies, cultural and value
    system differences need to be considered. Only patience and the ability of IPT
    members to listen and understand the positions of the other IPT members and
    then to explain their position in the context of the IPT product development
    process will contribute to overcoming these barriers.

  • Delegation of and Limits to Authority. Empowerment of the IPT members
    by their respective organizations is key to the success of an IPT. IPT members
    without the authority to speak for their sponsoring organization impede the
    development process. There are some legal limits to empowerment in dealing with
    government contractors, and government personnel must be careful to avoid
    “constructive changes” to the contract. Likewise, an IPT cannot change cost,
    schedule, or requirements thresholds contained in the Acquisition Program
    Baseline (APB) for the program. Thus, the delegation of legitimate authority to
    IPT members and stating the limits of their authority are essential to the
    success of an IPT.

  • Program Priorities and Schedule. IPT members may differ on the
    sequence of important activities and tasks necessary to achieve successful
    project completion. The IMP and the Integrated Master Schedule (IMS) developed
    by the contractor in the proposal provide the initial roadmap for how the
    contractor-run (the contractor has the responsibility to design, develop, and
    deliver) IPTs will execute the program.
    These documents indicate the sequence and timing of the tasks necessary for
    each of the IPTs to complete their portion of the program. Following contract
    award, the government and the user should become members of the contractor’s
    IPTs and, if necessary, together with the contractor, modify the IMP and IMS to
    reflect a joint strategy for program execution. The agreement on the IMP and
    the IMS by the IPT and adherence to the agreed upon IMP and IMS are essential
    to the success of the program. The IMP and IMS should be treated as “living
    documents” and changed by the IPT, if necessary, to reflect changes in risk,
    priorities, funding, requirements, schedule, etc.

  • Resource Allocations. No program has unlimited resources (funds,
    manpower, facilities, etc.) with which to accomplish all activities,
    requirements, or tasks that seem worthwhile. The implementation of the Cost As
    an Independent Variable (CAIV) concept, directed by DoD 5000.2-R, makes it
    necessary to prioritize requirements to meet program cost objectives before the
    RFP is released. If there is a fixed
    budget and the cost of achieving the original set of requirements increases as
    the program develops, the budget decreases, or the operational requirements
    change, the agreements that have been reached on requirements priorities must
    be renegotiated. Because of the strong possibility of changes in the
    operational environment, cost growth, and funding cuts on government programs,
    the user must be deeply involved in the requirement-cost tradeoffs, starting
    with program definition and continuing through production.

  • Lack of Information. The IPT members need to be kept informed. This
    information has several dimensions. Changes in program or subsystem risk,
    schedule, funding, priority, or requirements needs to be communicated as soon
    as possible to the IPTs to permit them to alter their plans to meet revised
    program plans. The IPT members need to be able to share information on the
    product being developed to make informed decisions. The use of electronic data
    on a server that is accessible to all IPT members is one technique for sharing
    the required information. The IPT members also need to be kept updated on
    changes in policy, procedures, or requirements by their sponsoring
    organizations. And last, but far from least, the IPTs need to provide
    information back to the program office and their sponsoring organizations on
    decisions, activities, changes, problems, successes, etc., resulting from IPT

  • Resistance to Change. Changes in the acquisition process, reductions
    in resources, and the implementation of IPTs are resulting in significant
    changes in the way in which systems are developed. Conflict results when people
    perceive threats to their authority and tradition. The government and
    contractor program managers and the senior user representative must be
    conscious of the impact of program changes on their personnel. These
    individuals need to “sell” changes to their personnel in terms of program
    objectives and constraints. The maintenance of top-level documents like the SOO
    and the IMP in response to program changes is a good follow-up step to selling
    the changes.

The Consequences of Conflict

Conflicts between the user and the acquisition agency can be caused by
incomplete understanding of the user’s requirements, inability of the
contractor to deliver the promised product due to cost growth (under-bidding
the contract, unforeseen difficulties, etc.), changes in user demand for the
product, user concerns about development process efficiency, and user
disappointment in the evolving or final product. The disputes can lead to
significant delays in the development of the product, “requirements
adjustments,” or the correction of defects. Once on contract, delays are
expensive–the program office and contractor “marching armies” continue to use
resources even when the useful labor effort is at a standstill. These disputes
typically take place in a constrained funding environment (note the DoD 5000.2
direction for Cost As an Independent Variable). Serious early or mid-program disputes can lead to the
cancellation of the program since the user is responsible for program advocacy
and submitting funding requirements. Disputes late in the program often force
the user to take an unacceptable system rather than wait for funding and
development of another system.

Conflicts between the acquisition agency and the contractor can be caused by
requirements interpretation, lack of cost-realism during the bidding process,
delays in completion of intermediate milestones, funding fluctuations,
overestimated software productivity, and changes in user requirements. Like the
user-acquisition agency disputes, these disputes can stop the progress but not
the costs on the program. Unlike the user-acquisition agency disputes, these
disputes can and have been referred to the courts.

Conflict Resolution Strategies

Five basic conflict resolution strategies are identified by DSMC:
avoiding, forcing, accommodating, compromising, and collaborating.
Regardless of the source of the conflict, the “competing” or adversarial
conflict resolution strategy typically employed when these conflicts occur,
wastes significant manpower and dollar resources. In addition, it tends to
cause resentment in the other party and a long-term deterioration of the
business relationship among the parties.

The DSMC Program Manager’s Notebook advises that the only strategy that
optimizes the benefits to all of the parties involved is “collaborating.”

    “Collaborating is jointly identifying change opportunities and seeking an
    integrative solution — the “win-win” approach. The conflict issue is
    clarified, studied, and even redefined in an effort to give each party a goal
    and solution that can be fully supported. Collaborating includes such
    approaches as joint problem-solving, consensus-seeking, and establishing
    superordinate goals (higher-level goals on which all can agree) in order to
    achieve full cooperation. The major advantage of collaborating is that all
    parties may be very satisfied with


    Michael J. Bloom

    Michael J. Bloom works in the Systems Engineering Process Office of the MITRE Corporation, Bedford, Massachusetts. MORE >

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