At least 50 percent of all contracts for services issued by the Defense Department will be performance-based by 2005, a Pentagon official said Friday.
Responding to criticism from the Defense Department's inspector general and members of Congress, DoD acquisition reform leader Stan Soloway also pledged to make sure procurement professionals get the training they need to better manage contractors.
"The acquisition and logistics workforce must have a far more complete understanding of commercial business practices," Soloway told the House Government Reform Subcommittee on Government Management, Information and Technology, although he said DoD is much more focused on performance now than it was before federal acquisition reform began in the early 1990s.
The goal of making 50 percent of service contracts performance-based comes several days after an inspector general report found errors in every one of the more than 100 contracting actions reviewed by auditors. Performance-based management of contracts has been a central tenet of the acquisition reform movement, which seeks to stop contracting officers from dictating the methods contractors use to perform their work and instead dictate what end results are expected from vendors.
But developing performance measures for such things as consulting services is much more difficult than, for example, making sure all the tanks that were ordered under a product contract were delivered, Soloway noted.
To help acquisition professionals learn the tricks of the performance-based trade, Soloway said the National Association of Purchasing Management and the National Contract Management Association have created an online course on the subject, at www.napm-ncma.org. In addition, the Pentagon is revamping the course offerings of the Defense Acquisition University to include more training on commercial practices and preparing more guidance on performance-based contracting.
Robert Lieberman, DoD's assistant inspector general for audits, said the Pentagon also needs to better manage its acquisition workforce. Lieberman said downsizing initiatives in the 1990s failed to consider what the workforce should look like in the end, leaving contracting offices without the right mix of skilled professionals to do their work properly.
"It has become an acquisition goal in and of itself to reduce the acquisition workforce," Lieberman said.
Lieberman also questioned the department's progress in reining in the prices DoD pays for spare parts.
"We are still paying excessive prices for spares," Lieberman said.
Soloway responded that since the acquisition reform effort started, the department has begun buying not just spare parts, but also services to manage spare parts inventories. The IG office and Pentagon officials are battling over an unreleased audit report that charges DoD with continuing to waste money on spare parts despite procurement reform.
NEXT STORY: Pay and Benefits Watch: Health and taxes