Performance-based gets street cred with feds

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Federal IT managers are taking in stride some fairly dramatic changes in the IT contracting process, according to the results of a GCN telephone survey.

Once wary of performance-based contracting, federal IT managers are warming up to the practice of basing IT contracts on performance and using specific metrics to gauge that performance, as opposed to using more traditional vehicles such as time-and-materials contracts.

Forty-one percent of surveyed managers' agencies are now using performance-based contracts to acquire IT services; 35 percent aren't.

The story was quite different almost two years ago, when GCN conducted a similar survey. Then, only a quarter of respondents said they even understood what performance-based contracting is or knew how to write a performance-based contract.

Respondents in 2003 were daunted by the prospect of switching that contracting method. Fifty-one percent of the 2003 survey respondents said one of the biggest obstacles to migrating to performance-based contracting was changing the ingrained culture of government contracting and getting procurement officers to discard their old ways.

But the actual move to performance-based contracting seems to be going more smoothly than anticipated. In the recent survey, 51 percent of federal IT managers said their agency has had a relatively easy time making the leap from a traditional contracting environment to a performance-based one; 34 percent has had a difficult time making the transition.

And by no means did respondents have an unconditional attachment to time-and-materials contracting. For the most part, surveyed managers'77 percent'approved of the Office of Management and Budget's mandate that agencies justify their use of time-and-materials contracts, which put the burden of cost overruns on the government.

The IT contracting process has also spilled over into other arenas, beyond the obvious procurement and contract of- fices, managers said. Respondents cited the chief financial officer (47 percent) and human resources officer (12 percent) as participants in the IT contracting process, in addition to the more traditional players such as CIO, chief procurement officers, contracting officers, and project and program managers.

And most managers surveyed are thankful that the days of strictly paper-based procurements are at last fading away. Sixty-five percent said the process is easier now, thanks to online procurement tools.

About the Author

Trudy Walsh is a senior writer for GCN.

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