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Performance-based contracting arrangements and partnerships should also be considered when selecting a contract type. Performance-based contracting is focused on the results instead of the process. The supplier provides the Postal Service with specific benefits, such as cost reductions or revenue generation, and in return the supplier shares in the value created. Performance-based contracting creates an incentive for the supplier to control its costs. Partnering allows the Postal Service and supplier to control costs, resolve differences through negotiations, and transform into a professional relationship built on trust and cooperation. The partnership will develop throughout the process of the contract. This will lead to payment or other issues being resolved economically and efficiently. Additional information can be found in Section 2-16, Consider Performance-Based Contracting Arrangements.
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