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Performance Based Contracting for Services: A Survey of NIGP Members

Performance Based Contracting for Services: A Survey of NIGP Members. Dr. Larry L. Martin Professor of Public Affairs University of Central Florida Orlando, Florida. GSA Training Conference and Expo 2010. This session is sponsored by the Federal Acquisition Institute.

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Performance Based Contracting for Services: A Survey of NIGP Members

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  1. Performance Based Contracting for Services: A Survey of NIGP Members Dr. Larry L. Martin Professor of Public Affairs University of Central Florida Orlando, Florida GSA Training Conference and Expo 2010

  2. This session is sponsored by the Federal Acquisition Institute The primary organization providing knowledge and support to the federal civilian acquisition workforce. For more information about FAI, please visit our website at www.fai.gov

  3. Presentation Overview • • Acknowledgments • The Survey • Study Disclaimers • What is PBC for Services? • Study Findings • Major Conclusions

  4. Acknowledgements • Dr. Clifford McCue Professor of Public Administration Florida Atlantic University (Boca Raton, Florida) • Ms. Tina M. Borger, CPPO, • Director of Research & Technical • Resources, NIGP (Herndon, VA) • Mr. MamoonAllaf, Ph.D. Candidate University of Central Florida (Orlando, FL)

  5. Survey • NIGP Membership as of December 1, 2008 • Survey was conducted in 2009 • On-Line Survey Using “Survey Monkey” • Responses: 614

  6. Survey Respondents by Type of Government

  7. Study Disclaimers • Exploratory study • Not a random sample • Low response rate • Not all respondents answered all • questions • Some respondents appeared to have • problems with Survey Monkey

  8. What is Performance-Based Contracting (PBC) for Services? • Federal Approach (Federal Acquisition Regulation) • Governmental Accounting Standards Board (GASB) • SEA Reporting Approach • The Composite Approach • A Mixed Approach • A Different Approach

  9. What is Performance-Based Contracting (PBC) for Services? Federal Approach The purpose of PBC for services is to: “ensure that required performance quality levels are achieved and that total payment is related to the degree that services performed or outcomes achieved meet contract standards.” FAR Sub Part 37.601 - General

  10. What is Performance-Based Contracting (PBC) for Services? GASB SEA Approach • Output (the quantity of service provided) • Quality (the quantity of service provided that meets a quality standard) • Outcome (the results, accomplishments or impacts of service provision) • Any combination (output, quality, outcome)

  11. What is Performance-Based Contracting (PBC) for Services? The Composite Approach “A performance-based contract is one that focuses on the outputs, quality and outcomes of service provision and may tie at least a portion of a contractor’s payment as well as any contract extensions to their accomplishment .” Source: L. L. Martin & J. R. Miller (2006). Contracting for Public Sector Services. Herndon, VA: National Institute of Governmental Purchasing

  12. What is Performance-Based Contracting (PBC) for Services? A Mixed Approach • One that encompasses some or all of the elements • of the previous three approaches. Another Approach • One that is different from all the others.

  13. Study Findings N = 598

  14. Study Findings Use PBC for Services by Region

  15. Study Findings Approaches to PBC for Services

  16. Study Findings N= 175

  17. Study Findings Tie Compensation to Performance by Region

  18. Study Findings Methods Used to Tie Compensation to Performance

  19. Study Findings Methods Used to Tie Compensation to Performance

  20. Study Findings N = 170

  21. Study Findings Use Financial Penalties by Region

  22. Study Findings N = 168

  23. Study Findings Award New Contracts or Contract Extensions Based on Performance by Region

  24. Study Findings Barriers to Increased Use of PBC for Services

  25. Study Findings Barriers to Increased Use of PBC for Services

  26. Study Findings Barriers to Increased Use of PBC for Services

  27. Study Findings N = 444

  28. Study Findings Future Use of PBC by Region

  29. Major Conclusions PBC for services continues to be an underutilized procurement strategy Reasons for Underutilization - Lack of trained procurement staff - Lack of understanding of PBC on the part of key decision makers - Lack of understanding of PBC on the part of contractors

  30. Major Conclusions No general approach to PBC for services - PBC is more of an umbrella term - A mixed approach is most common - The GASB approach is used the least 4 . PBC service contracts frequently tie payments to performance, but not to contract renewals or new contracts

  31. Major Conclusions Milestone contracting is the most common form of linking compensation to performance A majority (60%) of governments use financial penalties 7. The future use of PBC for services is unclear: - More use (50.5%) - About the same (49.3%)

  32. My Contact Information Lawrence (Larry) Martin, MBA, Ph.D. Professor of Public Affairs College of Health & Public Affairs University of Central Florida Orlando, Florida 32816 Phone: 407-823-5731 Email: martinl@mail.ucf.edu

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