PurposeExisting studies on project performance improvement mainly investigate project management (PM) execution processes. Limited publications investigate the project management office's (PMO) proficiency in facilitating proper PM practice. This paper identifies the key performance indicators (KPI) of PMO operations and develops a KPI-based performance management system (KPMS) for revitalising PMO performance for an engineering-service contractor (ESC).Design/methodology/approachA four-phase study was initiated at an ESC in Trinidad and Tobago (T&T). Phase-1 established historical project performance and PMO challenges via documentary analysis. Empirical data from the PMO staff and management was acquired at Phase-2 to determine PMO process value-drivers and strategic roles. Phase-3 comprised the development of a modified PMO process and the KPMS, whereas Phase-4 evaluated the efficacy of the PMO process and the KPMS framework in a trial period.FindingsThe ESC's existing PMO process lacked significant value-drivers of its PM practice. The company also overlooked strategic PMO roles. Trial implementation of the modified PMO process achieved improved project performance, which stakeholders attributed to the value-driven processes and guidance provided by the KPMS. The KPMS, when used in tandem with Earned Value Management (EVM) index score review revealed core performance aspects that could facilitate continuous improvement of the PMO process at the ESC.Practical implicationsFindings provide an adequate basis for policy creation regarding PMO performance evaluation and guidance for companies contemplating a similar endeavour. A viable model for PMO performance management and improvement is proffered. The findings and the model would provide a platform for subsequent research in the areas of PMO development and business process improvement.Originality/valueThis is the first study conducted to obtain management and practitioners' inputs on developing a PMO performance management framework in a project-based contractor organisation in T&T. Various PMO challenges and implications of improvements specific to engineering-service contractors and similar organisations were determined.