Report
Defining Needs and Managing Performance of Installation Support Contracts: Perspectives from the Commercial Sector
Jan 1, 2004
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Traditionally, the U.S. Air Force has written service contracts with detailed specifications about how the work should be performed. That practice is changing. The Air Force is implementing performance-based practices within its service contracts with the expectation that they will improve service quality and reduce costs. A buyer-provider relationship based on performance-based practices differs greatly from the Air Force's traditional, arms-length directive relationships with many service providers who were chosen because they were the lowest bidder. Performance-based contracts describe a desired outcome rather than how to perform the work, evaluate performance based on measurable standards, specify procedures for reducing fees or prices when services do not meet contract requirements, and may include positive incentives for good performance. The Air Force goal is that at least half of all service acquisitions should be performance-based by 2005.
Previous research by RAND Project AIR FORCE (PAF) supports the implementation of performance-based practices in contracts related to Air Force weapons systems and installation activities; recent contracts incorporate some of these practices. A new PAF study suggests that as the Air Force extends its use of performance-based practices to contracts for food and facilities services, acquisition planners should consider principles derived from best practices used in the commercial sector.
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