OMB rethinks contracting goals

"Performance Goals and Management Initiatives for the FY 2002 Budget"

The Office of Management and Budget is giving agencies more time to convert government contracts to performance-based pacts, which require agencies to define the results they want instead of how they want to achieve them.

Angela Styles, administrator of OMB's Office of Federal Procurement Policy, said the current goal of requiring at least 20 percent of all service contracts valued over $25,000 to be performance-based in fiscal 2002 is unattainable. That goal was set to increase to 50 percent by fiscal 2005.

"I am concerned that [the goal] was too aggressive, that agencies will get frustrated if they have no hope of meeting it...and we're not at the point of meeting that goal for this year," Styles told Federal Computer Week last week. OMB is still evaluating what the new goals will be.

Hitting the current targets is especially difficult because agencies still disagree on what makes a contract truly performance-based, she said.

Performance-based contracting sounds fairly simple, but it is difficult to put into practice, said Michael Sade, director of acquisition management at the Commerce Department. "Conceptually, people get it," he said. "It's when you go to sit down and try to write [a performance-based statement of work] that the problems begin."

In addition, performance-based contracting requires equal levels of participation from the program office and the contracting office, which is not how agencies typically work, said Gary Krump, vice chairman of the Procurement Executives Council and the Department of Veterans Affairs' deputy assistant secretary for acquisition and materiel management.

In rethinking goals for performance-based contracting in the coming years, OMB officials understand "that it's got to be a realistic goal, or you lose support for it," said Chip Mather, senior vice president of Acquisition Solutions Inc.

Acquisition reform efforts have brought improvements to agency contracting, such as more streamlined procurement processes, but now is the time to figure out how to make sure those changes really help the government improve its performance, Styles said.

"I think we need a few years without reform to figure out where we are," she said.

To help agencies in their quest, OMB is overseeing the development of several tools to make it easier for procurement officials to do their jobs.

This includes launching the Past Performance Information Retrieval System, which will give agencies access to information on federal contractors' performance on past contracts — an important factor when awarding new work.

The Web-based system, which should be available soon, will enable agencies to enter data on their vendors' past performance and retrieve any information collected by other agencies, Styles said.

The Defense Department will host the system because it has the largest database of this vendor information, she said. Data from existing systems at NASA and the National Institutes of Health is being incorporated into the governmentwide system, and the two agencies plan to test the system during the next three months.

Having a single system to access all vendor past-performance information should make it much easier for agencies to choose a vendor that best serves their needs. However, the Office of Federal Procurement Policy still must address whether that data accurately reflects a vendor's performance, Mather said. There are no real guidelines for agencies to use to rank a vendor's performance, and often the data is not within context. "It is a very subjective judgment," he said.

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The road to e-procurement reformThe Office of Federal Procurement Policy's top initiatives include:

* Bringing all agencies onto the Central Contractor Registration system, which collects and stores information on vendors involved in procurements with the government, by October 2002.

* Developing the Federal Acquisition Management Information System (FAMIS), the planned upgrade to the aging Federal Procurement Data System. FAMIS will update the type of information gathered on federal procurements and also facilitate collecting and reporting on that information.

* Finishing the Past Performance Information Retrieval System, a governmentwide Web-based system that will collect and provide instant access to data on vendors' past performance, a key consideration in contract awards.

* Evaluating an online tool that guides users through seven steps to developing a performance-based contract. The General Services Administration's Office of Acquisition Policy released the tool for general use in January.