Federal agencies spent $136 billion dollars in 2001 acquiring services ranging from clerical support and consulting services to information technology services, such as network support, and management and operations of government facilities, such as national laboratories. To achieve greater cost savings and better outcomes with this spending, Congress and the administration have encouraged greater use of performance-based contracting. Under this approach, the contracting agency specifies the outcome or result it desires and leaves it to the contractor to decide how best to achieve the desired outcome. Most of the 25 contracts GAO reviewed exhibited at least one or more performance-based attributes, but there was a range in the degree to which they exhibited these attributes.
Recommendations for Executive Action
|Office of Federal Procurement Policy||1. As part of the office's effort to reexamine performance-based contracting, the Administrator of the Office of Management and Budget's Office of Federal Procurement Policy (OFPP) should clarify existing guidance to ensure that performance-based contracting is appropriately used, particularly when acquiring more unique and complex services that require government oversight.|
|Office of Federal Procurement Policy||2. Because of the growing importance of performance-based contracting to the executive branch, the Administrator of OFPP should work with agencies to periodically evaluation how well agencies understand performance-based contracting, how they are applying it to services that are widely available in the commercial sector as well as more unique and complex services, and what results they are achieving--both in terms of outcomes and cost savings.|