"Past Performance" in Government Contracting

“Past Performance” In Government Contracting:
Key Concepts, Advanced Strategies for Success
And New Developments
William A. Shook, Esq.
G. Matthew Koehl, Esq.
 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
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
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)
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
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
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
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
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
 DOD CPARS Policy Guide:
 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
Central Repository of Contractor PARs
 Past Performance Information Retrieval System (PPIRS):
 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)
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
 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
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!
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
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
 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
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.
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
 Agency must conduct communications with offerors when
PPI is the determining factor keeping offeror from
competitive range. FAR 15.306(b)(1)(i)
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
Common Problems and Disputes
 Failure to Consider the Correct PPI
 OSI Collection Services, Inc.; CB Accounts, Inc., B286597, 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).
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
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
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.
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
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
Contractor Strategies
 Monitor sources of information on your PPI
 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
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
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!
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
New Developments
 H.R. 3030 – Database of contractor performance
 GSA to report recommendations for a centralized and
comprehensive federal contracting and assistance
 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
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