Performance standards relate to pre-defined levels of excellence or performance specifications. They can relate to technical aspects of goods or the quality of services to be provided. Standards can be set by external bodies such as specific standard setting bodies, accreditation agencies or professional bodies. As a first step, acquiring entities should determine whether relevant standards have been developed by an external, standard setting body. Using existing standards can save both time and money and can reduce the risk of disputation with the contractor.
Two examples of how standards of performance can be expressed are provided in the following case study.
| Case Study: Specifying standards of performance Example 1 All physical hazards are to be marked in accordance with Australian Standard AS 1318-1985, known as the SAA Industrial Safety Colour Code. Example 2 All audit services are to be undertaken in accordance with auditing standards issued by the Auditing and Assurance Standards Board. |
| To be clear about which standards are to be met, acquiring entities should specify in the contract the particular standard(s) that is to be used. A general statement regarding compliance with industry standards should be avoided. The acquiring entity should also specify whether the standards to be applied were set at a particular date or whether it is the standard that is applicable at the date of assessment. |
| In some cases, the assessment of whether standards have been met could be undertaken by an independent third party or an accreditation body. This should be specified in the contract. Such an approach has the advantage that those making the assessment are likely to have the requisite technical knowledge and will bring a level of objectivity and independence to the assessment. In such cases the contract should also specify which party will bear the costs involved. | In some cases, the assessment of whether standards have been met could be undertaken by an independent third party or an accreditation body. |