Best Practices for Collecting and Using Current and Past Performance Information

The Federal Government is in a continuous process to reinvent itself, with a goal of becoming a government that works better and costs less.  The Government is the largest acquisition organization in the world with expenditures of about  $200 Billion a year for commercial goods and services.  This is one third of the Federal discretionary budget of about $600 Billion.  How well the Government’s acquisition teams administer in-process contracts and discuss with contractors their current performance, determines to a great extent how well agencies can achieve their missions and provide value to the taxpayers.  By increasing attention to contractor performance on in-process contracts and ensuring past performance data is readily available for source selection teams, agencies are reaping two benefits:  

(1) better current performance because of the active dialog between the contractor and the government; and (2) better ability to select high quality contractors for new contracts, because contractors know the assessments will be used in future award decisions.

Statutory and Regulatory Basis

The 1994 Federal Acquisition Streamlining Act (FASA), signaled a "sea change" in Federal acquisition.  FASA was signed into law by the President on October 13, 1994 (P.L. 103-355).  In FASA, Congress acknowledged that it is appropriate and relevant for the Government to consider a contractor's past performance in evaluating whether that contractor should receive future work.  Section 1091 of FASA states: Past contract performance of an offeror is one of the relevant factors that a contracting official of an executive agency should consider in awarding a contract. It is appropriate for a contracting official to consider past contract performance of an offeror as an indicator of the likelihood that the offeror will successfully perform a contract to be awarded by that official.

Working With Contractors

In meetings with OFPP, contractors of all sizes and many industry associations have emphasized the power of past performance as a tool for motivating contractors to make their best efforts.  However, they have raised concerns that many assessments are not being done, or are being done inconsistently.  Contractors seek an above-board, timely evaluation process.  They want frank discussions early in the process so they have an opportunity to improve performance, if necessary, before final assessments are given.  They want to be advised of any negative comments being entered into official reports and given ample opportunity for a rebuttal.  They fear inflated assessments as much as poor assessments because inflated assessments help poor contractors and hurt good contractors

Communication is critical  

Commercial companies have come to recognize that two-way communication is vital to a productive relationship with their suppliers.  On-going open discussion with the contractor about the Government's requirements and how the contractor can best meet them, can greatly improve the quality of deliverables under Government contracts.  The better the contractor performance evaluation, the more competitive the contractor will be for future work. 

Recording Current Contract Performance Information

The key to the long-term success of this important initiative is for each agency to assess and maintain a record of contractors’ performance on procurement actions exceeding $100,000. Each agency is encouraged to adopt a current performance information system that will systematically record contractor performance in the following areas:

Quality of performance - as defined in contract standards;

Cost performance - how close to cost estimates;

Schedule performance - timeliness of completion of interim and final milestones.

Business relations - history of professional behavior and overall business-like concern for the interests of the customer, including timely completion of all administrative requirements and customer satisfaction.