Performance-Based Services Acquisition

Abstract

Performance-based Services Acquisition (PBSA) is the government preferred approach to purchasing services (National Defense Authorization, 2000, 821). These contracts specify the government desired end result without stipulating how a task should be performed, granting contractors the flexibility to complete its tasks in the manner the firm deems most appropriate. This method runs counter to traditional government contracts that explicitly state the processes a contractor must complete in order to perform the task in accordance with the contractual agreement (which is input oriented, i.e., compliance oriented, vs. output oriented, i.e., results oriented). If implemented correctly, PBSA will allow the Department of Defense (DoDIG) to attain better performance at lower cost in its services acquisitions than the DoD currently achieves. Since fiscal year (FY) 2000, the DoD has spent an average of 56% of its budget on the acquisition of services, including research and development activities, compared to 39% during the 1980s (U.S. General Services Administration 2009). In FY 2009, the DoD spent $132 billion on services an 84% increase since FY 2000 (U.S. General Services Administration 2009). The federal government has significantly increased its purchase of services over time as (1) its internal capacity to furnish such services has diminished and (2) the DoD's overall reliance upon services has increased markedly.