Government Performance Based Contracts
Avoid Costly Mistakes in Performanced Based Government Contacts
Overview
The federal government has now mandates that certain service contracts be performed and procured on a performance based basis. This means that the days of telling the contract how to do every single aspect of the contract are over for the most part.
The Concept
Performance based contracting has been around for over two decades. However, during 2003 and 2006 there has been more of a push to changing the way the government does business. As a result training is becoming a large requirement. Our office has stepped up to the plate and is available to provide training to contractors, federal and state agencies in this area.
Many state governments are now struggling to adopt the new concept due to the fact of receiving government grants or other government funding. The nation as a whole is far behind in the concept and there is more of a need for performance based training.
What is performance based contracting?
Performance based contracts focus on the seven steps to performing the contract. Trainers for these types of acquisitions should focus in this area. As the government post their new opportunities you will see the trend and development in performance based performance work statements (PWS). Some still tell the contractor what to do and how to do it. However , the government’s performance work statements are getting better overall.
- Agency should not dictate to the contractor how to perform the contract
- The government should focus on results only
- Agency should grade the contractor on its own quality assurance plan
- Contractor’s quality control becomes a changing document thorughout the contract life cycle
Applicable Federal Rules
FAR Part 37 governs the majority of guidelines for performance based contracting. One article claims that performance based contracting is difficult on the commercial industry. However, other studies show that both the government and the contractor saves money. There is an argument to be made that the contractor can benefit form the new guideline as compared to when the government dictated materials, how -to etc. The biggest finding is that the government saves money. If this is true, then an argument can also be made that the economy as a whole wins.
Past performance “report cards” per FAR 42.15 should reflect adherence to performance requirements when a PWS has been used. Performance under PBSC provides better data for evaluation of past performance under other solicitations. A powerful incentive of excellence and customer satisfaction is created when contractors know their performance will influence future award decisions.
There are many critics of performance based contracts against OMB. However, when there is change, there are critics. The truth of the matter is that if the government has been paying more for government contract awards, then change is needed where performance based contracts saves tax payers dollars.
Problems with government Solicitations and RFPs – Avoid Mistakes
Many federal service contracts are offered to the public under performance based standards. Many contractors typically do not understand the statements of work as written in the RFP or solicitation. This results in a proposal that may be rejected. Other problems include:
- Misunderstanding of Quality Assurance Surveillance Plans (QASP)
- Belief that your common commercial quality assurance plan will suffice
- Understanding how pricing can directly relate to the government’s requirements
If you are a government contractor that is involved in government service contracts, you may want to get ahead of the game and invest in your performance based contracts training. It will be mandatory soon. For further information or guidance, contact our office or call us at 1-866-601-5518 / 720.941.7200.
Tags: government contracts, pbsc, performance based contracts
