Outsourcing Management Functions for the Acquisition of Federal Facilities (2000) / Chapter Skim
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3 Ownership Functions and Core Competencies
3 Ownership Functions and Core Competencies
Pages 46-63
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From page 46... ...
One element of the study committee's statement of task was to identify the organizational core competencies federal agencies need for effective oversight of outsourced management functions while protecting the federal interest. This chapter begins with a brief review of the differences between ownership and management functions for facility acquisitions, including a discussion of the relationship between ownership and management functions and inherently governmental functions.
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From page 47... ...
Management functions, in contrast, include performing ministerial tasks to carry out or implement the owner's decisions and, by definition, to control the accomplishment of the task. Owner functions include determining the need for a facility, developing the project scope, balancing conflicting priorities, establishing parameters (e.g., cost and duration)
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From page 48... ...
In essence, therefore, the distinction between inherently governmental functions and commercial activities is the same as the distinction between ownership and management functions. FAR Section 7.503(d)
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From page 49... ...
explains that the agency's decision about outsourcing these activities depends on the degree to which ownership functions may be compromised: This assessment should place emphasis on the degree to which conditions and facts restrict the discretionary authority, decision-making responsibility, or accountability of Government officials using contractor services or work products. In the committee's opinion, FAR Section 7.5 can be used as a the basis for a two-step threshold test for determining whether a particular management function related to facilities acquisition should be performed by federal agency staff to protect the federal interest.
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From page 50... ...
A smart owner focuses on the relationship of a specific facility to the successful accomplishment of an organization's business or overall mission. A smart owner of facilities must be capable of performing four interdependent functions related to acquisition (Figure 3-2~: · establishing a clear project definition · establishing progress metrics FIGURE 3-2 The four owner functions in successful facility acquisition.
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From page 51... ...
Thus, even if an organization outsources management functions for planning, design, and construction activities, competent representatives of the owner must still lead and implement preproject planning. Setting project-specific goals, objectives, and priorities requires knowledge of the organization's overall business or mission and the ability to translate facility requirements to meet business or mission objectives (FFC, 1998~.
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From page 52... ...
. Although activities related to the management of specific projects can be outsourced, the owner organization is ultimately accountable for the performance, cost, quality, and functionality of the acquired facility.
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From page 53... ...
A recent NRC report found that the "best public agencies and private firms engaged in capital project development maintain central organizations with core competencies in project management, project planning, coordination, and human resources development." Such organizations provide "structure, continuity, and leadership that foster cooperation both internally and externally" (NRC, 1999~. And the Center for Construction Industry Studies has found that "using project teams and retaining in-house expertise in key functional areas of engineering improves the owner's ability to control project outcomes, evaluate contractor performance, and make informed decisions about contractor selection.
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From page 54... ...
Core Competencies for Owners To function effectively as an owner when acquiring facilities, a federal agency should have the organizational core competencies to perform the following functions: · evaluate and implement government-wide and agency-specific policies and standards and suggest ways to improve them · develop, analyze, select, implement, and adjust the means or alternatives to achieve program or project objectives · monitor, control, and adjust program or project implementation based on specific progress metrics (e.g., cost, schedule, complete-to-date, cost-tocomplete) To manage planning, design, and construction services effectively or to oversee the management of those services by an outsourced entity, the agency should also have the capabilities to perform the following functions: · detailed technical analyses of alternatives, including design, procurement, construction, and final performance requirements · financial analyses of the relative costs, benefits, and cash flows of the alternatives from conceptualization through design, procurement, and construction to start-up · project management analyses for the identification, collection, analysis, and summary of accurate and valid project data · construction-management activities to implement and adjust policies, standards, and resource allocations to project conditions In short, federal agencies should retain the core competencies to establish project definitions, establish project metrics, monitor project progress, and ensure commitment, stability, and leadership.
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From page 55... ...
When some functions are outsourced, project-management skills become vitally important for owner organizations. Project management has been defined as " the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project...[it]
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From page 56... ...
For a project to be successful, the project sponsors must "know what they need and can afford, where they want to locate the project and when it must be ready for use or otherwise completed." Facility users should be committed to project scope, requirements, budget, and schedule and should have the capacity to weigh options and make timely, informed decisions to avoid project delays (NRC, 1999~. Core Competencies for Providers of Facilities Agencies or entities whose mission includes providing facilities have a greater need to retain technical, general, and project management core competencies to ensure that they provide quality facilities that meet owner and user agencies' needs.
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From page 57... ...
Senior leaders and staff of each agency should identify the organizational core competencies necessary for effective facility acquisitions to support their current and future missions. Federal agencies face a number of challenges in developing and retaining core competencies for facility acquisitions.
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From page 58... ...
A report by the Center for Construction Industry Studies based on 274 projects from 31 public and private-sector organizations showed that approximately 62 percent of planning, design, and procurement functions were outsourced. Based on detailed case studies of three of these organizations and interviews with members of 22 other organizations, the study found that it is "fairly well recognized in owner firms that the skill set required to manage and work on projects from the owner's side has changed dramatically.
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From page 59... ...
A recent NRC report found that to satisfy the basic core competencies required for a federal agency to be a smart owner, and for agencies that elect to retain their management activities, the staff involved with implementing capital programs should be trained and certified in project management. This professional training should be updated throughout their federal employment (NRC, 1999)
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From page 60... ...
In essence, therefore, the distinction between inherently governmental functions and commercial activities is the same as the distinction between ownership functions and management functions. Using Section 7.5 of the FAR as a basis, the committee developed a two-step threshold test for determining whether a particular management function related to facility acquisitions should be performed by federal agency staff to protect the federal interest.
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From page 61... ...
Other organizational core competencies needed to direct and manage specific projects vary, depending on the agency's role as owner, user, or provider of facilities. A smart owner of facilities must be capable of performing four interdependent functions related to acquisition: define project scope, goals, and objectives clearly; establish performance criteria to evaluate success; monitor project progress; and provide commitment and stability, (i.e., leadership)
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From page 62... ...
Finding. The organizational core competencies necessary to oversee the outsourcing of management functions for projects and/or programs need to be actively nurtured over the long term by providing opportunities for staff to obtain direct experience and training in the area of competence.
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From page 63... ...
PMI (Project Management Institute)
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