FAR 37.603—Performance standards.
Plain-English Summary
FAR 37.603 explains how performance standards work in service acquisitions that use a Statement of Objectives (SOO). It covers two core topics: first, what performance standards are and how they must be written; and second, how agencies must evaluate performance standards proposed by offerors in response to a SOO. The rule exists to ensure the Government can clearly measure whether the contractor is meeting the contract’s required outcomes, rather than relying on vague or subjective expectations. In practice, this means the standards must be tied to the contract requirements, be measurable, and be organized so the Government can assess performance during contract administration. It also means agencies cannot simply accept contractor-proposed standards at face value; they must review them to confirm they actually satisfy agency needs. For contractors, this section matters because it shapes how they should draft proposed standards and how their proposals will be judged. For contracting officers and program officials, it is a safeguard against poorly defined requirements that are hard to monitor, enforce, or evaluate.
Key Rules
Standards must measure required performance
Performance standards are the benchmark the Government uses to determine whether the contractor has met the contract requirements. They must reflect the level of performance needed to satisfy the Government’s actual needs, not just general industry practice.
Standards must be measurable
The standards must be written so performance can be objectively assessed. Vague, subjective, or purely aspirational statements do not satisfy this requirement because they do not allow a reliable determination of compliance.
Standards must support evaluation
The standards must be structured in a way that permits assessment of contractor performance. This means they should be organized so the Government can observe, measure, and document whether the contractor is meeting the required level of performance.
Agency must evaluate proposed standards
When offerors submit performance standards in response to a SOO, the agency must review them to determine whether they meet agency needs. The agency is responsible for deciding whether the proposed standards are adequate for contract administration and mission support.
Responsibilities
Agency
Define or evaluate performance standards so they align with the Government’s needs, are measurable, and allow performance assessment. When offerors propose standards in response to a SOO, the agency must examine whether those standards are sufficient and acceptable.
Contracting Officer
Ensure the solicitation and resulting contract use performance standards that can be measured and assessed. The contracting officer must support the evaluation process and confirm that proposed standards are suitable for determining contractor performance.
Program/Technical Personnel
Help identify the performance level needed to meet mission requirements and assess whether proposed standards are practical, measurable, and tied to the desired outcomes.
Offerors/Contractors
If proposing performance standards in response to a SOO, draft standards that are clear, measurable, and responsive to agency needs. They should propose standards that can realistically be evaluated and that demonstrate how their approach will meet the Government’s objectives.
Practical Implications
This section pushes both sides toward objective, testable requirements instead of vague service expectations. If a standard cannot be measured, it is difficult to enforce or defend during performance evaluation.
For contractors, poorly written proposed standards can hurt competitiveness because the agency may reject them as not meeting its needs. Proposals should show exactly how performance will be measured and what success looks like.
For contracting officers and evaluators, the main risk is accepting standards that sound good but do not actually support meaningful assessment. That can lead to disputes later over whether the contractor performed adequately.
In day-to-day administration, measurable standards make surveillance, quality assurance, and acceptance decisions much easier. They also reduce ambiguity when documenting performance issues or award-fee/acceptance decisions, if applicable.
A common pitfall is confusing a desired outcome with a measurable standard. The standard must translate the outcome into something the Government can verify, such as timeliness, accuracy, completeness, or other objective criteria.
Official Regulatory Text
(a) Performance standards establish the performance level required by the Government to meet the contract requirements. The standards shall be measurable and structured to permit an assessment of the contractor’s performance. (b) When offerors propose performance standards in response to a SOO, agencies shall evaluate the proposed standards to determine if they meet agency needs.