Jump to content

When was FAR 37.6 added to the FAR?


govt2310

Recommended Posts

Does anyone know when FAR 37.6 Performance-Based Contracting was added to the FAR?  I found something online that said "1998," but it is not clear if that is part of the FAC number or if that is the year it actually got added.  Does anyone know the FAC number?  And does anyone have the link to OFPP Policy Letter 91-2, which talked about Performance-Based Contracting?  I'm sorry I keep using the phrase PBC, I realize that is the old name, and that now the current term is Performance-Based Acquisition.

https://www.law.cornell.edu/cfr/text/48/37.601

Link to comment
Share on other sites

I think I found the Federal Register document where the FAR Council added FAR 37.6 to the FAR, see 61 FR 40284, August 1, 1996, Federal Register Volume 61, Number 149, Proposed Rule, "Service Contracting," https://www.federalregister.gov/documents/1996/08/01/96-19486/federal-acquisition-regulation-service-contracting.  It does not cite a statute as authority or the reason why they did this.  They only cite OFPP Policy Letter 91-2, Service Contracting. 

 

 

 

Link to comment
Share on other sites

In July 2003, The White House OMB OFPP Interagency Task Force on Performance-Based Service Acquisition issued a report called "Performance-Based Service Acquisition: Contracting for the Future," https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwihr8nE7L_9AhV9EVkFHRT3A4EQFnoECAoQAQ&url=https%3A%2F%2Fobamawhitehouse.archives.gov%2Fomb%2Fprocurement_guide_pbsc%2F&usg=AOvVaw1PLhv9wA-QiU2IqYA8lwnA

This document recommended updating the FAR to add definitions for "Statement of Objectives (SOO)" and so forth.

I searched but cannot find the exact FAC and Federal Register Proposed Rule (and Final Rule) that implemented this.  Does anyone have the link?

Link to comment
Share on other sites

In January 2006, the FAR Council published in the Federal Register a Final Rule updating the FAR to add a definition for Statement of Objectives (SOO) to FAR 2.101, and it made other changes that implement the Task Force's recommendations, 71 FR 211 , January 3, 2006, https://www.federalregister.gov/documents/2006/01/03/05-24548/federal-acquisition-regulation-change-to-performance-based-acquisition.

Link to comment
Share on other sites

Here is my try.

 

The OFPP Policy Letter 92-1 added performance-based contracting as a method for consideration.

 

The “1997 Reissue” added FAR 37.6 to the FAR as my look prior to the reissue 37.6 was not in the FAR.

 

Federal Acquisition Regulation (FAR) Federal Acquisition Circular (FAC) 97-01 is what added the preference for Performance Based.  As noted in the Federal Register the preference was a result of Section 821 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398)

 

Link to comment
Share on other sites

29 minutes ago, C Culham said:

The “1997 Reissue” added FAR 37.6 to the FAR as my look prior to the reissue 37.6 was not in the FAR.

No, it didn't.

The FAR Part 15 Rewrite (not "Reissue"), FAC 92-02, 62 FR 51224, September 30, 1997, came after the addition of FAR Subpart 37.6. See my post above. The reason you didn't see it before was that the effective date of FAC 97-01 was in October.

Link to comment
Share on other sites

Just a detail:

FAC 97-25 was an interim rule, 66 FR 22082-01, May 2, 2001. The rule was finalized a year later by FAC 2001-07, 67 FR 21533-01, April 30, 2002, with some minor changes—

Quote

The coverage contained in the final rule is the same as that in the interim rule except that the final rule amends paragraph (b)(4) of FAR 7.105 to clarify that contracting officers must provide rationale if a performance-based contract will not be used or if a performance-based contract for services is contemplated on other than a firm-fixed price basis (see 37.102(a) and 16.505(a)(3)).

 

 
Link to comment
Share on other sites

Don Mansfield and I recently had a conversation about innovation in acquisition and I pointed out that we know very little about whether innovations, such as incentive contracts and performance-based acquisition, work as advertised. Basically, what happens in our business is that when an innovation has been described and adopted it is almost immediately declared to be a success and accepted as such by noncritical thinkers. Rarely do we collect information that would enable us to reach an informed conclusion in that regard. We design, but we don't test.

A lot of innovations seem to make sense until you try to implement them. Perhaps the classic example is incentive contracts. It has been well-documented by the GAO and private researchers that they simply do not work as advertised. In fact, there is little proof that they work at all. We don't know if they fail because they are based on false premises or because we don't know how to use them  properly. Yet people will adamantly insist that they work without a scintilla of evidence and in ignorance of the research and critical analysis.

I think performance-based acquisition is a classic example of how a policy gets ballyhooed, gets adopted, finds its way into statute and regulation, and then flops. It is fascinating to trace its history from early experiments in the field of education contracting (under Donald Rumsfeld, no less), to the adoption of the concept by the Air Force in its 1979 regulation AFR 400-28—which was cancelled, as were its successors—to the adoption by OFPP, which converted AFR 400-28 to OFPP Pamphlet No. 4 (available at Wifcon), and thence to its present sad state.

Sad to say, but in our business we spend a lot of time and effort trying to square a circle and turn iron into gold using magic wands.

Link to comment
Share on other sites

54 minutes ago, Vern Edwards said:

Don Mansfield and I recently had a conversation about innovation in acquisition and I pointed out that we know very little about whether innovations, such as incentive contracts and performance-based acquisition, word as advertised. Basically, what happens in our business is that when an innovation has been described and adopted it is almost immediately declared to be a success and accepted as such by noncritical thinkers. Rarely do we collect information that would enable us to reach an informed conclusion in that regard. We design, but we don't test.

I took a innovation in contracting class recently. there were about 30 of us. There were more procurement attorneys then 1102's. one of the opening questions was why we wanted to take this class. almost all of the attorneys said they wanted to know where the innovation training was coming from because they had been seeing more garbage (my term) then they where historically used to. 

Link to comment
Share on other sites

Just now, dsmith101abn said:

I took a innovation in contracting class recently. there were about 30 of us. There were more procurement attorneys then 1102's. one of the opening questions was why we wanted to take this class. almost all of the attorneys said they wanted to know where the innovation training was coming from because they had been seeing more garbage (my term) then they where historically used to. 

The innovation craze is not new. I wrote an article about it in April 2016. A lot of people don't know that performance-based contracting goes back to the late 1970s. One of the earliest notions of the performance work statement can be traced to 1979.

A  lot of what passes for innovation is what I called licensed-scheming in an attempt to get around some law, regulation, or policy mandate. A lot of it is nothing more than attempt to offset incompetence in the conduct of some acquisition process. In fact, a lot of our problems are due not to some rule but to poor rule implementation process design. Oral presentations can save a lot of time and money, but not if the agency decides to make a dog and and pony show production out of them, which is what people did at first.

I have long said that most contracting officers lack a simplicity gene.

Link to comment
Share on other sites

1 hour ago, Vern Edwards said:

Don Mansfield and I recently had a conversation about innovation in acquisition and I pointed out that we know very little about whether innovations, such as incentive contracts and performance-based acquisition, word as advertised. Basically, what happens in our business is that when an innovation has been described and adopted it is almost immediately declared to be a success and accepted as such by noncritical thinkers. Rarely do we collect information that would enable us to reach an informed conclusion in that regard. We design, but we don't test.

A lot of innovations seem to make sense until you try to implement them. Perhaps the classic example is incentive contracts. It has been well-documented by the GAO and private researchers that they simply do not work as advertised. In fact, there is little proof that they work at all. We don't know if they fail because they are based on false premises or because we don't know how to use them  properly. Yet people will adamantly insist that they work without a scintilla of evidence and in ignorance of the research and critical analysis.

 I’ve thought a lot about how innovations in acquisition can be tested.  From all practical perspectives, they can’t.  To do so requires a solid, well defined, accurate, and repeatable baseline.  Even if someone picked a very simple contract and recompeted it using some innovative approach, it won’t be meaningful.  Even if the comparison results were positive, how do you identify the reasons?  The baseline contractor could be a poor performer, the newly selected contractor could be a stellar performer, the new contractor and government want the test to be successful so everyone tried harder, etc.  Plus contract work rarely stays unchanged over time so the test might compare apples with oranges.   To conduct a well controlled test requires very comprehensive analysis and extensive data collection and lots of preparation.  Nobody in government program offices want to make that kind of commitment and what’s in it for the participants? 
 

Proof will remain based on anecdotal stories. 

Link to comment
Share on other sites

1 hour ago, formerfed said:

Proof will remain based on anecdotal stories. 

Not if innovation is done properly.

I presume that if an office is thinking of trying an innovation, something new, either in solicitation or contract terms or in contracting process, then it must be seeking a departure from something it experienced before. It wants something better. So the first  step in innovating is deciding what experiential change is being sought. The office must decide what it would like to be different, in what way, and to what extent. X1 is what we experienced before and want something better, and X2 is what we hope to achieve by means of this innovation. When the innovation is put into play the office should document their new experience and the outcome. That should be enough to tell them whether the innovation "worked" in that instance and whether they should use it again, reject it, or refine it in some way and try again.

So, for example, let's say a CO preparing to conduct a source selection wants to try the advisory multi-step process described in FAR 15.202. Well, that entails some extra work, so as the CO's boss my first question would be: Why? Does the CO want to do that just for the experience of having done it, or does she have some process payoff in mind? I would tell her to write down what she hopes to achieve. I would want to know why she thinks advisory multi-step would enable her to achieve it. I would tell her to brief me on her plan and expectations. Assuming she can do that, and make a case, then I would say to go ahead and give it a try, but to document what happens.

Afterward, I would ask her to brief the staff on what happened, on the costs and benefits, on how the result compared to her expectations, and to explain why it happened that way. Should we do it again? If so, should we change anything?

Based on her briefing and the staff's critical analysis, we would try it again, try it again with changes, or drop it.

Whether or not the innovation was successful, if the CO did a good job in conducting the experiment I would see to it that she receives official recognition from higher authority.

Link to comment
Share on other sites

Vern,

Lots of things an expert can find wrong with that advisory multi-step example.

A big claim for benefits of the multi-step process is improved efficiency through early elimination of non viable offerors and fewer detailed proposals to evaluate.  The experts would say a valid test requires solid data on the number of proposals anticipated without the multi-step process and resources utilized to evaluate versus what actually occurred with the process.  That requires a lot of upfront planning, identifying potential variables, formulating assumptions, and then accurately capturing results.  With contracts, that’s an extremely difficult task considering all the potential things that can impact awards and numerous variations between different contract experiences.  That’s a big difference from just asking the CO to write down their expectations.

I’m just saying proving whether an innovation works or not in this field is very, very challenging.  Anytime someone touts benefits received from an innovative concepts, another person comes along and finds holes in the logic.  There seems to be no easy answers to claims around PBA, oral presentations, product or technical demonstrations, discovery or due diligence, and on and on.  Anecdotal evidence seems to be the norm.  That’s not saying these don’t work; it’s just absolute proof is hard to find.  

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
×
×
  • Create New...