The Internal Revenue Service lacks the expertise in its program offices to establish a strategy for performance-based acquisition. IRS has used performance-based contracting, but its use is below federal goals, the Treasury Inspector General for Tax Administration reported today.
The IRS did not use a performance-based strategy because the service didn't have enough time to complete procurements, it lacked a vigorous planning phase, and program managers were unable to define requirements, TIGTA said in a report.
Performance-based acquisition increases the quality of performance, innovation and competition, and results in better value for agencies. It shifts much of the risk from the government to industry and lets agencies focus their monitoring efforts on the desired outcomes rather than on how the work is done, the report said.
TIGTA reviewed 20 acquisitions that could have been candidates for performance-based contracting. Only one contracting officer technical representative who discussed these acquisitions with TIGTA had any formal training in performance-based acquisitions, the report said.
“This lack of knowledge, education and experience within the business units is one of the primary barriers for not using PBA,” said Michael Phillips, deputy inspector general for audit.
Because program offices, not procurement offices, have primary responsibility for defining requirements, TIGTA said program office participation is essential to ensuring the use of PBA as a cost-effective business practice.
The IRS program office management should plan to use performance-based acquisition with cross-organizational teams, the report said. Program personnel who have the authority to select the appropriate acquisition strategy for the procurement and those who write contract requirements should receive training in performance-based methods. TIGTA said.
“Senior IRS executives can support these efforts by working to overcome resistance, organizing resources and building commitment to new ways of doing business,” Phillips said in the report.
The service will implement the recommendations and officials signed a memorandum that encourages the program office's management to emphasize the importance of using a performance-based approach, James Falcone, chief of agencywide shared services, said in a response letter. The memo also provides guidance to establish the methodology.
The service's Office of Procurement Policy has revised its policy and procedures to include a requirement for an acquisition planning meeting with the director of procurement for any contract actions other than a firm, fixed-price contract that exceeds $10 million.
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