Share-in-Savings Initiative Not Yet Tested
Federal agencies spend billions of dollars every year on information technology. Increasingly, agencies are using performance-based contracting methods where they specify desired outcomes and allow contractors to design the best solutions to achieve those outcomes. Share-in-savings contracting is one such method under which a contractor provides funding for a project, and the agency compensates the contractor from any savings derived as a result of contract performance.
The E-Government Act of 2002 authorized the use of share-in-savings contracting for information technology and required implementing regulations by mid-September 2003. The Office of Management and Budget (OMB) reported in December 2004 that no share-in-savings contracts had been awarded. The act’s authority expires in September 2005
A bad entitlement clearly recognized by the bureaucrats employed by the Federal agencies. Actual rationale for the lack of use: the speed of Information technology development, the actual low cost of said development, and the resultant speed of Displacement of technology. Quality of Development depends on the skills of Design labor. Bureaucrats know they could commit their Agency to paying Billions of Dollars for an Information package supplanted before its completion, by some College Student working on his PC; the total Copyrighted and selling for $99 plus Sales tax. Said bureaucrat begins to wonder if their Agency has an office in Guadacanal. Such people will not even bet on Who buys the coffee at Coffee Break. lgl