R -- NOTICE TO CONTRACTORS THAT PBSC IS A PRIORITY INITIATIVE AT THE DEPARTMENT OF TRANSPORTATION/FEDERAL HIGHWAY ADMINISTRATION (FHWA) This is an informational notice to advise the FHWA contracting community that the FHWA is committed to institutionalizing the use of Performance Based Service Contracting (PBSC) within its acquisition program to the maximum extent practicable. Since 1996, the Department has been participating in an OMB/Office of Federal Procurement Policy (OFPP) initiative to expand the use of PBSC to improve the quality of the services received from contractors and to lower service contract costs. This initiative is a Priority Management Objective for the Office of Management and Budget (OMB), and is a ONEDOT priority at the Department of Transportation (DOT). Contractors interested in business opportunities with the FHWA are advised to familiarize themselves with PBSC principles and practices. BACKGROUND: PBSC is a strategy for sharing programmatic responsibility and accountability for mission execution and success with our contractor workforce, and it is a means of articulating the outcomes expected from our contractors. Use of PBSC has been demonstrated to improve performance, reduce costs, and stimulate competition. It also implements the principles of the Government Performance and Results Act. Essentially, PBSC entails structuring an acquisition around what is to be accomplished rather than how the work is to be done. It involves defining the work in measurable, results-based terms. Both positive and negative incentives are included to stimulate the intended results. Responsibility and accountability is shifted to the contractor, and the Government_s role shifts from intrusive oversight to surveillance. The aim is to free contractors to be innovative and cost-effective in performing services, while holding them accountable for the results. The FHWA relies on the tools of acquisition to fulfil a large portion of its research, development and technology mission. It is therefore imperative that we implement performance-based principles in every step of the acquisition process. FURTHER INFORMATION: Internet users may access pertinent DOT and Office of Federal Procurement Policy documents relating to PBSC at http://www.dot.gov/ost/m60 (scroll down to Topical Areas and select Performance-Based Service Contracting). Information on FHWA business opportunities and annual procurement forecasts are located at: http://osdbuweb.dot.gov/business/ . Users may also review major program areas of the FHWA by going to http://www.fhwa.dot.gov/ . WEB: Visit this URL for the latest information about this, http://www.eps.gov/cgi-bin/WebObjects/EPS?ACode=S&ProjID=Reference-Num ber-XXXXX&LocID=30. E-MAIL: Jodi Condes, jodi.condes@fhwa.dot.gov. Posted 05/05/00 (D-SN452176).

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