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Draft Report

Procuring, Managing, and Evaluating the Performance of Contracted TMC Services

The Budgetary Ceiling of this Agreement shall be the winning Proposer’s Price Proposal. Should the winning Proposer’s Price Proposal exceed the Department’s Procurement Budget, the Department shall reserve the right to only award parts of the Agreement. Services categorized as “Basic” in Exhibit “C”, Price Proposal shall have preference for award. Services categorized as “Discretionary” shall be awarded when additional funding is made available.

Software Development

Software is frequently a component of TMC service contracts.  To verify software competence offerors can be asked to describe their software development methodology in their proposal.  Section 2.2 of the Virginia DOT statement of work includes details about software management, documentation, testing and other activities to verify competency.  In addition it requires a contractor lead session that demonstrates understanding of the agency’s software.  The applicable text is as follows:

To ensure that there is full understanding concerning the system requirements, VDOT expects the Contractor to lead a session for requirements review, requirements clarification, and, if appropriate, requirements "scrubbing" to support the development of the Software Development Plan. This session shall take place no later than 2 months after initiation of this task. A draft of functional requirements, with changes noted, shall be submitted to VDOT for review at least two weeks prior to the meeting. The final version of the functional requirements shall be included in Software Development Plan.

Key Messages from Case Studies

The case studies illustrate that there is no single contracting strategy to secure TMC services.  As the terms of the documents illustrate, there is not even a single definition of the types of services that can be provided.  Instead, a wide variety of services can be provided through contract.  Each agency should examine their environment and select the contracting approach that meets their needs. Generally:

Most agencies include some performance-based elements in their contracts.  

A few agencies use incentive fees to reward performance.

Contract terms are three or more years.  They typically have the option for extension.

Agencies evaluate proposals using cost and other factors.  Cost is not the exclusive decision criteria.

Many agencies retain the option to award to multiple firms.  This can allow the agency to more expeditiously provide services if multiple TMCs are involved.  It may also allow them to partition some work to ensure quality.  For instance, one firm may develop software and the other may perform software testing.

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