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Resources for Performance-Based Contracting
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Primer to developing a Performance-Based Contract |
Performance-Based Contracting (PBC) has been identified as an effective means to acquire goods and services. PBC is contracting for results, not best efforts, and involves structuring all aspects of an acquisition around the purpose of the work to be performed. To understand the essential elements of performance-based contracting, such as developing effective work statements, performance standards, and quality assurance plans, and the challenges that arise during contract administration the following resource guide is provided. Essential elements of PBC include:
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Describe the task to be performed in terms of measurable outcomes rather than by prescriptive actions to be performed, expressed in either a Performance Work Statement (PWS) or Statement of Objective (SOO).
- What is the business need?
- What are the results/benefits being sought?
- Is success defined?
- What is the scope ( size, location, period of performance, functionality )?
- How does this effort fit into the goals and strategies of the organization?
- What are known or anticipated risks, dependencies or constraints to be addressed?
- Who are the stakeholders and what are their interests?
- What are the current service delivery arrangements, major contracts with service providers and/or the in-house support,
and what Government Furnished Property (GFP) is provided?
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Develop measures of performance and define acceptable performance.
- Are performance measures assessed against key objectives, outcomes, or benefits?
- Are high level outcome objectives cascaded to performance measures of deliverables?
- Are the measures broad enough to provide a balanced view of cost, schedule and performance?
- Are performance measures clearly defined, together with minimum acceptable levels of performance?
- Have all standards or techniques to be used for measurement been defined.
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Develop process for handling performance that exceeds or fails to meet acceptable performance standards.
- While not mandatory, incentives should be used, where appropriate, to encourage performance that will exceed performance standards.
- Is the approach to investigation and corrective action to improve unsatisfactory performance clearly defined?
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Define how contractor performance will be measured and assessed against performance standards. (Quality Assurance Plan or Quality Assurance Surveillance Plan).
- Based upon the dollar amount, complexity or level of risk acceptable to the organization, what is the appropriate frequency, granularity or level of quality assurance surveillance required?
- Are multiple measures of a deliverable required to reflect multiple dimensions of the service?
- Does the benefit of collecting and reporting a metric justify its cost? Has a tradeoff analysis of alternate or less burdensome measures been made?
- Are subjective measures accomplished without bias, in a reasonable, fair and consistently applied manner?
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Links to additional information on Performance Based Contracting |
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