Government Computer News (GCN) carried a story on the difficulties experienced with, "Performance-Based Contracting". The process was made part of the Federal Acquisition Regulation (FAR) in an attempt to pre-establish at contract award those discrete outcomes that determine if and when a contractor will be paid.
Interestingly enough, the article splits the blame for the difficulties right down the middle, stating the government typically has problems defining what it wants as an end product or outcome and looks to contractors to define it for them. More than willing to do so, the contactors detail specific end products or outcomes, set schedule milestones and submit competitive proposals.
The winner is selected based on what the government thinks it needs at the time to fullfill its requirement and a contract is negotiated. Once underway, the government decides it wants something else (usually a management-by-government committee phenomina with a contractor growing his product or service by offering lots of options).
The resulting change of contract scope invalidates the original price and schedule, so a whole new round of proposals and negotiations must occur with the winner while the losers watch something totally different evolve than that for which they competed. The clock keeps ticking and the winner keeps getting his montlhy bill paid based on incurred cost or progress payments.
The link to the GCN ariticle is below and is yet another indication of how government keeps getting bigger by incompetancy:
Latch onto the 1980's HBO Movie, "The Pentagon Wars", a humorous but remarkably true story of the design and development of one of the costliest weapons systems ever to grace the Pentagon Budget, the "Bradley Fighting Vehicle". The movie starred Kelsey Grammer as the Pentagon General who led the government establishment sponsoring the vehicle program. The profusion of design and performance specification changes and other difficulties which plagued the program for years was hilariously but accurately portrayed in the film. It was nominated for an Emmy.
Further details on The Defense Industrial Complex see the following posting: