Contract Management: Commercial Use of Share-in-Savings Contracting

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A letter report issued by the General Accounting Office with an abstract that begins "The Congress and federal agencies are increasingly turning to performance-based contracting methods to enhance the delivery of government services. Share-in-Savings (SIS) contracting--in which the contractor assumes more risk by investing upfront costs but also receives a share in any savings generated by its efforts--is one performance-based technique that Congress is trying to promote. We were asked to examine its use by industry in terms of whether there were any key conditions that needed to be in place to make this technique successful. In conducting our review, ... continued below

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United States. General Accounting Office. January 31, 2003.

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A letter report issued by the General Accounting Office with an abstract that begins "The Congress and federal agencies are increasingly turning to performance-based contracting methods to enhance the delivery of government services. Share-in-Savings (SIS) contracting--in which the contractor assumes more risk by investing upfront costs but also receives a share in any savings generated by its efforts--is one performance-based technique that Congress is trying to promote. We were asked to examine its use by industry in terms of whether there were any key conditions that needed to be in place to make this technique successful. In conducting our review, we found that the form of SIS used in a commercial contract varied by contract. Some contracts employed a basic SIS approach, in which a contractor's total compensation was paid entirely through sharing a portion of a client's savings or increased revenues. And some employed a tailored approached in which contractors were paid for at least some portion of their time and materials costs, even if savings or increased revenues were not realized. We performed a detailed analysis on four specific contracts to identify conditions that fostered success."

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Government Accountability Office Reports

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the U.S. Congress investigating how the federal government spends taxpayers' money. Its goal is to increase accountability and improve the performance of the federal government. The Government Accountability Office Reports Collection consists of over 13,000 documents on a variety of topics ranging from fiscal issues to international affairs.

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  • January 31, 2003

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  • June 11, 2014, 5:03 a.m.

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United States. General Accounting Office. Contract Management: Commercial Use of Share-in-Savings Contracting, report, January 31, 2003; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc292845/: accessed October 23, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.