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INPUT/Output:

Performance-Based Acquisition: Paradigm Shift at a Crossroads  (Oct 2007)

This INPUT/Output report examines Performance-Based Acquisition (PBA) as mandated by the Office of Federal Procurement Policy (OFPP) and explores the strong implications for vendors wishing to compete under this evolving framework.

Description

Performance-Based Acquisition (PBA) has been lauded by federal acquisition experts as the preferred contracting model due to the way it ties vendor performance to desired agency outcomes. As a way of paying vendors for performance, the Office of Federal Procurement Policy (OFPP) has established ambitious PBA goals for federal agencies.

However, as the Acquisition Advisory Panel recently issued its final report, concerns have been raised about Performance-Based Acquisition due to the significant complexity it introduces in the contracting process and the challenges agencies have establishing performance metrics in complex systems and services. Agencies are in essence at a crossroads in acquisition management. The government is struggling with PBAs and shifting risk to industry. Government is attempting to hold industry to a higher acquisition standard, but industry will be reluctant to bid on PBAs if the risk is too great and the rewards are unclear.

Elements of the report include:

• What industry should expect as the government works through agency guidance
• What percentage of eligible contracting dollars are going toward PBA contracts
• Which recommended improvements has the SARA panel made
• How some agencies are responding to the PBA mandate
• Where vendors should focus their attention or avoid potential risks

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