Preparing a PWS begins with an analytical process, often referred to as a "job analysis." It involves a close examination of the agency's requirements and tends to be a "bottom up" assessment with "re-engineering" potential. This analysis is the basis for establishing performance requirements, developing performance standards, writing the performance work statement, and producing the quality assurance plan. Those responsible for the mission or program are essential to the performance of the job analysis.

A different approach to the analytical process is described in the "Guidebook for Performance-Based Services Acquisition (PBSA) in the Department of Defense." It describes three "analysis-oriented steps" that are "top down" in nature:

• Define the desired outcomes: What must be accomplished to satisfy the requirement?
• Conduct an outcome analysis: What tasks must be accomplished to arrive at the desired outcomes?
• Conduct a performance analysis: When or how will I know that the outcome has been satisfactorily achieved, and how much deviation from the performance standard will I allow the contractor, if any?

The integrated project team should consider the various approaches. Neither the OFPP nor DoD guide is mandatory; both describe an approach to analysis. (There are other guides and other approaches in the "seven steps" library as well.) Regardless of the analytical process adopted, the team's task under step four is to develop certain information:

• A description of the requirement in terms of results or outcomes.
• Measurable performance standards.
• Acceptable quality levels (AQLs).

The AQL establishes the allowable error rate or variation from the standard. OFPP's best-practices guide cites this example: In a requirement for taxi services, the performance standard might be "pickup within five minutes of an agreed upon time." The AQL then might be five percent; i.e., the taxi could be more than five minutes late no more than five percent of the time. Failure to perform within the AQL could result in a contract price reduction or other action.

With regard to performance standards and AQLs, the integrated project team should remember that an option is to permit contractors to propose standards of service, along with appropriate price adjustment or other action. This approach fosters a reliance on standard commercial practices. (Remember that all these points -- performance standards, quality levels, and price -- are negotiable.)