Agencies may not meet new procurement reform goal

Confusion over the requirements of performance-based contracting may keep agencies from fulfilling a key procurement reform in President Bush's management agenda, an Office of Management and Budget official said Thursday. In a March 9 memo, OMB Deputy Director Sean O'Keefe told agencies to use performance-based techniques on 20 percent of all service contracts in fiscal 2002. But even if agencies report they have met the 20 percent goal, they may still fall short of the government's standards for performance-based contracting, according to Linda Oliver, associate administrator of procurement law, legislation and innovation in the Office of Federal Procurement Policy. "I don't know if we will reach the [20 percent] goal once it has been checked," said Oliver at an outsourcing conference sponsored by the Potomac Forum, a Maryland-based training firm for federal and industry professionals. OFPP will review whether agencies are doing performance-based work by sampling contract information in the Federal Procurement Data System database. With performance-based contracting, agencies describe the end results the government needs; vendors must figure out the best way to meet those needs. Procurement officers are responsible for coding eligible contracts as "performance-based" in the Federal Procurement Data System. But many contracting officers are unaware of the government's requirements for performance-based contracts, said Oliver. "You can think you are doing performance-based contracting and not meet the standards that have been set up," she said. The Procurement Executives Council, an interagency council of top acquisition officials, has set standards for performance-based work, Oliver said. To qualify as performance-based by the council's standards, 80 percent of the dollars in a contract award must meet the four criteria of performance-based service contracts set out in the Federal Acquisition Regulation. Under the FAR, such contracts must:
  • Describe contract requirements in terms of results, not methods of work.
  • Use measurable performance standards and quality assurance surveillance plans.
  • Include performance incentives where appropriate.
  • Specify how payment will be reduced if services are not performed or do not meet requirements.
The remaining 20 percent of the dollars in a performance-based contract can be exempt from these requirements, according to a council official. "We are trying to allow agencies to get credit for doing performance-based work when not all the dollars spent [on a contract] meet performance standards," the official said. OMB will step up efforts to inform agencies about these standards, according to Oliver. At present, the standards are not listed on the Web sites of the Procurement Executive Council or OMB, although they may be found in amendment four to the reporting manual for the Federal Procurement Data System. OMB plans to release a guidebook on performance-based contracting in the next few months to help contracting officers learn how to write performance-based contracts. The Pentagon released a similar training guidebook in January. OMB has also resolved some details about how the 20 percent goal will be implemented, according to an official familiar with the process. The agency will apply the 20 percent target only to service contracts worth $100,000 or more, said the official. O'Keefe's March 9 memo applied the 20 percent goal to contracts worth $25,000 or more. Members of the Procurement Executives Council urged this revision so the performance-based directive would not conflict with existing guidance on procurements less than $100,000. The March 9 memo also restricts the 20 percent target to "total eligible service contracting dollars." OMB will exempt architecture and engineering and construction contracts from the performance-based goal, the official said.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.