Training gives IRS an edge on performance-based contracting

Treasury Acquisition Institute Web site

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"Performance basis"

The Internal Revenue Service is doing more performance-based contracting than it was two years ago, and IRS officials say it is because the agency's acquisition workforce has received good training.

In a partnership with ESI International and other firms, the agency runs its own procurement training program through the Treasury Acquisition Institute. Other agencies — within and outside the Treasury Department — also take advantage of the program, said Nick Nayak, the IRS' chief learning officer.

IRS officials say the program has sharpened employees' performance-based contracting skills. In fiscal 2003, only 9 percent of IRS contracts for services worth more than $25,000 were performance-based, said Patty Hoover, a procurement analyst in the agency's Office of Procurement Policy. In 2004, that figure rose to 26 percent.

This year, Hoover expects the IRS to meet the Office of Management and Budget's target to have agencies use performance-based contracting for 40 percent of contracts awarded for services worth more than $25,000.

In performance-based contracts, acquisition officers set standards and specify the results they want. Then they let contractors choose the best way to achieve those goals.

"From an organizational standpoint, performance-based service contracting makes sense," said Dave Grant, director of Treasury's Office of Procurement. "Services contracting has grown exponentially. It is now a majority of what we do."

Hoover said Treasury employees have generally been eager to learn the skills needed for performance-based contracting.

Training in performance-based acquisition is more in demand now, said Chip Mather, senior vice president of Acquisition Solutions, which provides such services to Treasury. In the past, he said, agency officials had less understanding of performance-based contracting and often sent the wrong people to classes.

Developing a performance-based contract is a task for acquisition officers, who define an agency's requirements, Mather said.

"We viewed it as a contracting problem, and we kept sending contracting officers to these classes," he said. By the time a procurement got to a contracting officer, acquisition officials had already defined their requirements the traditional way, he added.

In addition to standard classroom courses, Treasury's institute provides just-in-time training in which employees responsible for a procurement can receive instruction on specific issues they must deal with immediately, Nayak said.

Instructors teach students about more than procurement's technical aspects. They also focus on interactions among agency employees and contractors, because interpersonal skills are essential, he said.

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