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Chapter 24 - Requests for Proposals and Competitive Negotiations

24.2 Solution-based RFPs and performance-based contracting

24.2.2 Performance-based contracts

Solution-based RFPs and performance-based contracts go hand in hand. Solution-based RFPs lead to the formation of performance-based contracts and allow suppliers to propose solutions that provide tangible benefits to both the agency and themselves such as:

  • Offering a risk-sharing partnership to achieve the optimum solution.
  • Suggesting clear, tangible and fair metrics to gauge when the supplier has achieved success and trigger the agency’s obligation to pay for performance.
  • Offering procedures for price and/or fee reductions when requirements or performance milestones are not met.