Immigration and Customs looking at performance-based software development

Officials at the U.S. Immigration and Customs Enforcement (ICE) directorate are thinking of switching their outsourced software development activities to a new type of contract. Instead of the usual cost-reimbursement contract to buy software development services, they hope to use performance-based contracts.

The agency’s Office of the Chief Information Officer posted a request for information today on the Federal Business Opportunities Web site looking for ideas from vendors on how that transition might be accomplished in upcoming projects to modernize the agency’s information technology systems.

ICE has traditionally used cost-reimbursement contracts for software development because of a “lack of precise specifications and difficulties in estimating costs with accuracy,” the notice states. Also, the agency said the cost-plus-fixed-fee contract type is commonly used in software development contracts.

However, to respond to the Office of Management and Budget’s recent  memo that instructed agencies to maximize competition and use performance-based measures and incentives when possible, ICE is looking at performance-based contracting for software development.

In performance contracts, the work is described in terms of results required rather than the methods of performance, with objective and measurable performance standards, quality assurance assessments, and incentives based on the quality, timeliness or cost of the work performed.

ICE also is examining the possibility of other types of contracts for software development, including firm fixed price, cost plus incentive fee and cost plus award fee vehicles, the notice said.

Vendors are invited to submit comments on the benefits and risks of the contracting approaches in the IT and software development areas, and what performance measures and incentives might be used.

Comments are due by Dec. 21.