The General Services Administration is talking with NASA, the National Institutes of Health and the Transportation Department about incorporating incentive-based contracting options into several of the government's largest programs for information technology products and services.
GSA is working with numerous agencies across government to develop pilot projects that incorporate so-called share-in-savings contracting, which reduces the money that customers pay upfront to a contractor by basing payment on the actual savings or increased revenue that results from the use of the technology.
But GSA also wants to add share-in-savings options to such popular governmentwide contracts as NIH's Chief Information Officer Solutions and Partners (CIO-SP), Electronic Computer Store II and ImageWorld, as well as to NASA's Scientific and Engineering Workstation Procurement II and DOT's Information Technology Omnibus Procurement (ITOP) II. GSA also plans to use the contracting method on its own recently awarded $25 billion Millennia and Answer IT services contracts.
These contracts together account for billions of dollars' worth of government IT purchases.
"These are all contracts that a lot of people use and that could benefit from using [share in savings]," said Ken Buck, assistant to the commissioner of GSA's Federal Technology Service.
"I think it's a very good idea, and we could get a lot out of it," said Leamon Lee, associate director for administration at NIH. Sharing the cost of projects could bring in more agency customers for the contract and lead to better solutions for those agencies, he said.
In addition to its existing contracts, NIH also is developing a contract for communications products and services that the agency is hoping could be a share-in-savings pilot contract, Lee said.
DOT has not officially added share in savings to ITOP-II, but several customers already are using a form of share-in-savings contracting in the program, said Dell Berry, the ITOP project manager. "We very much support [the share-in-savings concept] and encourage people to use it for contracting," he said.
For example, the Federal Highway Administration recently awarded a task order on which the vendor will share in the cost and the profit of a project. And the Department of Health and Human Services is developing a task order that also could have vendors sharing the costs and profits of the project, he said.
While GSA wants to formally adopt the use of share in savings - in part to draw together all these types of contracts under a single structure approved by Congress and the Office of Management and Budget - DOT may incorporate share-in-savings-like elements into contract task orders where it makes sense.
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