Panel: OMB should eliminate quota for performance-based acquisition

A federal advisory panel on Wednesday made a preliminary decision to recommend that agencies use performance-based contracts more consistently but avoided suggesting overly prescriptive policies on how such procurements should be carried out.

In a heated discussion carried over from a previous meeting, members of the Services Acquisition Reform Act Advisory Committee concluded debate on 11 recommendations, endorsing 10 of them while tabling the 11th, a proposal to require agencies to develop "acquisition performance plans" to guide their overall contracting strategies.

The panel will continue discussing and taking preliminary votes on recommendations in various areas of acquisition policy until July, when it is slated to decide on a comprehensive set of final recommendations to the Office of Management and Budget.

Among the 10 recommendations endorsed was one to replace a governmentwide quota that now requires 40 percent of contract dollars to be covered under performance-based contracts, instead letting agencies set individual goals. Commentary on the recommendation said that while a quota was helpful in jump-starting use of the strategy, it should be replaced with goals that agencies develop through consultation with OMB.

In a March 17 debate on the measure, some panelists expressed doubt that agencies should be pushed to set aggressive targets for a strategy that has not shown complete success. Others argued that performance-based acquisition often suffers from incomplete, incorrect or unenthusiastic use, in part because of gaps in guidance for using the strategy and in acquisition workforce training on it. They argued that only "stretch" goals would send the message to agencies that performance-based acquisition is a tool worth spending time and effort to master.

Panelists agreed that guidance to eliminate the quota should emphasize that agencies should select stretch goals.

Seven of the provisionally adopted recommendations called for additional guidance from OMB's Office of Federal Procurement Policy on the use of performance-based acquisition, sharing of best practices for using the strategy and analysis of its implementation.

The panel also gave its initial approval to a recommendation to define two distinct categories of performance-based acquisition. Transformational use would describe contracts in which an agency knows the problem to be addressed, but places risk on the vendor to develop a solution that will meet performance goals. Transactional use would describe acquisitions in which the agency knows how the work should be approached, and sets performance metrics tied more closely to the tasks performed.

Panelists said this distinction could enhance OFPP guidance and best practices literature on how agencies might use different strategies.

The panel also approved a recommendation to create a new "contracting officer performance representative" title, though there was considerable debate over how the role should be defined.

Carl DeMaio, president of The Performance Institute, an Arlington, Va.-based think tank and a co-chair of the panel's working group that developed the recommendations, said the role envisioned for the COPR could be filled by someone with the existing contracting officer technical representative title and additional training on performance-based acquisitions. Other panelists felt that performance management and oversight responsibilities essentially made the COPR a new position.