No pain, no gain with performance based contracting

Agencies that want to see "green" - the highest rating in the President's Management Agenda scorecard - must first learn that effective performance-based contracting takes major management shifts beyond the mere contracting officer.

"It requires a cultural, organizational change," said Ronne A. Rogin, former deputy director of the Treasury Department's Office of Procurement, who retired last week and joined the private sector. "It's bigger than the contracting officer."

But one habit that's begun to take hold, she said, is the move toward drafting a Statement of Objectives to steer contracts. "We're really seeing a lot of success with that," she said after speaking at a performance-based contracting panel at the FOSE trade show in Washington. "It's a less painful way for a program person who doesn't really get it to move toward performance-based contracting without an Excedrin headache."

She shared her secrets to performance-based contracting, namely converting existing contracts, task orders on Indefinite Delivery/Indefinite Quantity contracts and task orders on General Services Administration Federal Supply Service and Government Wide Acquisition Contracts to include performance-based metrics. And to do so now, before the contracts expire or, worse, languish for months or years under impotent measures.

Those latter contracts, in fact, are "probably the best ones to start out with," Rogin said. "Once the contractor understands exactly what they're looking for ... performance will almost immediately start to come up."

People, partnerships and pliability must remain at the forefront of negotiations that guide performance-based contracting, said Robert J. Tomasetti, who heads consulting company RJ Tomasetti & Associates Inc. in Springfield, Va. He said agencies need to partner with industry to determine the best path toward successful contracts, and then remain flexible as that contracting path begins to curve and detour.

Rogin said a task force of five agencies - GSA, NASA and the departments of Treasury, Energy and Defense - has recommended to the Office of Federal Procurement Policy some changes to make that path a little easier for agencies to tread.

Some of those recommendations include adding a definition of Statement of Objectives to the contract's mission, finding more positive incentives for contractors to perform to demands, bringing the credit level for performance-based contracting down from more than 80 percent to more than 50 percent and crossing out roughly 20 contractor services that can't easily be measured by performance metrics.

"Your universe of eligible services gets smaller," Rogin said. "We think your percentage of success will go up."

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