Performance-Based Contracting Audit Planned

The Washington State Auditor's Office is seeking the services of a firm to help them audit the use of performance based contracting among state agencies.

The Auditor's Office defines performance based contracts as having the following characteristics:

• Identifying expected deliverables
• Identifying performance measures or outcomes
• Making payment contingent on successful delivery of these performance measures or outcomes.

In November 2010, Washington Governor Chris Gregoire requested assistance from the Auditor's Office in evaluating performance contract practices by state agencies.

The audit will seek to answer the following questions:

1. Contract Management:  How are agencies actively managing performance-based contracts?  For example, if a vendor is not performing, what corrective actions are being taken?  Are contractors/vendors being held accountable?  Given limited resources, what options are available to improve management if needed?
2. Performance Measures:  Do current performance-based contracts include appropriate and effective performance measures for assessing contractor performance?  If not, why not?
3. Incentives:  Do current performance-based contracts provide incentives for excellent performance and/or consequences for inadequate performance?  If not, why not?
4. Leading Practices:  What are leading practices around performance-based contracting?  How could we apply these practices to Washington State?

Using the results of the audit, the Auditor's Office plans to write a summary report to the Governor by June 1, 2011.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

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