Cleaner Production Tools -- Performance Based Contracting
[ Description | Links ]
Performance based contracting (PBC) is a strategy that has been mainly used by the U.S. Military, sometimes for Pollution Prevention but also for many other purposes. It is also used in the energy industry.
Under PBC, a contractor takes responsibility for managing a specific part of of an undertaking (for example, cleaning up radioactive contamination at a site) and takes the risk for managing that part, and gains financial rewards for making it more efficient. Performance-based contracting methods are intended to ensure that required performance quality levels are achieved and that total payment is related to the degree that services performed meet contract standards.
In the energy industry, performance contracting is a way of financing eco-efficient technology. Used this way, PBC allows the third party contractor to be paid out of savings achieved by the clean technology it was responsible for implementing.
Performance Based Contracting Links
ŠNDRC 2000-2006