MANAGEMENT APPROACH

PearlNet takes great pride in providing the highest quality support and services to all our clients. We seek to always improve our processes in order to improve quality and reduce costs which we pass on to our customer. We have quality processes in place to help ensure quality products and services

For each contract an overall program manager will be selected by PearlNet senior management to oversee planning, implementation, cost accounting, tracking, and reporting in accordance with the contract requirements. Since the contract will be a task ordered contract, the program manager will determine, for each task order, if a task manager is required and assign one to the task. The task manager will be responsible for ensuring the task order is planned and executed properly, meeting all PearlNet accounting, reporting, and quality standards for the given task. The program manager is the overall Point of Contact (POC) with the customer and contracting officer, although the task manager may interface directly with the COTR as required.

If the task order requires additional expertise not possessed by PearlNet, we will subcontract to a small business that has the capabilities and expertise needed. We will ensure the subcontractor is properly registered in the CCR and we will enter their information into the Seaport-e Contractor Information Registry as one of our team members. We will conduct a Vendor Qualification Audit prior to entering into a contract to ensure the subcontractor has an adequate quality management system. We will further ensure that all government reporting, cost accounting, and quality requirements are flowed down to each subcontractor. If the subcontractor does not meet PearlNet's standards, we will ensure that our standards are flowed down and will ensure, via periodic quality audits that the subcontractor is following our required standards. Subcontractors who do not perform to our standards may be terminated for cause and another subcontractor selected to complete the subcontracted tasks.

1. PROJECT QUALITY

We have established PearlNet's Quality Assurance Procedures (QAP) and defined repeatable processes which are tailored into a contract specific QA manual that is provided electronically to all subcontractors. Based on this guidance and the requirements of Performance Based Program (PBP) milestone requirements, each Task Order has a detailed quality requirements plan. These plans point to repeatable processes, reduced to documented, clear procedures, that key to cost savings and to achieving best practice solutions for the customer.

The goal of our quality assurance program is producing quality deliverables the first time, every time. That is not always possible. The more likely course of action is using a continuous improvement program that results in documented guides for all levels of performance. Thus, we are focusing on the processes by which functional quality requirements are applied to tasks, in-process reviews by our Management team for conformance to requirements and production quality reviews by our second level technical team prior to delivery. Our approach is simple:

1.1. Plan

Each project or Task Order must have a project plan that describes the scope of the project, the Work Breakdown Structure (WBS) to at least Level 3 or down to the work package level if a complex task, the Quality Gates (Q-gates) to ensure quality execution and defect prevention, and a Gantt or PERT chart showing the interdependencies and work flow of the project. The critical path must be identified as early as possible in the planning process so project management, engineering, and QA can perform risk planning to mitigate the risk to the project completion on time.

1.2. Execute

Project Management and engineering execute the project plan. Measurement data is collected and analyzed by QA to determine if the processes are being followed, defects found are being corrected in a timely manner, the RVTM is being maintained, and deliverables are correct and meet the contract requirements.

1.3. Monitor & Measure

QA monitors the processes used in performance of the contract and measures progress of the performance as required by the QA Plan, industry standards, and contractually required standards. Measurements include tracking the Critical Path and ensuring all critical dates and tasks are being met, tracking deficiencies to closure, monitoring and analyzing deficiencies to determine preventive actions that may need to be taken to ensure continuous process improvement. Project management tracks schedule and cost to determine the project remains on schedule and within cost.

1.4. Adjust

If any process deviation occurs or performance becomes substandard, QA will recommend changes or corrective actions to bring the process and/or performance back on track to project management. QA has the authority to elevate problems as high as necessary to resolve the issue, although QA will attempt to resolve the issues at the lowest level possible. Should measurement data reveal the project schedule or cost is in danger of not being met, project management will take necessary steps to realign or mitigate issues to bring the project back on track.

1.5. Deliver

The whole focus of the PearlNet team is to ensure on time, cost effective delivery of a quality product or service that is as free of defects as possible, and that meets or exceeds all required standards.

This focus on documented standardized processes for our activities ensures that our successful deliverables are repeated every time and we can integrate changes into our processes in a systematic and uninterrupted mode, producing predictable, measurable results.

The PearlNet approach is focused on defined repeatable processes, which are key to achieving documented step functions resulting in high quality with cost reductions. They form the basis for a continuous quality improvement philosophy at PearlNet.

2. Quality Planning

We measure and maximize quality through a two pronged approach. PearlNet has prepared and maintains a corporate level Quality Assurance Plan that provides primary guidance to our management and technical teams. We use PearlNet's defined processes as a top level requirement, then tailor these processes to meet specific customer requirements and we also provide those processes to our subcontractors and monitor their adherence to those processes throughout the life of the project.

For example, for a highly technical task or a complex financial management implementation task we expect the principal subcontractor to develop and maintain a Task Order specific QA plan. Such plans would be provided to our Program Manager and QA for review and determination that their QA Plan is in conformance with PearlNet's QA processes. If a smaller company does not have an adequate approach to QA we will provide them with PearlNet procedures that they may follow or adapt to their organizational needs. QA will ensure compliance to those procedures with periodic QA audits.

Where discrete events are not the measures of quality, we will implement a performance based Project Excellence system to assess our team performance and customer satisfaction. PearlNet has implemented Project Excellence as a means to interface with our customers through an independent PearlNet QA system (not directly associated with the client or the project team) to obtain performance feedback from the customer as well as collecting and analyzing objective performance measures. This provides top level management a yardstick to determine performance and to make changes when necessary. This method helps PearlNet management to make continuous improvement an integral part of project management and execution, maintain high quality, and manage cost containment.

2.1. Project Excellence Our Project Excellence system is designed to involve the customer as an integral part of our quality process, ensuring that our quality objectives meet the customer's needs, and that the customer knows and has visibility into our process, as well as having direct access to our metrics and measurements of performance during the life of the contract or duration of the task order.

Performance Based contracts are designed to give the customer the "Best Value", where best value is defined as:

The outcome of any acquisition that ensures customer needs are met in the most effective, timely, and economical manner.

The key attributes of Performance based contracting are:

• Outcomes based on expected results NOT Activities to be conducted
• Clearly defined objectives
• Clearly defined timeframes
• Performance incentives
• Performance monitoring

Each project must have specifically defined requirements that can be tracked via a Requirements Traceability Matrix (RTM). This RTM maintains the project's or task order focus on the customer requirements to be delivered. The project manager will develop a Work Breakdown Structure for each task order or project, and define the project schedule to meet the customer's required timelines for performance or delivery of the product.

The project manager will make resource assignments and incorporate those in the project scheduling, and will report each month the schedule metrics of cost variance, schedule variance, estimate to complete, and estimate at completion. These will be made available to the customer as requested.

The project manager will identify, as part of the planning process, the critical path, and will manage to that critical path to ensure the project or task order remains on schedule.

2.2. Corrective Actions

If a product or service delivered or being developed has a defect, or does not meet the customer's requirements or needs, a problem report for a corrective action is documented with the defect or substandard specifics fully defined, a timely approach to correcting the problem is documented, and a time frame for implementing the correction is also attached to the problem report. This ticket information is provided to the customer or made available to him online, and is given a tracking number and closure date for when the problem is expected to be corrected.

The number of problem reports will be measured against the product baseline, and will be a measure of quality performance for each task order or contract. Another measure of quality performance is the time required to correct the problem, and the time to correct versus the time estimated.

Other performance metrics will be based on the performance requirements and objectives listed in the contract or individual task order. These performance measures will be defined and approved in coordination with the customer during the planning phase of the task order.

2.3. Quality Surveys

One way of measuring performance and customer satisfaction is via the use of customer surveys. These surveys are developed specifically for each task order or contract, based on who the customer is, what service or product is being provided, and the goals and objectives the performance is being measured against. The surveys will be as objective as possible, and will provide metrics with which PearlNet senior management can assess how well the customer needs are being met. These surveys will be combined with other performance measurements to determine overall, how well PearlNet is meeting the objectives and required outcomes of the contract or task order.

3. Documented Quality Assurance

PearlNet's approach to quality assurance is derived from our implementation of the ISO 9001:2000 quality model, which is the key to our management of process quality, product quality, and continuous quality improvement processes. This provides us the best assurance of our delivering quality products on time and with consistency. At the core of this approach to managing our business processes is the development and structuring of repeatable processes. All functions that are frequently performed can be documented as a series of steps necessary to be performed every time the function is initiated.

Our formal, documented quality assurance plan is designed to maximize quality, keep defects from being introduced during the project development cycle, and ensure delivery of a quality product without the need for rework. It includes sets of repeatable processes and associated checklists that assure that all critical functions are performed for each task. The product is checked for form, format, and technical content before final delivery to the designated technical point of contact and other designated recipients of deliverables. Each time a process is performed the user follows a checklist to verify completion of each of the various steps in the process.

At certain points during the process a Q-gate (Quality gate) check is made to verify that the process has been followed correctly to that point, measurement data has been analyzed and reported, the product meets or exceeds the customer's requirements, and the project is ready to proceed to the next phase, or deficiencies or quality problems were encountered that must be corrected before the project is allowed to proceed to the next phase. QA and engineering must certify to project management that the project is ready to proceed to the next phase before management allows work to continue.

Our quality process requires the creation and maintenance of a Requirements Traceability Verification Matrix that lists the customer's specified requirements, the engineering derived requirements and documentation necessary to ensure the customer's requirements are met in the design, and the testing requirements adequately test for meeting the entirety of the customer's requirements and the required standards called for.

Each month we provide formal reports to the technical point of contact in compliance with typical reporting requirements of most tasks. This comprises the monitoring and adjustment phases of our approach to quality assurance/control. The monthly report provides a complete technical status of the task in process, if required, and the Estimate To Complete (ETC) the Task Order, as well as the Estimate At Completion (EAC). We also identify the critical path and if there have been any deviations from the critical path. If required by the contract, PearlNet will report cost and schedule information based on the WBS Level reporting requirements in the contract.

Our final step is delivery of the finished products. Before we make the final deliverable, a qualified senior person (s), the Program Manager, and a senior QA manager check the form, format and technical content, test results, compliance to standards, etc. A signoff and approval indicate that we are ready to make the final deliverable. The person designated to receive the product must receive and approve the deliverable. The PearlNet Team wants the receiver to not only approve our product, but also to assess our performance at the time of delivery. This permits the use of feedback to assess the deliverable as well as the process by which the Team provided the deliverable. Deficiencies and shortfalls in performance are compared against our repeatable processes so that corrections can be made in order to repeat our successes and improve our future performance.

A good quality control system reduces risk, but does not eliminate it. Our Project Manager stays abreast of performance requirements and accomplishments and will step in with corrective action when necessary. For highly technical problems we are drawing from our teammates, or if necessary, go outside to get expert advice for solutions. We are always making any necessary changes to our processes to correct any deficiencies and to re-train team personnel so that future performance reflects that improvements and successes will be repeated on similar tasks, achieving a truly repeatable process.

We also know the value of learning from mistakes. We document lessons learned based on a post mortem of each project that we share with all of our team and subcontractors to determine ways to move any deficient performance to the outstanding category.

**Note: This Management Approach was prepared by PearlNet, LLC personnel. No team member or consultant was involved in preparing this Management Approach