One constant goal for the Postal Service and the supplier is to reduce the TCO. Performance measures may be included in any contract, but are most effective when used with a performance-based contract. Performance-based contracts are discussed in detail in Section 2-18, Select Contract Type and Period of Performance.
Performance measures are used to motivate the supplier to improve in areas important enough to be rated, but not to the detriment of overall performance. Performance improvements such as quality of work, productivity, and cost-efficiency must be embodied in the terms of the contract; they can be at a number of levels, from price or turnaround time improvements to encouraging innovation of service delivery. Improvements should aim for alignment of objectives, so that the client and supplier are working toward the same goals and both derive benefits when they are realized.
