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Performance-Based Contracting Update . Julia Wise General Services Administration Office of Acquisition Policy (202)208-1168/ What - Definition . A contract structured around the solutions or results desired. FAR 2.101 Problem to be solved? Outcome to be achieved?

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Performance based contracting update

Performance-Based ContractingUpdate

Julia Wise

General Services Administration

Office of Acquisition Policy


What definition
What - Definition

  • A contract structured around the solutions or results desired. FAR 2.101

    • Problem to be solved?

    • Outcome to be achieved?

      PBC Considerations

  • Begin with the end in sight!

  • Know what you want as an outcome!

Old versus new process

Traditional Process

Government Solves the Problem

Performance-Based Process

Contractor Solves the Problem

Old Versus New Process

Tight SOW

  • Use SOW

  • PWS

  • SOO


Change in service

Of Performance





















  • 1991 - OFPP Policy Letter 91-2

  • 1993 – GPRA

  • 1994 – FASA

  • 1994 – OFPP Pilot Project for PBC

  • 1996 – OFPP Best Practices PBC Guide

  • 1997 - FAR included PBC

  • 2001- FAR added a preference and order of precedence.

  • 2001 - OMB memorandum M-01-15 -PBC Performance Goals.

  • 2003 - OFPP issued a report proposing to change the FAR to make PBC more flexible, broaden the description of PBC; and reduce the universe of “eligible service contracts”.

Far changes from ofpp report pbsa contracting for the future
FAR changes from OFPP Report PBSA: Contracting for the Future

  • FAR Case initiated to implement recommendations from the OFPP report on PBSA: Contracting for the Future

    Proposing to amend the Federal Acquisition Regulation (FAR) by

    1) changing the term performance-based contracting (PBC) and performance-based service contracting (PBSC) to performance-based acquisition (PBA) or performance-based service acquisition (PBSA) in FAR Parts 2, 7, 11, 37, and 39, where appropriate;

    2) adding applicable PBSA definitions to FAR Part 2; revising FAR Part 11 to clarify the order of precedence for requirements; and

    3) modifying FAR Part 37 to broaden the scope of PBA and give agencies more flexibility in applying PBSA methods to contracts and orders of varying complexity and reduce the burden of force-fitting contracts and orders into PBA, when it is not appropriate.

Far changes from sara
FAR Changes from SARA Future

  • 2003 – SARA signed November 2003

    • Section 1431 Use FAR Part 12 and PBC when certain conditions are met.

    • Section 1431 (b) Requires OFPP to establish a Center of Excellence in Service Contracting – clearinghouse for best practices

Myths realty

Myths Future

1 – PBC is New.

2 – PBC is a type and method of Contract.

3 – It is a contracting duty.

4 – PBCs use broad PWS and the contractor defines the outcome.

5 – PBC fits every service.


1 - It is not new. We bought the first

airplanes from the Wright Brothers

using a performance based SOW.

2 - It is not a type of contract. It is an acquisition

strategy that describes your requirement in terms

of results. Any contract type may be used.

3 – It is the duty of the Program Manager

but the Acquisition Team should be involved

upfront to help define the problem to be


4 – The Government clearly states the


best solution from industry.

5 - PBC is not a one size fits all strategy. It is only applied to eligible services.


Who team
Who – Team Future

  • The Acquisition Team – FAR 1.102-3

  • Program Office

    • Technical community

    • Quality Assurance personnel

    • Business and financial

    • User Community

  • Contracting –

    • PCO,

    • ACO

  • Industry

  • Legal

    Tip: Form the team as early as possible.

  • How elements
    How - Elements Future

    • Performance work statements (PWS) or Statement of objectives (SOO).

    • Measurable Performance Stds. (MPS) and Quality Assurance Surveillance Plan (QASP) (FAR 46.013 and 46.401 (a)).

    • Price reduction mechanism for performance issues. (FAR 46.407).

    • Performance incentives (PI), if appropriate

    When application
    When – Application Future

    • PBC is used to the maximum extent practicable when acquiring services. Exceptions: A-E, Construction, and Utility services.

    • Use the following order of precedence-

      • FFP PBC or task order

      • A PBC or task order that is not FFP

      • A contract or task order that is not PB.

    Far references
    FAR References Future

    • FAR 1.102, Statement of Guiding Principles for Federal Acquisition System.

    • FAR Part 2, Definition.

    • FAR Part 7 Acquisition Planning.

    • FAR Part 10, Market Research.

    • FAR Part 11, Describing Agency Requirements.

    Far references1
    FAR References Future

    • FAR Part 16, Types of Contracts

    • FAR Part 37, Service Contracting.

    • FAR 37.102, PBC preference /precedence.

    • FAR Subpart 37.6, PBC policies/procedures.

    • FAR Part 46, Quality Assurance.

    Pbsa sources
    PBSA Sources Future

    1. OFPP Policy Documents: go to PBSC section.

    2. GSA PBC Website: (underconstruction)

    3. Seven Steps to PBSA website:

    See vetted sampled under the Library

    New Feature

    Help on line
    Help ON-LINE Future