Original Source: Performance Based Contracting
“Procurement organizations should seek to improve performance and lower costs through the use of performance based contracts that: (1) describe the requirements in terms of results required rather than specifying how the work is to be accomplished; (2) set measurable performance standards; (3) describe how the contractor’s performance will be evaluated in a quality assurance plan; (4) identify and use positive and negative incentives, when appropriate.
Element 1.1: Developing Performance Based Contracts Procurement should structure performance work statements in contracts around the outcomes and timeline of the work to be performed, that is, what is to be performed rather than how to perform it.1 There are two ways to develop a specification for a performance based acquisition: by using a performance work statement (PWS) or a statement of objectives (SOO).2 Performance Work Statement (PWS)3 The Performance Work Statement is similar to a statement of work and is used in performance-based requests for proposals (RFP). A PWS should: n Describe the work in terms of the required results rather than either “how” the work is to be accomplished or the number of hours to be provided. n Enable assessment of work performance against measurable performance standards. n Rely on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.
Statement of Objectives (SOO)4 The SOO is a concise and brief document (e.g., under ten pages) that provides high-level objectives of the acquisition. It is provided in the solicitation in lieu of a written Statement of Work (SOW) or Performance Work Statement (PWS). The SOO must include: n Purpose n Scope or mission n Period and place of performance n Background n Performance objectives, (i.e., required results)5 n Any operating constraints n The government-prepared SOO is usually incorporated into the RFP as an attachment. At contract award, the contractor-proposed statement of work (solution), or final negotiated statement of work, must be incorporated into the contract…”
https://www.nigp.org/docs/default-source/New-Site/global-best-practices/performancebased.pdf?sfvrsn=2
Contributors: Open SourceCategories: SIG U Resource, Whitepaper
SRC Type: Contract Development, Procurement Operations, Sourcing