What is a performance based service contract?
What is a performance based service contract?
Performance-based service contracting (PBSC) emphasizes that all aspects of 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 that preclude an objective assessment of contractor performance.
How do you structure a performance based contract?
When a contract is drafted the following steps should be completed:
- Build a team of subject matter experts.
- Explain the problem that needs a solution.
- Review existing private-sector and public-sector solutions.
- Write a performance work statement (PWS) or a statement of objectives (SOO).
What is a PWS in Government contracting?
When a contract is awarded, the PWS is legally binding between the contractor and the U.S. Government. Definition: “A Performance Work Statement (PWS) is a Statement of Work for performance based-acquisitions that describes the required results in clear, specific, and objective terms with measurable outcomes.”
What is necessary for a performance based contract to be useful?
PERFORMANCE WORK STATEMENTS. The key elements of a PBSC PWS are: a statement of the required services in terms of output; a measurable performance standard for the output; and an AQL or allowable error rate.
What are the advantages of performance based contract?
Improved customer loyalty. Performance based contracts incentivise the supplier to maximise performance, effectiveness and efficiency of his service. This circumstance ensures an environment for continuous improvements, which may also benefit the customer.
What are the 5 basic types of contracts?
Other contract types include incentive contracts, time-and-materials, labor-hour contracts, indefinite-delivery contracts, and letter contracts.