IMT Logic

PIPS Process




The Performance Information Procurement System (PIPS) is the most common model used in the Best Value Approach (BVA) to deliver services. The full PIPS model is from procurement to the project/risk management of a project.

PIPS utilizes a series of three phases to identify and utilize expertise to deliver the best value service for the lowest cost. The main objectives of the PIPS process include:

  1. Minimize thinking and decision making of all parties [utilize experts who make fewer decisions].
  2. Minimize effort [use of resources] of all parties.
  3. Minimize transactions in the delivery of services.
  4. Utilization of expertise instead of management, direction, and control [MDC] in the supply chain.
  5. Minimize project cost and maximize vendor profit through efficiency.

Each phase has been designed to accomplish these overall objectives. Below is a brief description of each phase, for more detail or the process and theory see publications.

Phase 1: Selection

Vendors are selected based upon their level of expertise specific to the subject project and not a technical scope of work. All vendors are given the opportunity to differentiate themselves from their competitors using non-technical performance metrics that demonstrate their level of capability and expertise to meet the buyer’s specific requirement and need. In the Selection phase the vendors’ offered project scope is not yet considered; vendors are prioritized solely based on expertise (project capability submittals and interview) and competitive pricing.  However, this does not mean that the competing vendors should not have a scope with a schedule and price.  Vendors must submit a price for the scope which they will propose.

Project Capability Submittals

Project capability submittals (Level of Expertise, Risk Assessment, and Value Added) address the vendor’s: (1) competence to perform the project, (2) capacity to identify/mitigate/minimize risk occurrence, and (3) ability to increase value for costs outside the normal budget. All three documents are a maximum of two pages each and are rated highly based upon the vendors ability to provide high performance metrics which are specific to the client’s project.

The Interview

The vendors are required to send key personnel who will be actively working on the project to the interview. The interview is not intended to be highly technical or scope related. The goal is to determine if the key personnel have expertise related to the client’s specific project. An interview will generally last around 30 minutes depending on the project.

Phase 2: Clarification

The top prioritized vendor in the Selection phase is invited to the Clarification phase. In this phase the selected vendor will be responsible to finalize and present their project plan including major documents such as the scope of work [SOW], detailed schedule, milestone schedule w/cost, the activities required by all other stakeholders, expert estimates where there is a lack of information, a risk mitigation plan and performance metrics that will be kept during the project.  The client is then given a chance to review, discuss and approve the vendor’s SOW and plan before the contract is awarded. If the prioritized best value vendor is not capable to deliver a complete and realistic plan to the client, the next prioritized best value vendor will take his place.

Phase 3: Execution

The awarded vendor executes their approved scope of work. Throughout the project the vendor will be responsible to perform the quality control and risk mitigation functions. These actions are accomplished through a weekly risk report [WRR] which includes a milestone schedule, cost and time deviations, and performance metrics.