How Contracts Exhibited Performance Attributes Varied

Most of the 25 contracts we reviewed exhibited at least one of the performance-based attributes, but there was a wide range in the extent to which they did. These contracts   described what outcomes the government was looking for and left it up to the contractor to decide how best to achieve these outcomes,   set measurable performance standards,   subjected the contractor to a quality assurance plan, and  included performance penalties and incentives when appropriate. As a result, they missed out on an opportunity to achieve better outcomes with their spending for services. However, implementation was not fully pursued until the past few years when Congress and the Office of Management and Budget (OMB) encouraged the use of performance-based service contracting methods.
What GAO Found

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.