Why a Performance Based Statement Of Work (SOW) ?

• 15 percent reduction in contract price when compared to traditional statements of work where the Government attempts to provide detailed specification telling contractors how they must perform the work.
• 18 percent improvement in customer satisfaction with the contractors' work
• Both of the above are relevant at all price ranges, for both non-technical and professional and technical services
• Improved contractor performance and mission attainment
• Better understanding of objectives
• Greater problem solving creativity
• implements the principles of streamlining and innovation
• personnel who participate on Performance Based Service Contract (PBSC) acquisitions will have the opportunity to attain recognition for their success.
• DoD has mandated that, "at a minimum, 50 percent of service acquisitions, measured in both dollars and actions, are to be performance-based by year 2005." - Under Secretary of Defense, Acquisition, Technology & Logistics (USD(AT&L)), April 5, 2000
• Contractors who do well on initial PBSC efforts will accrue an advantage on future solicitations where past performance is a significant evaluation factor.
• PBSC will help to correct problems commonly associated with services contracts and identified in numerous audits: cost overruns, schedule delays, failure to achieve specified results, and other performance problems.

Conversion to Firm Fixed Price Performance Based Efforts

SeaPort has created a mechanism to provide for conversion from level of effort to performance based service contracts after an initial period of performance. During the initial award determination process, contractors propose firm fixed price options for performance-based efforts in the outyears. These prices are incorporated into the resulting task order. Ninety days before the end of the initial period of performance, the contractor submits a performance based statement of work for the future option periods. Once the Government and the Contractor mutually agree on a performance based statement of work, it replaces the standard SOW. More specific implementation language can be found in the draft contract clause "CONVERSION TO PERFORMANCE BASED SERVICE CONTRACT" and from the SeaPort™ contracting officer.