The DOD Other Transactions Guide. The DoD OT Guide for November 2018 deals with payments in Section III.K. The first issue we are debating are paying milestones: milestone payments — which they are not. OT milestone payments should not be confused with far performance-based payments (PBP). FAR PBP`s was introduced in 1996, a few years after OT made pioneering milestone payments. Unlike OT milestone payments, which have several potential functions, PBP is considered only as a method of financing a project under FAR. PBP are only allowed for fixed-price efforts. It does not make sense for them to require, although they are fixed-price, to track costs (DFARS 232.1001 (a)). While milestone payments have been widely used in ot`s, those from PBP are little used in FAR purchase contracts.
The DOD Performance Based Payments Guide (2014) states that „most contract and acquisition professionals are equipped with a… Order of the PBP. The management of contract miles tracks the progress of the contract by pursuing important milestones. Contracts generally describe the provision of a service or service over a specified period of time, often with defined dates for the performance of part of the contract. These dates generally form the basis of the step management system. Contract managers can verify important contract dates and, using an online contract management database, mark or highlight milestones based on time frames. Monitoring people and managing projects are not easy tasks. This is particularly the case when it comes to contract management and the attempt to retain the parties involved to ensure that the terms of the contract are properly met. Depending on the nature and extent of a company`s contracts, compliance with the many provisions of these agreements may require the participation of one, several or many employees of the company and any number of outsiders.
The management of contract miles is the act of dividing the entire project into small parts. Each part is designated as an important step. If you use contract mileage management, you have an objective method of tracking the final percentage and progress. It is much easier to assess the progress of an ongoing agreement and to determine whether all parties involved are succeeding properly when important milestones are recognized and monitored. If, for some reason, a step is not taken, managers can take steps to correct derailed progress and get things back on track as quickly as possible to ensure proper execution. I often draw attention to the fact that two important events in the negotiation of an OT agreement are to agree on a „vision statement” of the parties` mutual objectives. This is often taken up as Article I, the scope of the agreement. This is the structure and definition of milestone payments.
The importance of these two parts of the agreement is sometimes not appreciated by the FAR Agreement Officers (AO). An industry representative at a Conference of the Strategic Institute approached me after making these points to report on his recent experience in negotiating an OT. When he offered to negotiate a vision promise, the AO said, „You write it down.” When the industry representative proposed to negotiate a timetable for milestone payments, the AO said, „You write it down.” It is not the cooperation that these authorities are supposed to promote. Negotiating a clear vision of the mutual interest of the project can facilitate the negotiation of detailed trading conditions. Well-structured paying milestones can be the primary means of project management. These two elements must be shared in order to achieve winning/winning results for the project. Collaboratively, this means that not only are the government team and industry interconnected, but important members of the government team, not just an AO, need to be involved. The progress plan indicates, if any, contract miles and other milestones for important events