New wine, new bottles

Steve LeSueur

Industry executives have long complained that most performance-based contracting has been more hype than reality. As one executive told us: "In many instances, they're just taking the old contract, stamping 'performance-based' on it, and then proceeding as if nothing has changed."

To make matters worse, this contracting method has been renamed "performance-based services acquisition," a bureaucratic mouthful that gives contracting officials one more reason to abandon it at the first opportunity.

Still, the Bush administration is serious about pushing forward with performance-based contracting. The Office of Management and Budget this month issued new guidelines aimed at creating a more realistic policy. One of those guidelines changed the definition of a performance-based acquisition, saying that only 50 percent of a contract's requirements must be performance-based for the contract to be considered performance-based. Previously, the requirement was 80 percent.

Why the change? Too many procurement officials were approaching performance-based contracting as an all-or-nothing approach. Administration officials hope the less-stringent definition will encourage more agencies to try performance-based methods.

Not that there hasn't been progress. Our package of stories on performance-based contracting points to successes such as Accenture Ltd.'s work with the Defense Logistics Agency.

To see where performance-based acquisition stands and where it's heading, check out our collection of articles by Staff Writers William Welsh, who wrote the lead story, Gail Repsher Emery, Roseanne Gerin and Dawn Onley.







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