Trends in Performance-Based Services Acquisition

Abstract

Performance-based services acquisition (PBSA) is a proven strategy that reduces costs and improves the quality of service. Rather than specify inputs or service requirements, the Department of Defense (DoD) stipulates a level of performance that the contractor is then obligated to meet, or exceed. When used appropriately, this strategy aligns the objective of the contractor with that of the government customer, and can increase the effectiveness and efficiency of the services provided. Recognizing the benefits, the DoD has sought to increase the appropriate use of PBSA. In 2000, the Under Secretary of Defense for Acquisition and Technology directed that 50 percent of service acquisitions be performance-based (measured in dollars and actions) by the year 2005 (Gansler, 2000). Based on data from the Federal Procurement Data System (FPDS), this report presents trends in PBSA over the last 15 years.