MEMORANDUM
DATE: October 1, 1999
ACTION: Performance-Based Service Contracting Program
{original signed by}
The Deputy Secretary
Heads of Operating Administrations
Assistant Secretary for Administration
Director, Transportation Administrative Service Center
The Office of Management and Budget memorandum dated August 5, 1999,
has expressed concerns with the Department of Transportation's (DOT)
performance to date on the Director's Performance-Based Service
Contracting (PBSC) initiative. PBSC is proving to be an acquisition methodology which both saves money and enhances mission attainment.
Over the past few years, I have asked you to give the PBSC program
your special attention and support, including appointment of a PBSC
Advocate. Our success to date has been limited.
I am designating PBSC as a ONE-DOT priority and will include it in the
Fiscal Year (FY) 2000 performance agreements. To be successful, PBSC must be driven and embraced by the program and budget communities, as
the procurement community cannot drive it alone. I am asking each of you to examine your organizations and identify senior managers from
the program and budget offices to participate in this initiative.
Furthermore, I am asking you to implement the following actions within
your organizations no later than January 01, 2000:
- Advise all your senior managers in the program, budget and procurement organizations of your support of the PBSC initiative and obtain their commitment to increase PBSC usage;
- Develop a plan to train a significant number of employees from your program, budget and procurement organizations on PBSC in FY 2000;
- If not already at that level, raise the level of your PBSC Advocate to Flag Officer or Senior Executive Service, with no authority to redelegate approvals to a lower level;
- Instruct your PBSC Advocate to develop a quality monitoring system to ensure that all existing and future contracts identified as PBSC include the key PBSC elements as expressed in the Federal Acquisition
Regulation, Subpart 37.6, Performance-Based Contracting;
- Ensure that your PBSC Advocate promotes PBSC by establishing a review process for all requirements for services, regardless of funding
source, estimated to exceed $500K;
- Ensure that your PBSC Advocate reports no less than quarterly on the progress of PBSC initiatives within your organization; and
- Encourage your PBSC Advocate to have discussions with senior managers to expand the use of PBSC within their programs.
In addition to the steps identified above, the Office of the Secretary
will improve the resources available to you. As a result, I have asked the Senior Procurement Executive to accomplish the following:
- Prepare a package for PBSC Advocates which provides the resources and tools to help them carry out their responsibilities;
- Provide a means to measure PBSC activity through the DOT Contract
Information System (FAA must separately provide a measure to track
PBSC activity);
- Establish a database which identifies PBSC activity throughout DOT;
- Share DOT PBSC activity with all operating administrations (OA);
- Identify potential sources for PBSC training opportunities; and
- Provide Quality Monitoring Guidelines on an internet site for PBSC.
To accomplish these goals, commitment throughout DOT is required; therefore, I am holding each of you responsible for obtaining the necessary commitment from the appropriate functional areas within your
organizations. PBSC will be a subject of our monthly performance
agreement reviews.
Since this is a ONE-DOT priority, I have directed the Assistant Secretary for Administration to identify a PBSC Advocate from one of the OAs as a champion for this initiative throughout DOT.
Thank you for your support and commitment towards the PBSC initiative.