Implementing Performance-Based Services Acquisition (PBSA)

Perspectives from an Air Logistics Center and a Product Center

by John A. Ausink, Laura H. Baldwin, Sarah B. Hunter, Chad Shirley

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The U.S. Air Force is implementing performance-based practices in its service contracts to improve quality and reduce costs. Earlier Project AIR FORCE research examined implementation in installation support services. The project has now examined purchased services that support weapon system development and sustainment (‘systems’ services). Under performance-based services acquisition (PBSA), buyers should (1) describe what service is desired (not how to do it), (2) use measurable performance standards and quality assurance plans, (3) specify procedures for reductions in fee or price when services do not meet contract requirements, and (4) include performance incentives where appropriate. The authors conducted interviews at an Air Logistics Center and a Product Center to learn whether and how service contracts included these performance-based practices. Many at the two Centers felt that it is difficult for systems service contracts to satisfy all four of the PBSA criteria. To satisfy the requirement to use “measurable performance standards,” for example, some personnel believe that the desired result of a service must be known in advance and objective data must be collected frequently to measure performance against that result. This cannot be easily done for many systems services such as engineering support and advisory and assistance services. Despite this difficulty, however, both Centers use a performance-based approach (applying the other three criteria) to purchase many services, and many personnel felt that they can determine and convey whether the contractor met their needs. The authors conclude that many of the approaches used by the Centers satisfy the intent of the criteria.

The research reported here was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE.

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