Performance-Based Service Acquisitions (PBSA), formerly called Performance-Based Service Contracting (PBSC), is mandated by the entire federal government. PBSA means an acquisition structured around the results to be achieved as opposed to the manner by which the work is to be performed. Orders placed under ITES-2S are not required to be performance-based under all circumstances. However, policy promulgated by the FY 2001 Defense Authorization Act (PL 106-398, section 821), FAR 37.102, and FAR 16.505(a), establishes PBSA as the referred method for acquiring services. In addition, for Defense agencies, DFARS 237.170-2 requires higher-level approval for any acquisition of services that is not performance-based.

Accordingly, it is expected that most ITES-2S orders will be performance-based. A Performance Work Statement (PWS) or Statement of Objectives (SOO) should be prepared to accompany the Task Order Request (TOR) to the ITES-2S Contractors. See below for further information on PBSA and specific details and resources for the preparation of a PWS or SOO.

Performance-based service acquisition has many benefits. They include:

• Increased likelihood of meeting mission needs
• Focus on intended results, not process
• Better value and enhanced performance
• Less performance risk
• No detailed specification or process description needed
• Contractor flexibility in proposing solution
• Better competition: not just contractors, but solutions
• Contractor buy-in and shared interests
• Shared incentives permit innovation and cost effectiveness
• Less likelihood of a successful protest
• Surveillance: less frequent, more meaningful
• Results documented for Government Performance and Results Act reporting, as by-product of acquisition
• Variety of solutions from which to choose

(Source: http://acquisition.gov/comp/seven_steps/index.html)