Seven Steps
to performance-based acquisition
    
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step 5

Decide How to Measure and Manage Performance
Select only a few meaningful measures
on which to judge success.

Whether the measures are developed by the proposing contractor or by the integrated project team, it is important to limit the measures to those that are truly important and directly tied to the program objectives. The measures should be selected with some consideration of cost. For example, the team will want to determine that the cost of measurement does not exceed the value of the information... and that more expensive means of measurement are used for only the most risky and mission-critical requirements.

Review Serving the American Public:  Best Practices in Performance Measurement



The American Productivity and Quality Center website states that performance measures come in many types, including economic and financial measures such as return on investment, and other quantitative and qualitative measures. "Organizations are investing energy in developing measures that cover everything from capital adequacy and inventory turns to public image, innovation, customer value, learning, competency, error rate, cost of quality, customer contact, perfect orders, training hours, and re-engineering results." Each measure should relate directly to the objectives of the acquisition.

View the INS approach to performance measurement in its IT Partnership

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