The concept of performance-based acquisition is simple. Rather than spell out methodologies when making a new acquisition — thereby perpetuating the government's mess of ill-conceived workarounds — agencies instead ask vendors to deliver desired results. 

For example, if your problem is seat management, don't write a request for proposals stipulating a certain number of computers, telephone lines and other equipment. Instead, write a statement of objectives stipulating your communication needs, your reliability requirements and your vision of what seat management should accomplish. By establishing ways of measuring effectiveness, you can profit from the wellspring of state-of-the-art solutions.

In theory, performance-based acquisition is the best innovation in federal contracting in decades.

"If you have a definable outcome, a real definable deliverable, then a performance- based approach is widely accepted to be the most advantageous for both the customer and the vendor," said Stan Soloway, who promoted performance- based acquisition while serving as deputy undersecretary for acquisition reform at the Defense Department. He is now president at the Professional Services Council, an industry association.

But in practice, especially for information technology acquisitions, the results are a mixed bag. For example, in August 2002, the Transportation Security Administration awarded Unisys a performance- based contract meant to provide the agency with a telecommunications and IT infrastructure. However, during a Homeland Security Department audit in 2006, one TSA manager said, "We were given a hodgepodge of $20 Radio Shack sale rack phones" with no hold, transfer or redial buttons.

Unisys defended its performance and said DHS employees and auditors needed more training in performance- based contracting.

Many acquisitions profess to be performance-based, but the congressionally empowered Acquisition Advisory Panel determined that more than half the contracts designated as such in the Federal Procurement Data System-Next Generation were not performance-based.

"The policy is good, the progress toward meeting the policy is in the right direction, but whether or not the government has really achieved that nirvana of true performance-based acquisition is still up in the air," said Ray Bjorklund, senior vice president and chief knowl edge officer at FedSources, a federal IT market research and consulting firm.