FAR 37.602—Performance work statement.
Plain-English Summary
FAR 37.602 explains how agencies should develop a Performance Work Statement (PWS) and, when appropriate, how a Statement of Objectives (SOO) can be used as the starting point for an offeror-developed PWS. The section is about writing requirements in terms of outcomes and measurable results, rather than prescribing the exact method, staffing level, or hours of effort to be used. It also requires agencies, to the maximum extent practicable, to build performance-based acquisitions around measurable performance standards and financial incentives so contractors have room to propose innovative, cost-effective solutions. In addition, it identifies the minimum content of an SOO—purpose, scope or mission, period and place of performance, background, performance objectives, and operating constraints—and clarifies that the SOO itself does not become part of the contract. Practically, this section matters because it shapes how service requirements are competed, how proposals are evaluated, and how performance will be measured after award. A well-written PWS or SOO can improve competition, encourage innovation, and reduce disputes over whether the contractor met the Government’s actual needs.
Key Rules
PWS May Be Government- or Offeror-Driven
A Performance Work Statement may be prepared directly by the Government or developed by the offeror from a Government-issued Statement of Objectives. This gives agencies flexibility in how they structure performance-based acquisitions.
Describe Results, Not Methods
Agencies must, to the maximum extent practicable, state requirements in terms of the results needed rather than dictating how the work must be done or how many labor hours must be provided. This is the core performance-based contracting principle in this section.
Use Measurable Standards
The work description should allow performance to be assessed against measurable standards. If the requirement cannot be measured, it is difficult to manage performance or determine whether the contractor has met the Government’s expectations.
Encourage Innovation Through Incentives
Agencies should rely on measurable performance standards and financial incentives in a competitive environment to motivate contractors to develop innovative and cost-effective approaches. The rule is intended to support better solutions, not just compliance with a detailed task list.
SOO Is a Starting Point Only
When an SOO is used, offerors use it to develop the PWS, but the SOO itself does not become part of the contract. This means the contract should be based on the resulting PWS and related solicitation terms, not the SOO as a binding contract document.
SOO Must Include Minimum Elements
At a minimum, the SOO must state the purpose, scope or mission, period and place of performance, background, performance objectives or required results, and any operating constraints. These elements provide enough context for offerors to draft a workable PWS.
Responsibilities
Agency
Structure service requirements as performance-based acquisitions whenever practicable, and provide either a Government-written PWS or an SOO that contains the minimum required information. The agency must also ensure the requirement is framed around measurable outcomes and, where appropriate, incentives that support innovation and cost control.
Contracting Officer
Ensure the solicitation and contract documents reflect a proper PWS or SOO-based approach, and verify that the requirement is written in terms of results, measurable standards, and clear operating constraints. The contracting officer must also make sure the SOO is not treated as a contract term unless incorporated separately.
Offeror
If the solicitation uses an SOO, develop the PWS from the Government’s objectives and constraints, proposing a workable approach that meets the required results. The offeror must translate the SOO into a clear statement of performance requirements for its proposal.
Program/Requirements Personnel
Define the mission need, performance objectives, and constraints in a way that supports measurable evaluation and contract administration. They should avoid over-prescribing methods unless necessary for safety, security, or other legitimate constraints.
Contractor
After award, perform to the measurable standards and required outcomes established in the PWS and contract. The contractor is responsible for meeting the results, not merely following a Government-prescribed process, unless the contract specifically requires it.
Practical Implications
This section pushes agencies to buy outcomes, not labor inputs, which can improve flexibility and innovation but requires careful drafting up front.
A common pitfall is writing a PWS that still tells the contractor exactly how to do the work; that can undermine performance-based contracting and limit competition.
Another frequent issue is using vague objectives that cannot be measured, making it hard to evaluate proposals or enforce performance after award.
When an SOO is used, teams must remember that the SOO is only a planning and proposal-development tool unless separately incorporated; the actual contract should rest on the PWS and solicitation terms.
Clear operating constraints matter: if the Government has security, access, schedule, or policy limits, they should be stated in the SOO so offerors can build realistic solutions and prices.
Official Regulatory Text
(a) A Performance work statement (PWS) may be prepared by the Government or result from a Statement of objectives (SOO) prepared by the Government where the offeror proposes the PWS. (b) Agencies shall, to the maximum extent practicable- (1) Describe the work in terms of the required results rather than either "how" the work is to be accomplished or the number of hours to be provided (see 11.002 (a)(2) and 11.101 ); (2) Enable assessment of work performance against measurable performance standards; (3) Rely on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work. (c) Offerors use the SOO to develop the PWS; however, the SOO does not become part of the contract. The SOO shall, at a minimum, include- (1) Purpose; (2) Scope or mission; (3) Period and place of performance; (4) Background; (5) Performance objectives, i.e., required results; and (6) Any operating constraints.