Milestone payments – which they are not. OT stage payments should not be confused with FAR performance-based payments (PBP). FAR PBPs were introduced in 1996, a few years after OT`s revolutionary milestone payments. Unlike EO stage payments, which have multiple potential characteristics, BPPs are only considered a method of financing a project under the FAR. BPPs are only approved for fixed-price efforts. Illogically, although at a fixed price, they require tracking of the costs incurred (DFARS 232.1001(a)). Although milestone payments have been widely used at OT, BPPs are rarely used in far far supply contracts. The DoD Performance Based Payments Guide (2014) states: “Most contract and acquisition professionals have one. PBP Agreement. The expected start or completion dates set by the Contractor in the schedule must match the Contract Milestones specified in the Contract documents. There is also a contrast to the standard terms of service available, the terms of which accurately reflect the terms of this document and can be used either as standard terms and conditions or as a pre-contractualised document to give potential customers a clear idea of what the eventual service contract will look like. Monitoring people and managing projects are not really easy tasks. This is especially true when it comes to managing contracts and trying to accompany the parties involved in the proper execution of the terms of the contract. Depending on the nature and scope of a company`s contracts, compliance with the many provisions of these agreements may require the involvement of one, several or more employees of the company, as well as a number of external persons.
Ultimately, by carefully monitoring contract milestones and striving to meet them, companies are required to improve overall contract compliance. This, of course, saves money in the long run by eliminating unnecessary layoffs, imposing fines, or losing business due to non-compliance. Conscientious monitoring of contract milestones leads to better contract compliance, stronger relationships between different departments, and improved workflows. The milestone status indicates whether the milestone is ready for billing, has been billed, is open, or is pending. I often point out that two important events in the negotiation of an occupational therapy agreement are the agreement on a “vision statement” of the parties` common goals. This is often included in Article I, the scope of the agreement. The structure and definition of milestone payments is also important. The importance of these two parts of the agreement is sometimes not recognized by the training of agreement officers (AOs) in the FAR.
An industry representative at a Strategic Institute conference approached me after I raised these points to share his recent experience negotiating an occupational therapist. When the AO offered to negotiate a vision statement, he said, “You write it down.” When the industry representative suggested negotiating a timeline for milestone payments, the AO said, “You write it down.” It is not cooperation that these authorities are supposed to promote.