At a July National Contract Management Association conference in Los Angeles, the answer was a resounding yes from at least two prominent government procurement officials. Kenneth Oscar, new deputy administrator of the Office of Management and Budget s Office of Federal Procurement Policy, and Thomas Luedtke, NASA s associate administrator for procurement, both said they have come up with new performance-based ways to create practical incentives for government and industry alike. Award-term contracting is the most innovative approach in use today, Luedtke said at the conference. Oscar also cited this technique as one of the key methods identified by a team he had set up in the spring of 1999, when he was deputy assistant secretary of the Army for procurement, to study incentives. As is the case with so many of today s acquisition reforms, award-term contracting is derived from commercial best business practices.
Private firms seek long-term business relations with the vendors they choose.
That relationship depends on the contractors ability to perform. Award-term contracting provides a similar approach in government contracting. If a contractor s performance is continually rated excellent by its evaluators, the firm stands to add as much as five years to an existing five-year contract, all without competition. Here s how it works. A five-year core contract period is established, but the terms could be scaled back to a minimum of three and a half years or expanded to a maximum of 10.