25.7 VITA contractual requirements

25.7.3 Requirements for promoting supplier performance

§ 2.2-2012(E) of the Code of Virginia states: "If VITA, or any executive branch agency authorized by VITA, elects to procure personal computers and related peripheral equipment pursuant to any type of blanket purchasing arrangement under which public bodies, as defined in § 2.2-4301, may purchase such goods from any vendor following competitive procurement but without the conduct of an individual procurement by or for the using agency or institution, it shall establish performance-based specifications for the selection of equipment."  

All IT contracts should promote excellence in supplier performance. Measuring a supplier's performance as part of the contract, combined with the agency's management of the supplier's performance will provide greater value for the Commonwealth and taxpayers. In order to emphasize excellence in supplier contract performance, VITA recommends that all IT contracts include the following:

  • Agency and project performance expectations and objectives.
  • Procedures for systematically gathering and using ongoing performance data on supplier's performance during the term of the contract.
  • An issue resolution and/or escalation process with defined time frames.
  • Built-in incentives/remedies attached to supplier performance.

During contract negotiations, work with the supplier on establishing partnering programs and measurable goals for reducing administrative burdens on both parties while ensuring supplier performance and value. Include negotiated goals into the contract. Always make agency satisfaction with the supplier's performance an on-going measurement during the term of the contract.

The type of performance data needed will be determined by the type of procurement. For instance, a contract for maintenance support will require a service level agreement with monthly reporting on supplier's service performance in order to tie remedies to payment via a percentage discount. A solution and implementation driven procurement should include sequential milestones or deliverable submissions and gear remedies to on-time delivery and/or acceptance criteria. For a contract with a Value Added Reseller (VAR) or for an off the shelf IT commodity procurement, availability and delivery may be performance drivers. Please refer to Chapter 21 - Performance-Based Contracting and Service Level Agreements of this manual, Performance-Based Contracting and Service Level Agreements, for a more in-depth discussion and valuable guidance.

Agencies should consider the following questions and integrate them into the contract from what was included in the solicitation and negotiated, if applicable, with the supplier:

  • What does the project need (product specifications, service turnaround, etc.) to satisfy the end user(s)? "What would the successful project look like?"
  • How quickly must the supplier correct each failure? What are the agency's remedies if supplier does not correct the failure within the specified time?
  • What measurement and enforcement tools and processes will be implemented to ensure that performance can be measured and enforced?
  • What financial or other incentives or remedies are needed by the agency?
  • Does the agency have the ability to get out of the contract without penalty if the supplier is not meeting its service level obligations?
  • How important is it to the agency for the supplier to provide "transition services" while an agency is trying to procure a new supplier?