Use of Legislative Incentive for Performance-Based Contracting Unknown
[Technical Report, Congressional Report]
GOVERNMENT ACCOUNTABILITY OFFICE
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In October 2000, Congress passed section 821b of the National Defense Authorization Act for Fiscal Year 2001, which allows DOD to treat performance-based service contracts or task orders as contracts for the procurement of commercial items under specified conditions. The conditions are that the contract or task order must 1 be valued at 5 million or less 2 define the work in measurable, mission related terms 3 identify a specific end product or output 4 contain a firm, fixed price and 4 be awarded to a contractor that provides similar services to the general public under terms and conditions similar to those offered to the federalgovernment.3The use of performance-based contracts to acquire services offers a number of potential benefits. Performance-based contracts can encourage contractors to be innovative and to find cost-effective ways of delivering services. By shifting the focus from process to results, they hold the promise of better outcomes and reduced costs. In view of the potential benefits, Congress has been encouraging greater use of performance-based contracting, and the administration has set a general goal that 20percent of eligible service contracts should be performance based. 4 DOD has a goal that 50 percent of its service contracts will be performance based by 2005.
- Government and Political Science
- Administration and Management