Push Is On For Performance-Based Contracts The Office of Federal Procurement Policy has told agencies that 40% of services contracts in 2005 should be performance-based. In a Sept. 7 memo, OFPP’s associate administrator, Robert Burton, wrote, “Agencies should apply PBSA [performance based services acquisition] methods on 40 percent of eligible service actions over $25,000, to include contracts, task orders, modifications, and options, awarded in fiscal year (FY) 2005, as measured in dollars.” He said the office will evaluate the target at the end of the year. OFPP has been pushing performance-based acquisition for years, arguing that it makes more sense for an agency to tell a contractor what it wants and let the contractor determine the best way to get the result. Some acquisition professionals refer to the method as “results-based.” Performance-based contracts may include incentives – monetary or otherwise – and should include performance standards that the contractor must meet. OFPP said a contract may be counted as performance-based if more than half the work is performance-based. Burton said some services are not eligible for performance-based contracts, including some architect-engineer services, construction, utility services and services that are incidental to supply purchases. Burton and other senior procurement officials have acknowledged that performance-based acquisition is not widely understood in federal contracting shops and that agencies operate under different definitions. Last year OFPP issued “Seven Steps to Performance-Based Service Acquisition,” available at www.acqnet.gov. In addition, the Federal Acquisition Regulation councils issued a proposed rule July 21 to better define performance-based acquisition and broaden its use.