Rescuing a good idea

When it comes to government procurement, one thing unlikely to bring about significant cultural change is a lot of talk.

It's easy enough to tout the benefits of performance-based acquisitions. The basic concept — in which contract payments are tied to specific performance metrics — makes good sense. Such an approach can save agencies from sinking more money into failing programs. It also can inspire ingenuity in contractors, because they are not told how to solve a problem, but only what metrics to hit.

Still, it's no use trying to sell contracting officers on the concept if they do not have the know-how to pull it off. The problems begin with defining metrics. How do you quantifiably gauge the success of a program? And how do you settle on metrics agreeable to both the agency and the contractor? Also, procurement experts say this approach is not appropriate for all acquisitions. How do you know when to use it?

Performance-based contracting represents a new way of doing business for most agencies. Many contracting officers will resist the change if they feel ill prepared, as some clearly do. In such a situation, agencies would be better off steering clear of it altogether. The surest way to stop innovation is to highlight a couple of dismal failures.

That is not to say performance-based contracting is an intrinsically bad idea. But the best idea looks like a bad one if not well-managed.

Procurement officials should make a concerted effort to provide contracting officials with the necessary training. Rather than each agency being left to its own devices, the Bush administration should support the development of a central training program to which agencies can send contracting officers as needed. This program could also serve as a repository for lessons learned and best practices culled by individual agencies.

If the administration wants to make performance-based contracting a priority, it ought to treat it like one.

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