[Code of Federal Regulations]
[Title 48, Volume 5]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR970.1100-1]

[Page 430-431]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                     CHAPTER 9--DEPARTMENT OF ENERGY
 
Sec. 970.1100-1  Performance-based contracting.

    (a) It is the policy of the Department of Energy to use, to the 
maximum extent practicable, performance-based contracting methods in its 
management and operating contracts. Office of Federal Procurement Policy 
Letter 91-2 provides guidance concerning the development and use of 
performance-based contracting concepts and methodologies that may be 
generally applied to management and operating contracts. Performance-
based contracts: Describe performance requirements in terms of results 
rather than methods of accomplishing the work; use measurable (i.e., 
terms of quality, timeliness, quantity) performance standards and 
objectives and quality assurance surveillance plans; provide performance 
incentives (positive or negative) where appropriate; and specify 
procedures for award or incentive fee reduction when work activities are 
not performed or do not meet contract requirements.
    (b) The use of performance-based statements of work, where feasible, 
is the preferred method for establishing work requirements. Such 
statements of work and other documents used to establish work 
requirements (such as work authorization directives) should describe 
performance requirements and expectations in terms of outcome, results, 
or final work products, as opposed to methods, processes, or design.
    (c) Contract performance requirements and expectations should be 
consistent with the Department's strategic planning goals and 
objectives, as made applicable to the site or facility through 
Departmental programmatic and financial planning processes. Measurable 
performance criteria, objective measures, and where appropriate, 
performance incentives, shall be structured to correspond to the 
performance

[[Page 431]]

requirements established in the statement of work and other documents 
used to establish work requirements.
    (d) Quality assurance surveillance plans shall be developed to 
facilitate the assessment of contractor performance and ensure the 
appropriateness of any award or incentive fee payment. Such plans shall 
be tailored to the contract performance objectives, criteria, and 
measures, and shall, to the maximum extent practicable, focus on the 
level of performance required by the performance objectives rather than 
the methodology used by the contractor to achieve that level of 
performance.