Best acquisition method and contract type to procure statement of work

By Fahad Usmani 84 Comments Today we are going to discuss various types of procurement contracts used in project management.

Best acquisition method and contract type to procure statement of work

Appendix 12 - Model Alternative Dispute Resolution Agreement FOREWORD Performance-based service contracting PBSC emphasizes that all aspects of an acquisition be structured around the purpose of the work to be performed as opposed to the manner in which the work is to be performed or broad, imprecise statements of work which preclude an objective assessment of contractor performance.

It is designed to ensure that contractors are given freedom to determine how to meet the Government's performance objectives, that appropriate performance quality levels are achieved, and that payment is made only for services that meet these levels.

This document contains best practices that have proven useful for drafting statements of work, solicitations, and quality assurance plans, and in awarding and administering performance-based service contracts.

This document is neither mandatory regulatory guidance, nor is it intended to serve as a detailed "how to" manual. Such manuals exist already, and citations to them are included at Appendix 1. The purpose of this publication is to assist agencies in developing policies and procedures for implementing PBSC.

The practices contained herein were derived from the experiences of contracting personnel in both government and industry. This information was gathered from interviews, articles, and existing government guidance. We wish to thank the procurement and program officials from the Executive Departments and agencies, and those representatives from the private sector, who provided information on their experiences with PBSC.

We especially appreciate the participation of those agency officials who were willing to be innovative in promoting and implementing this initiative and utilizing PBSC methods by joining in the OFPP PBSC pledge program.

What are Statement of Work (SOW) types?

This is one in a series of publications on best practices developed by OFPP. Appendix 2 contains a copy of the Policy Letter. PBSC emphasizes objective, measurable performance requirements and quality standards in developing statements of work, selecting contractors, determining contract type and incentives, and performing contract administration.

Appendix 3 contains a checklist of key elements of PBSC acquisitions. However, this proven methodology has yet to be fully implemented governmentwide for a variety of reasons, including inexperience in writing performance-based statements of work, cultural inertia, and concerns about more open and interactive communication with industry throughout the acquisition process.

Services covered by the pledge ranged from janitorial and guard services to computer maintenance, and aircraft and technical support.

The governmentwide pledge was further supported by four industry associations representing over 1, companies. They pledged to utilize conflict resolution mechanisms to avoid protests and disputes, identify services convertible to performance-based contracting on a fixed-price basis, work with the government to eliminate obstacles to implementing this initiative, and identify commercial contracting practices adaptable for use by the government.

Moreover, reduced prices and increased customer satisfaction occurred at all price ranges, for both nontechnical and professional and technical services, and whether the contract remained fixed-price or was converted from cost reimbursement to fixed-price.

As evidenced by the results of the pledge, incentives for agencies to implement PBSC are numerous.

Best acquisition method and contract type to procure statement of work

For program personnel, PBSC is a tool that offers improved contractor performance. For budget offices, PBSC has already demonstrated significant cost savings.

Further, personnel who participate on PBSC acquisitions will have the opportunity to attain recognition for their successes. In addition, contractors who do well on initial PBSC efforts will gain an advantage on future solicitations where past performance is a significant evaluation factor.

Additional savings are anticipated through the positive and negative incentives contained in the contract.This statement of work defines those contracts where a performance based statement of work structures all aspects of an acquisition around the purpose of the work to be performed or equipment to be supplied and does not dictate how the work .

(2) Direct acquisitions. Prior to placing an order against another agency's indefinite-delivery vehicle, the requesting agency shall make a determination that use of another agency's contract vehicle is the best procurement approach and shall obtain the concurrence of the requesting agency’s responsible contracting office.

An umbrella-type contract that has demonstrated significant performance problems, cost overruns, or has included an amount of work that is too great or diverse to be effectively managed by either the Government or the contractor, is broken up into multiple contracts.

desires to procure goods and services, a contract is the appropriate method of mutually binding the parties to their promise. The Federal Acquisition Regulations (FAR) governs the use of the. Before agreeing on a contract type other than firm-fixed-price, the contracting officer shall ensure that the contractor's accounting system will permit timely development of all necessary cost data in the form required by the proposed contract type.

This statement of work defines those contracts where a performance based statement of work structures all aspects of an acquisition around the purpose of the work to be performed or equipment to be supplied and does not dictate how the work is to be accomplished.

Types of Procurement Contracts used in Project Management