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Evaluating and Managing Performance-Based Contracts

Now Available
In-House

  • Performance-Based Acquisition
  • Acquisition Planning
  • Source Selection Techniques
  • Contractor Bid Strategies and Decisions
  • Contract Performance
  • Contract Administration Challenges
  • Quality Assurance & Quality Control
  • Metrics for Management

Performance-Based Contracting has been identified by federal agencies as an effective way to acquire quality goods and services within available budgetary resources. For fiscal year 2002, the Office of Management and Budget established a goal that 20% of all federal service contracts be performance-based. This percentage increases to 50% by 2005. Federal agencies are responding by changing the way they have traditionally done business. These changes will drastically affect the skills needed by agency procurement personnel. Furthermore, contractor bid strategies that have been successful in traditional procurements, may not be successful and could even be disadvantageous in a performance-based procurement.

In the past, performance-based contracting training courses focused on the planning stages of the acquisition. Students were instructed on how to perform market research, define requirements and write a performance-based statement of work. While these are critical elements of performance-based contracting, the best planned performance-based contract will fail if the contract is not administered properly. The role of agency quality assurance and technical personnel during contract administration is fundamentally different under a performance-based contract than it was under traditional contract administration procedures. In a performance-based contract, the focus on results means that the contractor must perform many of the quality control functions traditionally performed by government personnel. Under this arrangement, both contractor and agency personnel must learn new skills.

Performance-based contracting also impacts the source selection process. As agencies increasingly use performance-based specifications, proposal preparation strategies must change. Instead of demonstrating their ability to comply with massive federal specification documents, offerors must be able to prepare proposals that demonstrate innovative performance approaches that manage risk while ensuring quality.

This course has been developed to address these critical areas to enable students to gain a thorough understanding of the entire performance-based contracting practice. In addition to covering the essential elements of performance-based contracting, such as developing effective work statements, performance standards, and quality assurance plans, this course will focus on the challenges that arise during contract administration. It will also cover the contractors' role in the process, including making the initial bid/no bid decision, preparing the offer, and performing the contract.

Since the success of performance-based contracting requires the support of the entire procurement team, it is essential that all personnel involved in a performance-based procurement thoroughly understand the goals and procedures of the process. Therefore, this course will be useful to agency contracting personnel, quality assurance monitors and program managers. It will also provide essential information for contractor personnel involved in preparing bids and proposals, performing performance-based contracts and providing quality control.

The Course Curriculum

  1. Overview of Performance-Based Contracting
    1. Concept and Objectives of Performance-Based Contracting
    2. Statutory and Regulatory Framework
    3. Current Emphasis on Performance-Based Contracting
    4. Implementation Challenges
  2. Essential Elements of Performance-Based Contracting
    1. Describing Tasks and Writing the Performance Work Statement
    2. How to Develop Performance Standards
    3. Determining the Acceptable Quality Level
    4. Development and Purpose of the Quality Assurance Surveillance Plan
    5. Development of Effective Incentives
  3. Source Selection Techniques Applicable to Performance-Based Contracting
    1. Unique Aspects of Performance-Based Source Selections
    2. Key Elements of a Successful Source Selection
    3. The Critical Role of Market Research
    4. Performance-Based Requirements Definition
    5. Factor Development in Performance-Based Source Selections
    6. The Role of Oral Presentations in Performance-Based Selections
    7. Evaluation of Past Performance
    8. Effective Use of Exchanges With Offerors
    9. Making and Supporting the Award Decision
  4. Contractor Strategies in Performance-Based Contracting Source Selections
    1. How Performance-Based Source Selections Differ From Traditional Source Selections for Contractors
    2. Redefining "Best Value" in the Performance-Based Contracting Environment
    3. Responding to a Performance-Based Request for Proposal
    4. The Cost to Non-Cost Relationship
    5. The Significance of Factor Weights
    6. How to Write Performance-Based Contracting Proposals That Persuade
  5. Contract Administration Issues in Performance-Based Contracting
    1. Contract Administration Functions
    2. The Effect of Performance-Based Contracting on Risk Allocation
    3. The Role of the Changes Clause in Performance-Based Contracting
    4. Contract Performance Measurement Techniques
    5. Quality Assurance and Quality Control Under Performance-Based Contracts
    6. Inspection and Acceptance of Goods and Services
    7. Claims and Conflict Resolution Techniques
  6. Workshops on the Path to Performance-Based Acquisition
    1. Establishing the Team
    2. Identifying and Describing the Objectives
    3. Finding Private and Public Sector Solutions
    4. Developing the Performance Work Statement
    5. Measuring and Managing Performance
    6. Selecting the Provider
    7. Managing Contract Performance
  7. Tying It All Together
    1. Organizational Requirements in Preparing, Winning and Executing Performance-Based Acquisitions
    2. Metrics for Management
    3. Cultural Change/Cultural Issues
    4. Contemporary Practices

The Course Director

Robert J. Bowes   Principal and Owner of Acquisition Enterprises, a consulting firm providing business and management research and support services; management consulting; and technical contracting expertise • 15 years experience in training and supporting capture teams in business pursuits in the commercial, federal, civil and military sectors • Supported numerous Performance-Based Acquisitions, including participation with clients in Government IPTs preparing for performance-based negotiations • 18 years of Government contracts experience covering all phases of the acquisition cycle • Principal co-author of definitive studies and handbooks on business and intellectual property issues associated with software reuse issues. The handbooks have received wide dissemination throughout the Department of Defense • Supported numerous start-up and small companies in development of market identification, business planning and supporting organization and policies • Fellowship, Center for Advanced Engineering Study, Massachusetts Institute of Technology • Masters in Business Administration, Western New England College • Bachelor of Arts (Economics), Northeastern University.