Overview
FAR 37.602 establishes the requirements for creating a Performance Work Statement (PWS) and a Statement of Objectives (SOO), emphasizing result-oriented requirements over prescriptive instructions. This section mandates that agencies focus on measurable outcomes and performance standards to foster innovation and cost-effectiveness in service contracting.
Key Rules
- Source of PWS: A PWS can be authored directly by the government or developed by an offeror in response to a government-issued Statement of Objectives (SOO).
- Outcome-Based Description: Agencies must describe work in terms of "what" the required results are, rather than "how" the work is performed or specifying the number of labor hours required.
- Measurable Standards: The PWS must allow for the assessment of work against specific, measurable performance standards.
- Incentives: Agencies should use measurable standards and financial incentives to encourage contractors to find innovative and cost-effective solutions.
- SOO vs. PWS: While the SOO is used by offerors to develop a PWS, the SOO itself does not become a part of the final contract.
- SOO Content Requirements: At a minimum, an SOO must include the purpose, scope/mission, period and place of performance, background, performance objectives, and any operating constraints.
Practical Implications
- Contractors are given the flexibility to apply private-sector best practices and innovative methodologies because the government is prohibited from dictating specific processes or "how-to" steps.
- Success in this environment shifts the focus from simple compliance with instructions to the actual achievement of measurable performance metrics, which directly impacts a contractor's profitability via financial incentives.