Chapter 21 - Performance-Based Contracting and Service Level Agreements

The Virginia Public Procurement Act (VPPA) does not include requirements for the use of performance-based contracting by the Commonwealth’s agencies. Within the technology industry, however, government procurement officials recognize this procurement method as an extremely valuable way to procure information technology goods and services. Performance-based contracting allows government to better control its functional, technical, schedule and budgetary objectives and outcomes for a particular procurement. This is accomplished by the use of performance surveillance and the application of positive and negative incentives to motivate the supplier.