Can a contract be Performance-based despite being labor hour ?

[phynarphis]

I am trying to figure out whether I can fit within the defination of a performance-based acquisition when I have identified the results or outcomes I want, how I would measure contractors performance and what my acceptable level of performance is, but I can only estimate the volumne of work using labor hours.

The FAR defines "Performance-based acquisition (PBA)” as "an acquisition structured around the results to be achieved as opposed to the manner by which the work is to be performed." It then defines “Performance Work Statement (PWS)” as "a statement of work for performance-based acquisitions that describes the required results in clear, specific and objective terms with measurable outcomes." FAR 37.601 ( B ) states: "Performance-based contracts for services shall include—

(1) A performance work statement (PWS);

(2) Measurable performance standards (i.e., in terms of quality, timeliness, quantity, etc.) and the method of assessing contractor performance against performance standards; and

(3) Performance incentives where appropriate. When used, the performance incentives shall correspond to the performance standards set forth in the contract."

In describing the term PWS in FAR 37.602( B ), it provides "Agencies shall, to the maximum extent practicable

(1) Describe the work in terms of the required results rather than either “how” the work is to be accomplished or the number of hours to be provided (see 11.002(a)(2) and 11.101);

(2) Enable assessment of work performance against measurable performance standards;

(3) Rely on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.

Thus, does the reference in FAR 37.602( B ) to "the number of hours to be provided" eliminate my effort to otherwise describe the work in terms of results and identifying how to measure and ALP and thus qualify as performance-based.

[bob7947]

Is this para your concern?

FAR 37.602( B ), it provides "Agencies shall, to the maximum extent practicable

(1) Describe the work in terms of the required results rather than either “how” the work is to be accomplished or the number of hours to be provided (see 11.002(a)(2) and 11.101);

[phynarphis]

Yes, it is the reference to using the number of hours as part of how you describe the work. Fundmentally, my client's have a hard time suggesting what the volume of work is for the objectives we identify and resort to how many FTEs they think they need.

[C Culham]

Yours sounds like the classic struggle. Some would suggest taking some effort to attempt to lean your customers away from their line of thinking to move towards a FFP contract based on PBA ideals. Some find this website, endorsed by OFPP as a best practice tool, helpful in taking on the challenge - https://www.acquisition.gov/sevensteps/home.html Especially take a look at the "vetted samples and examples" under the "Library" tab.

Beyond the above suggestion I can only offer a quote from the FAQ part of the website ......

Q11 Why aren't time-and-material, level-of-effort, or term type contracts excluded from the eligible service dollars? Although I realize it is always better to define requirements to the maximum extent practicable, there are times when the Government only requires best effort for a certain period of time.

A11 The Government needs to be careful whenever a requirement is not defined. However, in a time-and-material, level-of-effort, or term type contract, you can still incorporate aspects of PBA to measure performance, and in fact, should be doing this for proper administration. Traditional T&M and Labor-Hour contracts are generally structured around staff hours, not results.

[Guest Vern Edwards]

Reality check: Performance-based contracting is one of the most broadly defined and amorphous concepts in acquisition. Almost everything has been designated "performance based" by one office or another at one time or another. I would not worry too much about this in your case. If it will pass muster with your superiors, then call it performance based.

[C Culham]

While the ideals of performance based acquisition can be debated and continually are the fact remains that there is strong regulatory and policy direction that the structure of performance based acquisition shall be in embraced. FAR Part 37, especially 37.102 and Subpart 37.6, along with OFPP Policy Letter 93-1 provide this direction. From my view it would not appropriate to go about calling something performance based if it is not but rather call it what it is and if that means using a “traditional” labor service contract then do it if its use can be determined appropriate (FAR 16.602).

[Guest Vern Edwards]

Carl:

Please define or describe performance-based in your own words, without quoting or paraphrasing regulation or guidance. Tell us what you think it is. Tell us how we could tell the difference between a performance-based work statement and an "ordinary" work statement. In your own words, please. Give us good, specific criteria.

[Guest Vern Edwards]

Never mind. Forget it. It's pointless.

[C Culham]

Vern - I do not understand the calling out of my post. I never once stated that PBA was perfect and readily admitted in my first post that it is a "struggle" and a "challenge" and admitted in my second post that the ideal of PBA is still debated. So yes asking me to define PBA for your labbasting enjoyment is pointless.

My second post was intended to suggest, with regualtion and policy reference and nothing more, why it might not be wise to simply call a contract PBA if your superior says it is okay to do so. Having no idea if the post was made by a newbie, or otherwise, who has never even attempted to read the references I provided or the many, many others that relate to PBA, I was providing a reality check of my own.

Oh and just for the record and because I am gutsy, my illustrative definition would be - My marriage vows.

As always I wait with anticipation for your follow on post!

[Guest Vern Edwards]

I think I said it was pointless and to forget it. I can see that was not enough.

Thanks for your response. I did not mean to "call you out." I just wanted to know how you defined it, because if we cannot define it we cannot say what is or is not it, whatever it is. But on reflection I think it does not matter.

Please consider my inquiry withdrawn. I have nothing more to say in this thread to you or anyone else. Please forgive me for any offense -- real, imagined, or anticipated.

[phynarphis]

Vern and All,

Thank you for your input. At the end of the day, I am trying to convince the Contracting Officer we can justifiably categorize as PBA. We have briefed senior leadership that certain actions we are working will be PBA.

I think Vern hits the real point, it is very unclear what PBA is. Most responders recognize what the textbook PBA example is, the one with results and FFP to achieve those results. But, we also have to define the non-text book example of where does a requirement move from traditional to PBA. It is fuzzy and most likely intentionally so.

I plan to look at the GAO report that analyzed FPDS-NG data to see if what was being coded as PBA was actually PBA. If GAO allowed non-FFP contracts to be considered PBA, then I think I will have all the evidence I need to convince my CO.

Thanks again.