Online extra: Climbing the performance-based stairway

In 2001, a task force comprised of volunteers from several federal departments created a roadmap to help agencies implement performance-based contracting. Acquisition Solutions Inc., a consulting company based in Oakton, Va., that specializes in advising on procurement policy and strategy, assisted in the process.

The task force developed a template with seven steps for a performance-based services acquisition. To get more detailed information for each step, visit www.acquisitionsolutionsinc.com and click on "Seven Steps to PBSC."

Step 1. Establish the team

  • Ensure senior management involvement and support

  • Tap multi-disciplinary expertise

  • Define roles and responsibilities

  • Develop rules of conduct

  • Empower team members

  • Identify stakeholders and nurture consensus

  • Develop and maintain the knowledge base over the project life

  • "Incent" the team: establish a link between program mission and team members' performance


Step 2. Decide what problem needs solving

  • Link acquisition to mission and performance objectives

  • Define desired results

  • Decide what constitutes success

  • Determine the current level of performance


Step 3. Examine private-sector and public-sector solutions

  • Take a team approach to market research

  • Spend time learning from public-sector counterparts

  • Talk to private-sector companies before structuring the acquisition

  • Consider one-on-one meetings with industry


Step 4. Develop a performance work statement or statement of objectives

  • Performance work statement: Conduct an analysis; apply the "so what" test; capture the results of the analysis in a matrix; write the performance work statement; let the contractor solve the problem, including the labor mix

  • Statement of objectives: Begin with the acquisition's "elevator message;" describe the scope; write the performance objectives into the statement; make sure the government and the contractor share objectives; identify the constraints; develop the background; make the final checks and maintain perspective


Step 5. Decide how to measure and manage performance

  • Review the success determinants

  • Rely on commercial quality standards

  • Have the contractor propose the metrics and the quality assurance plan

  • Select only a few meaningful measures on which to judge success

  • Include contractual language for negotiated changes to the metrics and measures

  • Apply the contract-type order of precedence carefully

  • Use incentive-type contracts

  • Consider "award term"

  • Consider other incentive tools

  • Recognize the power of profit as motivator

  • Consider the relationship


Step 6. Select the right contractor

  • Compete the solution

  • Use down selection and "due diligence"

  • Use oral presentations and other opportunities to communicate

  • Emphasize past performance in evaluation

  • Use best-value evaluation and source selection

  • Assess solutions for issues of conflict of interest


Step 7. Manage performance.

  • Keep the team together

  • Adjust roles and responsibilities

  • Assign accountability for managing contract performance

  • Add the contractor to the team at a formal "kick-off" meeting

  • Regularly review performance in a Contract Performance Improvement Working Group

  • Ask the right questions

  • Report on the contractor's "best performance"


Source: Acquisition Solutions Inc.

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