4.0 Strategic and Operational Performance Indicators

4.1 Client Satisfaction

Completing each project or task to the satisfaction of the client is critical to the success of DCC operations. To this end, the Corporation tracks client satisfaction as one of its key performance indicators. DCC interviews clients individually, in person, once a year. Each client has the opportunity to comment on the service DCC provided on all projects in which the client was involved.

In 2008–09, DCC conducted client satisfaction surveys with 364 client representatives involved in 1,051 projects. Scores are weighted according to the value of each service level arrangement (SLA). For example, a score based on an SLA valued at $1 million is weighted more heavily than a score based on an SLA valued at $10,000. Service delivery rating scores are based on a scale of one to five. A score of three meets expectations and a score of four or five means DCC surpassed expectations. During 2008–09, 92% of clients indicated DCC met or exceeded client expectations, with 59% rating DCC’s service at four or more and 33% offering scores of between three and four.

DCC considers all feedback received during this process and takes swift action where required, especially when a client gives DCC a score of less than three. Each year, DCC receives a range of feedback. In 2008–09, areas where respondents noted DCC could improve included contracting timeliness and communications. DCC is taking action in these areas as a result of a slight decrease in the overall rating.

Timeliness of construction contract completion
Completing contracts on time is a key component of client satisfaction. DCC monitors the timeliness of construction contract completions and works with clients to minimize schedule slippage. When slippage does occur, DCC ensures that DND knows the reasons. In 2008–09, 71% of completed construction contracts were finished by the established completion date, three percentage points better than the 2007–08 result of 68%. Another 16% were completed within one to 30 days and 13% were completed in over 30 days.

Change order values
The change order values in 2008-09 were consistent with the trend established in 2006-07 and 2007-08. The change in total award value for the year was 10.3% with 6.4% arising from design changes and 3.9% arising from site conditions. Although formal targets are not set for this indicator, DCC tracks this information in order to inform the client and to help facility users manage any schedule risks associated with construction.

4.2 Utilization

The utilization rate indicates the hours spent on contract-related functions as opposed to non-billable functions. It is an important performance indicator, as well as a key financial management tool. DCC’s target utilization rate is 70%. In 2008–09, the utilization rate was 74.4%, an increase from 71.4% in 2007–08. This past year has seen a significant increase in the utilization rate, in contrast to the trend over the past few years. This rise was the result of increased management focus on operational efficiency and productivity at all levels of the organization.

4.3 Retention Rate

DCC’s success depends on its ability to put the right people in the right place at the right time. To that end, the recruitment and retention of the types of employees needed to guarantee a high level of service to the client is critical. There will always be some turnover of staff, due to the seasonal and geographically cyclical nature of DCC’s work. In 2008–09, DCC’s retention rate remained essentially the same as the previous year. Competitive labour market conditions in certain regions of the country, particularly the western provinces, strongly affected retention.

4.4 Direct Personnel Expense Multiplier

The direct personnel expense multiplier (DPEM) is the factor by which DCC multiplies direct project personnel expenses to recover overhead costs. These expenses include salary costs, payroll benefits and compensated absences, such as vacation, sick days, holidays and professional development time. The target range for this indicator is between 1.50 and 1.60. With increased business volumes, the Corporation has been able to minimize billing rate increases over the past five years while still generating sufficient funds to meet its operating needs. That is the reason why the DPEM has fallen below the targeted range in recent years. Although the 2008–09 rate of 1.45 was higher than the previous year’s rate, it remained below the target range.

4.5 Professional Development to Salary Cost Ratio

DCC’s ability to serve its client is heavily dependent on the skills of its employees. Therefore, training and development are high priorities. DCC has established a target for spending on training and development at 3% of total salary costs for direct education costs.

Over the last four years, a portion of the allocation has been redirected from direct training to the design and development of a comprehensive training and development framework. As a result, during
2008–09, DCC spent only 2.1% of salary cost on direct training, compared with 2.5% in 2007–08. The significant investment over the past several years in developing a curriculum of internal courses to meet key training and development needs has reduced demand for—and, therefore, the cost of—external training; it has also increased the time spent on internal training. This is a positive return on the investment in course development. However, it also indicates a need to develop a new performance indicator that is not based solely on external training and development costs.

DCC will change the primary indicator for 2009–10 to report the total annual investment in professional development, defined as a combination of direct expenditures and the cost of staff time spent on educational activities, expressed as a percentage of total salary cost. The target for 2009–10 will be 5%. Reported on this basis, the percentage was 5.3% in fiscal 2008–09 and 5.8% in fiscal 2007–08. Although the target is 5%, the Corporation’s goal is to spend no less than 5%. DCC acknowledges that the rate may fluctuate from year to year, depending on planned activities to develop and maintain the internal course curriculum.

4.6 Timeliness of Procurement

		2008–09
Contract type	Target (days)	Number of requests	Percentage on target	Median (days)
Construction
Regular	35	290	37.2%	40
Tender boards	25	514	29.8%	29
Quick-response tenders	14	173	37.6%	16
Design-build	120	0	N/A	N/A
Consultants
SELECT	25	245	29.0%	34
One-step RFPs	60	66	22.7%	88
Two-step RFPs	120	10	10%	183

DCC’s clients want to begin work as soon as possible after receiving project approval, making timeliness of procurement a key performance indicator. DCC intentionally sets aggressive targets for the timeliness of construction and consultant procurements. The targets represent a reasonable length of time from the receipt of a procurement request from DND to the awarding of the contract. DCC attempts to meet these aggressive targets on 50% of procurements. Factors that affect performance against the targets include the availability of funding or bid documents, bid anomalies and changes to the scope of the work during the procurement process. Additional time required as a result of these factors is not included in the targets and accounts for the variance. To date, DCC awards construction contracts within 11 days of tender close, on average, which the industry considers a very reasonable timeframe.

4.7 Successful Contracts

DCC recognizes the time and effort that the industry expends to prepare and submit tenders. Consequently, to reduce the risk of a failed tender, DCC screens all projects for bidability. At year-end, 95% of DCC tender calls had resulted in the award of a contract. This figure compares to 95.1% in 2007–08, 94.7% in 2006–07, 93.6% in 2005–06 and 99.5% in 2004–05. The most frequent reason why a tender does not result in a contract is that the tender price exceeds the approved budget amount.

4.8 Legal Claims

The value of contract claims before the courts is a direct indication of DCC’s efforts to resolve contract disputes. In 2008–09, DCC legal claims valued at $9,739,605 were settled for a total value of $436,498.

As at March 31, there were 12 claims outstanding with a total value of $6,640,209, compared with $14,791,595 outstanding at the end of 2007–08. These amounts are consistent with the trend of the past five years. The financial risk associated with contractual claims is managed by DND and does not have any financial impact on the Corporation.