Key Performance Indicator(KPI)
A measurable value used to evaluate how effectively a contractor or program is achieving strategic objectives and contract requirements.
Overview
Key Performance Indicators (KPIs) are quantifiable metrics that organizations use to track progress toward goals. In government contracting, KPIs appear in contract performance plans, earned value management systems, and service-level agreements — defining what "success" looks like and how it will be measured.
Why It Matters in GovCon
Contract performance is increasingly evaluated through KPIs. Proposals must define clear, measurable KPIs that align with the solicitation's evaluation criteria. During contract execution, missed KPIs can trigger deductions, contract termination, or loss of award fees.
Key Details
- Contract-Specific: KPIs are tailored to the work; examples include schedule adherence, quality scores, customer satisfaction, and cost variance.
- Tied to Incentives: Many contracts link fee or award payments to KPI attainment.
- Reporting: Contractors typically report KPIs in monthly or quarterly Contractor Performance Assessment Reports (CPARs).
- Baseline Setting: KPIs should be achievable but challenging; agencies often require historical or benchmarking data to justify targets.
How GovCon Data Can Help
Use GovCon Data's proposal tools to align your KPI proposals with typical agency expectations for similar contracts. The compliance tracking features help you monitor KPI performance across your portfolio.
Related Terms
- Contractor Performance Assessment Reporting System (CPARS)
- Service Level Agreement (SLA)
- Earned Value Management (EVM)
- Past Performance
More Management Terms
A project management methodology that integrates scope, schedule, and cost data to measure project performance and progress objectively.
The government's plan for monitoring and evaluating contractor performance against the standards defined in the contract.
Integrated software systems that manage business processes such as finance, procurement, HR, and project management.
The 12-month period used by the government for budgeting and appropriations; the federal fiscal year runs October 1–September 30.
The PMI-published guide that defines best practices and processes for project management, widely referenced in government contract management.
A contractor-developed plan describing how quality will be assured during contract performance, often required in solicitations.
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