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Performance-based contracting can lead to several downfalls, including a narrow focus on quantifiable outcomes, which may overlook important qualitative aspects of service delivery. Additionally, it may create a risk-averse environment where contractors prioritize meeting specific metrics over innovation or improvement. Furthermore, establishing clear, measurable performance indicators can be challenging, potentially leading to disputes over contract fulfillment and accountability. Lastly, such contracts might foster a short-term mentality, undermining long-term partnerships and sustainability.

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2mo ago

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