Close should not count

Close does not count except in horseshoes, hand grenades and service-level agreements.

That's how a recent report from the Defense Department's inspector general may have put it, if the IG had taken some poetic license. It's certainly one message contractors might have taken away after several years of performance-based contracting at DOD.

In the utopian performance-based contracting world, contractors would receive full pay only when they meet the criteria or metrics spelled out in their contracts. But according to the IG's report, DOD has paid billions of dollars on contracts without verifying that contractors fulfilled those service-level agreements.

Out of 67 contracts reviewed, which amounted to $5.5 billion in work, the department failed to provide adequate oversight in 43 cases, according to the IG.

This is not a story of graft and corruption, nor is it an example of inept contracting officers wasting taxpayers' money. Instead, the report is just one more reminder that procurement reform is only as effective as the training that follows it.

Deidre Lee, director of Defense procurement and acquisition policy, acknowledged this in her response to the IG report. Many of the contracts cited in it were negotiated before DOD began training its contracting workforce and providing a user's guide and an online tutorial.

Unfortunately, this is the way procurement reform often works, with members of Congress and top-level administration officials signing off on major changes that take several years to trickle down to the real institutors of change.

Contracting officers, a fairly conservative group, often hesitate to take advantage of reforms until they feel confident with their newfound freedom. DOD, though, has pushed the services to shift to performance-based contracts, just as the Bush administration is now doing with civilian agencies, and is recognizing the opportunity to hold vendors accountable for their performance.

The danger is the same for both. If performance-based contracting becomes the rule before contracting officers know how to manage it, more money will be wasted and an opportunity will be lost.

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