Performance Based Operations Contracting (PBOC) can be applied to highway and other types of transportation operations with considerable beneficial effect. PBOC is increasingly being used around the world in applications involving Intelligent Transportation Systems, maintenance contracting with operational elements, and other applications. PBOC combines performance specifications with penalties and incentives to achieve desired outcomes rather than telling the contractor how to perform the work via method specifications and excessive use of technical specifications. The focus of a performance based contract is (or should be) on achieving desirable outcomes linked to key agency strategic goals and program objectives. The crux of a performance based contract is to develop practical, cost-effective performance measures tied to the contract objectives that can be used to measure how well the contractor achieves desired outcomes. This guide provides step-by-step guidance regarding how to develop a performance based contract for transportation operations. It discusses establishing the acquisition team, conducting market research to determine feasible solutions and performance measures, developing a contracting strategy, preparing a performance work statement (or Statement of Objectives), establishing penalties and incentives, selecting a contractor, selecting a quality assurance evaluator, monitoring contractor performance, and closing out the contract. Performance based contracting is not a new concept and its use in contracting is growing rapidly. Indeed the goal of the Procurement Executives Council of the federal government is to increase performance based service contracting to at least 50% of all eligible contracts by 2005.

  • Corporate Authors:

    Booz Allen Hamilton

    8283 Greensboro Drive
    McLean, VA  United States  22102

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Authors:
    • Hyman, W A
  • Publication Date: 2003-4-15


  • English

Media Info

  • Features: Appendices; Figures; Tables;
  • Pagination: 101 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00989182
  • Record Type: Publication
  • Report/Paper Numbers: FHWA-OP-03-079,, Final Report
  • Contract Numbers: DTFH61-01-C-00183
  • Files: TRIS, USDOT
  • Created Date: Apr 11 2005 12:00AM