It’s a Different Contracting World!
    It’s a Different Contracting World!
    Performance-Based Acquisition fundamentally 
     Performance-Based Acquisition fundamentally 
     changed contract formation and administration
     changed contract formation and administration
    Objectives structured into contracts and 
     Objectives structured into contracts and 
     multiple incentive arrangements
     multiple incentive arrangements
    Contractors and Federal staff adjusting to a 
     Contractors and Federal staff adjusting to a 
     cultural change
     cultural change
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    When does Contract Management 
    When does Contract Management 
                             start?
                             start?
    Old View
      Old View
      –Started at contract award
        Started at contract award
      –Embodied a post-award orientation
        Embodied a post-award orientation
    New View 
      New View 
      –Effective contract administration starts early with contract 
        Effective contract administration starts early with contract 
        management planning
        management planning
      –Begins during the acquisition planning phase
        Begins during the acquisition planning phase
      –Recognizes the performance-based elements of the 
        Recognizes the performance-based elements of the 
        contract
        contract
      –The Contract Management Plan is in place before or 
        The Contract Management Plan is in place before or 
        shortly after the time of award
        shortly after the time of award
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       The Performance-Based Contract 
       The Performance-Based Contract 
   What are the elements of  Performance-Based 
      What are the elements of  Performance-Based 
      Contracting?
      Contracting?
      Government Protocols Require:
        Government Protocols Require:
         Establish requirements in a results oriented manner
           Establish requirements in a results oriented manner
         Ensure that Contract measures and expectations are measurable and 
           Ensure that Contract measures and expectations are measurable and 
           correspond to work requirements
           correspond to work requirements
         Ensure that Quality Assurance Surveillance Plans are tailored to contract 
           Ensure that Quality Assurance Surveillance Plans are tailored to contract 
           objectives 
           objectives 
         Incorporate cost constraints or cost incentives
           Incorporate cost constraints or cost incentives
      Acquisition Guide
        Acquisition Guide
          Performance Based Contracting Guides – provides guidance 
           Performance Based Contracting Guides – provides guidance 
           on structuring effective incentives
           on structuring effective incentives
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                                                                4
    The Performance-Based Contract
     The Performance-Based Contract
   What are the elements of Performance-Based 
      What are the elements of Performance-Based 
      Contracting? (cont.)
      Contracting? (cont.)
       In 1997 Rules mandated that PBCs
         In 1997 Rules mandated that PBCs
          Requirements are structured in a results or outcome 
            Requirements are structured in a results or outcome 
            oriented manner
            oriented manner
          Positive and/or negative incentives are included
            Positive and/or negative incentives are included
          Quality Assurance Surveillance Plans are required
            Quality Assurance Surveillance Plans are required
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                                                                  5
             What are the Contracting Officers 
             What are the Contracting Officers 
         Responsibilities in Performance-Based 
          Responsibilities in Performance-Based 
                         Contracting? 
                         Contracting? 
    Other Contracting Rules Require:
      Other Contracting Rules Require:
       – Ensure that performance-based contracting used to the 
         Ensure that performance-based contracting used to the 
         maximum extent practicable. 
         maximum extent practicable. 
       – Use contract types that best fits the work and likely to 
         Use contract types that best fits the work and likely to 
         motivate contractors.
         motivate contractors.
       – Use positive or negative performance incentives to the 
         Use positive or negative performance incentives to the 
         maximum extent practicable.
         maximum extent practicable.
       – Quality assurance surveillance plan shall contain measurable 
         Quality assurance surveillance plan shall contain measurable 
         inspection and acceptance criteria corresponding to the 
         inspection and acceptance criteria corresponding to the 
         performance standards of the SOW. 
         performance standards of the SOW. 
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