Making Performance-Based Contracting (and Relationships) Work: Learn How the Federal Government's Transportation Safety Administration Has Used Non-Traditional Procurement Methods to Establish an Information Technology (IT) Infrastructure with Nothing Less Than the Safety and Freedom of the Traveling Public at Stake

By Schambach, Pat; Duke, Elaine | The Public Manager, Winter 2003 | Go to article overview

Making Performance-Based Contracting (and Relationships) Work: Learn How the Federal Government's Transportation Safety Administration Has Used Non-Traditional Procurement Methods to Establish an Information Technology (IT) Infrastructure with Nothing Less Than the Safety and Freedom of the Traveling Public at Stake


Schambach, Pat, Duke, Elaine, The Public Manager


The Transportation Safety Administration's (TSA) IT management services (ITMS) contract is a performance-based managed services contract. Think: seat management raised to the 10th order of magnitude. Unique at the time of award, ITMS is now a model for how small organizations with huge missions can operate. A small cadre of agency personnel oversees the delivery of products such as computer and telecommunications equipment in the form of services that include a full array of support. That support includes everything from capital planning and business operations to seat management, systems engineering and integration, applications integration, hosting, security, quality assurance, and program management.

It was important to us that this contract be truly performance-based because performance-based acquisition (PBA) answers the call to support the mission. True PBA focuses on mission results, not compliance. We need results from this contract; nothing less. It will not work for us to have a list of requirements with which a contractor must comply, only to find that the requirements do not meet the mission.

Why Did We Not Take a Traditional Approach?

Working with the IT contracting officer, Megan Dake, we shunned the traditional approach to service contracting because we found that our usual approach often had failed us. For one thing, we both have had prior experience spending months and sometimes years developing a detailed specification or "performance work statement." We called them "performance" work statements, and that is just what they were: statements telling the contractor how to perform. In doing so, we were trying to solve our own problems instead of letting the contractors do what we were paying them to do. Further, by binding the contractors to our work statements, we were tying them to our solutions, which were not always the best ones.

We then spent a great deal of effort forcing contractors to comply with our specifications, or modifying the contracts for every change that was needed along the way. Long ago, we may have had adequate numbers of staff to do that--traditional contract administrators and contracting officers' technical representatives. It was their job to enforce the terms of the contract, whether or not the terms of the contract still provided a good solution. We had typical contract administration processes in place, too. Our staffs dutifully checked reports and invoices, and occasionally resorted to cure notices and terminations. We were putting the emphasis in the wrong place--on contract compliance instead of results. Of course, when that happened we had a failure on our hands.

TSA needed something better. Our fledgling agency and over 400 airports were depending on us for their technology infrastructure. Nothing less than the safety and freedom of the traveling public was at stake. We needed an industry partner, not just a contractor. We needed a company as committed to achieving our mission as we are. One that, if we were lying awake at night worrying about transportation security problems, would be awake working on solutions to those problems.

Statement of Objectives

For an infant agency with no technology infrastructure and practically no IT or acquisition staff, a managed services contract using a Statement of Objectives (SOO) approach offered the best hope. For a chief information officer (CIO) with few staff--and an acquisition office with one IT contracting officer and an acting director--it seemed the only way to proceed. We followed the process "Seven Steps to Performance-Based

Acquisition" and used procurement streamlining techniques to get to contract award in as short a time as possible. The seven steps are: (1) establish the team; (2) decide what problem needs solving; (3) examine public and private sector solutions; (4) decide how to measure and manage performance; (5) develop a statement of objectives; (6) select the right contractor; and (7) manage performance. …

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Making Performance-Based Contracting (and Relationships) Work: Learn How the Federal Government's Transportation Safety Administration Has Used Non-Traditional Procurement Methods to Establish an Information Technology (IT) Infrastructure with Nothing Less Than the Safety and Freedom of the Traveling Public at Stake
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