Outcome-Based Contracting in U.S. Government: From Policy to Performance

This research report examines how outcome-based contracting (OBC) can help federal agencies shift from compliance-focused procurement to measurable mission outcomes. Developed through a partnership between the IBM Center for The Business of Government and the Commerce & Contract Management Institute, the report defines outcome-based contracting, distinguishes it from traditional performance-based contracting, and identifies five critical success factors: requirements, data, trust, governance, and oversight. It also explores AI’s role in contract management, recommends updates to the Federal Acquisition Regulation (FAR), and provides practical guidance for implementing performance-driven acquisition across the federal government.