“Past Performance” In Government Contracting: Key Concepts, Advanced Strategies for Success And New Developments

William A. Shook, Esq. G. Matthew Koehl, Esq.

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Introduction Statutory Requirement to Evaluate Past Performance

Past Performance Evaluation vs. “Responsibility”

Performance Assessment Reports/PPIRS

Categories of PPI Subject to Evaluation

Common PPI Problems And Disputes

Strategies for Gaining Competitive Advantage from Past Performance

Limits on Advertising Favorable Ratings

New Developments

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Agencies Must Consider Past Performance Federal Acquisition Streamlining Act of 1994 (FASA)

FASA Designed to eliminate “red tape” and to permit the Government to behave more like the private sector

Emulate private sector practice of awarding to companies with strong performance records

FASA requires use of past performance as an evaluation factor in competitively negotiated awards

Office of Federal Procurement Policy (OFPP) must establish policies that encourage use of PPI in award decisions

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Past Performance – Regulations and Guidance FAC 90-21 (May 1995) revised FAR Subpart 42.15 to reflect FASA’s approach to PPI (Attachment A)

OFPP revised Best Practices Guide For Collecting and Using Past Performance Information (Attachment B) Sample forms and questionnaire Suggests 25% weight for past performance where evaluation factors are assigned a numeric weight value

Draft revision issued for comments, still under review

DoD Guide to Collection and Use of Past Performance Information (Attachment C)

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Past Performance vs. Responsibility

Responsibility: Yes/No assessment as to whether the contractor has requisite financial resources, business integrity, etc. to perform the solicited contract. FAR 9.1

PPI Evaluation: One of several comparative evaluation factors used to select best value contractor. FAR Part 15

PPI evaluations apply only to negotiated procurements (FAR Part 15), and not sealed bids (FAR Part 14) where award goes to the lowest responsive, responsible bidder Agency must define how past performance will be rated “unacceptable” in low price/technically acceptable RFPs

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Past Performance vs. Responsibility Distinction vs. Responsibility especially important for Small Business Concerns

Negative responsibility determinations are referred to SBA for Certificate of Competency (COC) process

No right to COC process when Small Business Concern receives a poor rating based on past performance

Goode Construction, Inc., B-288655, 2001 WL 1505922 (Oct. 19, 2001). GAO denies “responsibility” protest where award was based on a “comparative evaluation” of the relevant past performance of the awardee and protester

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Performance Assessment Reports (PARs) Performance Assessment Report (PAR) required for

all contracts > simplified acquisition threshold ( $100k). FAR 42.1502(a) DoD class deviation to FAR threshold ($5 million) Lower thresholds for certain DoD contract types

PAR at contract completion

Interim PAR for contracts > 1 year

PAR “Report Card” format can vary agency

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Performance Assessment Reports (PARs)

PARs good only for 3 years from the date of contract completion. FAR 42.1503(e)

Agencies treat PARs as protected “source selection information” under FAR 3.104 Exempt from FOIA

Contractor opportunity to review draft PAR

Must submit comments with 30 days Review above contracting officer in case of disagreement

Final PAR within agency’s discretion

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Contractor Performance Assessment Reporting System (CPARS) Web-enabled application that collects individual

automated contractor performance assessment ratings (CPARs)

DoD-wide but not for classified contracts

Contractors comment on the CPAR and indicate concurrence or non-concurrence

DOD CPARS Policy Guide: http://www.cpars.csd.disa.mil/cparsfiles/pdfs/DoD%20CPARS%20Guide%20June%202007.pdf

February 2008 DoD IG Report – CPARS is ineffective because DoD CPAR data is often late, incomplete or not submitted at all as required for DoD contracts > $5 million

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Central Repository of Contractor PARs

Past Performance Information Retrieval System (PPIRS): http://www.ppirs.gov/

Central warehouse for performance assessment reports received from agency performance information collection systems Populated by CPARS and other agency collection systems

Query capability to retrieve report card information

Access limited to agency employees working on source selections

Contractors can only view their own PARs (access via ccr.gov)

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Categories of PPI Subject to Evaluation Information Provided by the Contractor

Offeror may submit past performance information on Federal, S/L/E or commercial sector contracts. FAR 15.305(a)(2)(ii)

PPI from “Other Sources”

Agency may seek PPI from “any other source.” FAR 15.305(a)(2)(ii)

Includes formal PARs in PPIRS

Also includes less formal information known personally to agency employees or solicited by the agency, e.g., subcontractors and customers

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Categories of PPI Subject to Evaluation Subcontractor Past Performance Information

Agency may consider subcontractor PPI where the subcontractor will perform a substantial portion of the contract. FAR 15.305(a)(2)(iii)

Absent a prohibition in the solicitation, GAO will reject challenges to the agency’s consideration of subcontractor PPI. Rolf Jensen & Associates, Inc., B-289475.2, B289475.3, 2002 WL 1782710 (Jul. 2002)

Practical Tip: Do your homework on significant subcontractors’ PPI – it could affect your award!

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Common Problems and Disputes

“Grade Inflation” General concern that grading has gotten too easy, with evaluators avoiding conflict by awarding high marks

As a practical matter, anything less than Blue/Excellent could suggest less than good performance.

Given the trend of “Grade Inflation,” even more important to challenge and rebut negative or even average past performance ratings

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Common Problems and Disputes “Stale” Past Performance Information

Contracting Agency should not consider PPI that is more than 3 years old, measured from the date of contract completion. FAR 42.1503(c)

“Fresher” PPI is favored over less current PPI. FAR 15.305(a)(2)

But agency has no duty to update PPI submitted by offeror; this burden falls on offeror. IGIT, Inc., B-275299.2, 97-2 CPD ¶ 7

Practical Tip: Don’t submit contract references that may become stale before evaluation/award date. Always submit more current references unless they are less relevant or contain less stellar performance ratings

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Common Problems and Disputes “Rogue” Past Performance Information

Agency considers untrue, conflicting or unsupported PPI E.g., former employee or Government employee with a personal vendetta against contractor

Agency should discount or at least provide the opportunity to comment on such information FAR 15.306(d)(3)

Often won’t learn of rogue PPI until evaluation is complete and award decision made. Only remedy at that point is to protest

Protest may be worth filing simply to correct record, even if you don’t expect eventually to obtain the award

Practical Tip: PPI is an important topic for post award debriefing.

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Common Problems and Disputes Failure to Provide Notice of Adverse PPI

Adverse PPI is anything that results in less than an excellent score during proposal evaluation.

Agency must address adverse PPI during discussions with offerors in the competitive range if the contractor has not previously had an opportunity to comment. FAR 15.306(d)(3)

Agency must conduct communications with offerors when PPI is the determining factor keeping offeror from competitive range. FAR 15.306(b)(1)(i)

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Common Problems and Disputes

Failure to Document Informal Sources of PPI

When utilizing less formal sources, agency must document its evaluation sufficiently to show that the evaluation was reasonable and consistent with the solicitation, or risk successful protest

Gray Personnel Services, Inc., B-285002, B-285002.2, 2000 CPD ¶ 112. GAO rejects protest against consideration without verification of management quality assessments and individual employee reviews, where RFP did not restrict consideration of such information

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Common Problems and Disputes

Failure to Consider the Correct PPI

OSI Collection Services, Inc.; CB Accounts, Inc., B-286597, et al., 2001 C.P.D. ¶ 103 (Oct. 2001). No requirement for the agency to contact all submitted references, or contact the same number of references for each offeror

However, agency may not ignore relevant PPI. GTS Duratek, Inc., B-280511.2, 98-2 C.P.D. ¶ 130 (GAO sustains protest where agency failed to consider PPI personally known to evaluators on relevant contract).

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Common Problems and Disputes Failure to Follow Evaluation Criteria.

Past Performance must generally be a factor in all negotiated procurements > $100k. FAR 15.304(c)(3)(ii)

Agency must disclose all evaluation factors and specify their importance relative to price. FAR 15.304(c)(2)

Dismas Charities, Inc. 2003 C.P.D. ¶ 125 (June 2003) (sustaining protest for failure to follow stated past performance evaluation criteria)

Practical Tip: Carefully review agency past performance evaluation where RFP references “same or similar” projects, magnitude, scope, etc. Consideration of PPI from contracts that are not “same or similar” is improper

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Common Problems and Disputes Improper Use of PPI

Nova Group, Inc., B-282947, 99-2 CPD ¶ 56 (protest sustained b/c agency downgraded protester’s past performance based on history of filing claims, w/o any showing that it had abused claims process)

OFPP Memorandum April 1, 2002: no downgrading for filing protests/claims or better scores for refraining from filing protests/claims. Attachment D.

Allegations of improper punishment, etc., are difficult to prove given (1) broad agency discretion and (2) limited discovery in bid protests

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Contractor Strategies Perform Well

Obvious point, but make sure you adequately staff and train program teams to earn excellent ratings

Tie program teams’ individual performance ratings to successful contract performance ratings

Communicate with Agency Regular formal (PMRs, etc.) and informal dialogue with CO and Government program team.

Request early warnings of possible performance problems – fix little problems before they become big problems.

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Contractor Strategies

Don’t Fight About Everything Pick your battles carefully, rather than contesting every issue and appearing to be a difficult business partner

Reserve your battles for issues that truly matter

Treat Government Concerns Seriously Respond promptly and thoroughly Make sure company executives are informed and, where necessary, able to engage directly with the agency to resolve problems

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Contractor Strategies Shape RFP Requirements

Informal dialogue, comments to draft solicitation, Q & A, or even agency-level or GAO protest

Define past performance evaluation factors to your benefit, e.g., size and relevancy to RFP

Battle is often won or lost prior to bid – once bids are submitted, too late to challenge evaluation criteria

Provide PPI Tailored to the RFP’s evaluation factors “One size fits” all approach often won’t work well. Detailed summary of all current and recently-completed contracts: contract type, project description, agency, value

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Contractor Strategies Monitor sources of information on your PPI

PPIRS Errors not infrequent, many are easily corrected. Ask your customers what they’re hearing about your PPI

Participate in post-award debriefings Excellent source of information about how your PPI was evaluated and how well your B&P group responded

Keep detailed file on debriefings Worth your time even if you don’t intend to protest

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Contractor Strategies Examine subcontractor/teammate PPI

May have dramatic impact on your rating Do this early in bid preparation process -- finding out that it’s negative at your de-briefing only helps on the next bid!

Review and comment on PARs for existing contracts Formal review and comment process Seek higher level review Informal dialogue with Contracting Agency Prepare strong response to negative findings with as much detail as space will permit

Be reasonable and dispassionate

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Limits on Marketing/Advertising Favorable PPI PARs generally represent Source Selection Information under FAR 3.104 Not for release except to Government and the contractor CPAR policy provides that the contractor must ensure that it is not released to persons or entities outside the contractor’s control

CPAR policy prohibits the contractor’s use of or reference to CPAR data for advertising or promotional material

Practical Tip: Don’t laminate favorable CPARs for easy distribution at trade shows!

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Marketing/Advertising Favorable PPI

What can you do?

Make customers generally aware that you achieved strong past performance ratings on specific projects

Refer the customer to the specific source where they can access agency PARs

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New Developments

H.R. 3030 – Database of contractor performance problems GSA to report recommendations for a centralized and comprehensive federal contracting and assistance database

Avoid AEY, Inc. scenarios Multiple T/D contracts in 2006 Later awarded $300 million contract to supply Afghan Army

T/D and indicted on 71 counts of fraud No PAR in PPIRS because T/D contracts below $5 million  

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New Developments

Proposed FAR Rule: Require PARs for all FSS and ID/IQ orders in excess of SAT ($100,000)

Some agencies already perform PARs on larger FSS and ID/IQ orders

PARs must identify evaluator

FAR Case 2006-022, Attachment E