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"Past Performance" In Government Contracting: Key Concepts ...


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"Past Performance" In Government Contracting: Key Concepts ...

  1. 1. “ Past Performance” In Government Contracting: Key Concepts, Advanced Strategies for Success And New Developments William A. Shook, Esq. G. Matthew Koehl, Esq.
  2. 2. Introduction <ul><ul><li>Statutory Requirement to Evaluate Past Performance </li></ul></ul><ul><ul><li>Past Performance Evaluation vs. “Responsibility” </li></ul></ul><ul><ul><li>Performance Assessment Reports/PPIRS </li></ul></ul><ul><ul><li>Categories of PPI Subject to Evaluation </li></ul></ul><ul><ul><li>Common PPI Problems And Disputes </li></ul></ul><ul><ul><li>Strategies for Gaining Competitive Advantage from Past Performance </li></ul></ul><ul><ul><li>Limits on Advertising Favorable Ratings </li></ul></ul><ul><ul><li>New Developments </li></ul></ul>
  3. 3. Agencies Must Consider Past Performance <ul><li>Federal Acquisition Streamlining Act of 1994 (FASA) </li></ul><ul><ul><li>FASA Designed to eliminate “red tape” and to permit the Government to behave more like the private sector </li></ul></ul><ul><ul><li>Emulate private sector practice of awarding to companies with strong performance records </li></ul></ul><ul><ul><ul><li>FASA requires use of past performance as an evaluation factor in competitively negotiated awards </li></ul></ul></ul><ul><ul><ul><li>Office of Federal Procurement Policy (OFPP) must establish policies that encourage use of PPI in award decisions </li></ul></ul></ul>
  4. 4. Past Performance – Regulations and Guidance <ul><li>FAC 90-21 (May 1995) revised FAR Subpart 42.15 to reflect FASA’s approach to PPI (Attachment A) </li></ul><ul><li>OFPP revised Best Practices Guide For Collecting and Using Past Performance Information (Attachment B) </li></ul><ul><ul><li>Sample forms and questionnaire </li></ul></ul><ul><ul><li>Suggests 25% weight for past performance where evaluation factors are assigned a numeric weight value </li></ul></ul><ul><ul><li>Draft revision issued for comments, still under review </li></ul></ul><ul><li>DoD Guide to Collection and Use of Past Performance Information (Attachment C) </li></ul>
  5. 5. Past Performance vs. Responsibility <ul><li>Responsibility : Yes/No assessment as to whether the contractor has requisite financial resources, business integrity, etc. to perform the solicited contract. FAR 9.1 </li></ul><ul><li>PPI Evaluation : One of several comparative evaluation factors used to select best value contractor. FAR Part 15 </li></ul><ul><li>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 </li></ul><ul><ul><li>Agency must define how past performance will be rated “unacceptable” in low price/technically acceptable RFPs </li></ul></ul>
  6. 6. Past Performance vs. Responsibility <ul><li>Distinction vs. Responsibility especially important for Small Business Concerns </li></ul><ul><ul><li>Negative responsibility determinations are referred to SBA for Certificate of Competency (COC) process </li></ul></ul><ul><ul><li>No right to COC process when Small Business Concern receives a poor rating based on past performance </li></ul></ul><ul><ul><li>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 </li></ul></ul>
  7. 7. Performance Assessment Reports (PARs) <ul><li>Performance Assessment Report (PAR) required for all contracts > simplified acquisition threshold ( $100k). FAR 42.1502(a) </li></ul><ul><ul><li>DoD class deviation to FAR threshold ($5 million) </li></ul></ul><ul><ul><li>Lower thresholds for certain DoD contract types </li></ul></ul><ul><li>PAR at contract completion </li></ul><ul><li>Interim PAR for contracts > 1 year </li></ul><ul><li>PAR “Report Card” format can vary agency </li></ul>
  8. 8. Performance Assessment Reports (PARs) <ul><li>PARs good only for 3 years from the date of contract completion. FAR 42.1503(e) </li></ul><ul><li>Agencies treat PARs as protected “source selection information” under FAR 3.104 </li></ul><ul><ul><li>Exempt from FOIA </li></ul></ul><ul><li>Contractor opportunity to review draft PAR </li></ul><ul><ul><ul><li>Must submit comments with 30 days </li></ul></ul></ul><ul><ul><ul><li>Review above contracting officer in case of disagreement </li></ul></ul></ul><ul><ul><ul><li>Final PAR within agency’s discretion </li></ul></ul></ul>
  9. 9. Contractor Performance Assessment Reporting System (CPAR S ) <ul><li>Web-enabled application that collects individual automated contractor performance assessment ratings (CPAR s ) </li></ul><ul><li>DoD-wide but not for classified contracts </li></ul><ul><li>Contractors comment on the CPAR and indicate concurrence or non-concurrence </li></ul><ul><li>DOD CPARS Policy Guide: </li></ul><ul><li>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 </li></ul>
  10. 10. Central Repository of Contractor PARs <ul><li>Past Performance Information Retrieval System (PPIRS): </li></ul><ul><li>Central warehouse for performance assessment reports received from agency performance information collection systems </li></ul><ul><ul><li>Populated by CPARS and other agency collection systems </li></ul></ul><ul><li>Query capability to retrieve report card information </li></ul><ul><li>Access limited to agency employees working on source selections </li></ul><ul><li>Contractors can only view their own PARs (access via </li></ul>
  11. 11. Categories of PPI Subject to Evaluation <ul><li>Information Provided by the Contractor </li></ul><ul><ul><li>Offeror may submit past performance information on Federal, S/L/E or commercial sector contracts. FAR 15.305(a)(2)(ii) </li></ul></ul><ul><li>PPI from “Other Sources” </li></ul><ul><ul><li>Agency may seek PPI from “any other source.” FAR 15.305(a)(2)(ii) </li></ul></ul><ul><ul><li>Includes formal PARs in PPIRS </li></ul></ul><ul><ul><li>Also includes less formal information known personally to agency employees or solicited by the agency, e.g., subcontractors and customers </li></ul></ul>
  12. 12. Categories of PPI Subject to Evaluation <ul><li>Subcontractor Past Performance Information </li></ul><ul><ul><li>Agency may consider subcontractor PPI where the subcontractor will perform a substantial portion of the contract. FAR 15.305(a)(2)(iii) </li></ul></ul><ul><ul><li>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) </li></ul></ul><ul><ul><li>Practical Tip: Do your homework on significant subcontractors’ PPI – it could affect your award! </li></ul></ul>
  13. 13. Common Problems and Disputes <ul><li>“Grade Inflation” </li></ul><ul><ul><li>General concern that grading has gotten too easy, with evaluators avoiding conflict by awarding high marks </li></ul></ul><ul><ul><li>As a practical matter, anything less than Blue/Excellent could suggest less than good performance. </li></ul></ul><ul><ul><li>Given the trend of “Grade Inflation,” even more important to challenge and rebut negative or even average past performance ratings </li></ul></ul>
  14. 14. Common Problems and Disputes <ul><li>“Stale” Past Performance Information </li></ul><ul><ul><li>Contracting Agency should not consider PPI that is more than 3 years old, measured from the date of contract completion. FAR 42.1503(c) </li></ul></ul><ul><ul><li>“ Fresher” PPI is favored over less current PPI. FAR 15.305(a)(2) </li></ul></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>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 </li></ul></ul>
  15. 15. Common Problems and Disputes <ul><li>“Rogue” Past Performance Information </li></ul><ul><ul><li>Agency considers untrue, conflicting or unsupported PPI </li></ul></ul><ul><ul><li>E.g., former employee or Government employee with a personal vendetta against contractor </li></ul></ul><ul><ul><li>Agency should discount or at least provide the opportunity to comment on such information FAR 15.306(d)(3) </li></ul></ul><ul><ul><li>Often won’t learn of rogue PPI until evaluation is complete and award decision made. Only remedy at that point is to protest </li></ul></ul><ul><ul><li>Protest may be worth filing simply to correct record, even if you don’t expect eventually to obtain the award </li></ul></ul><ul><ul><li>Practical Tip : PPI is an important topic for post award debriefing. </li></ul></ul>
  16. 16. Common Problems and Disputes <ul><li>Failure to Provide Notice of Adverse PPI </li></ul><ul><ul><li>Adverse PPI is anything that results in less than an excellent score during proposal evaluation. </li></ul></ul><ul><ul><li>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) </li></ul></ul><ul><ul><li>Agency must conduct communications with offerors when PPI is the determining factor keeping offeror from competitive range. FAR 15.306(b)(1)(i) </li></ul></ul>
  17. 17. Common Problems and Disputes <ul><li>Failure to Document Informal Sources of PPI </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>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 </li></ul></ul>
  18. 18. Common Problems and Disputes <ul><li>Failure to Consider the Correct PPI </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>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). </li></ul></ul>
  19. 19. Common Problems and Disputes <ul><li>Failure to Follow Evaluation Criteria . </li></ul><ul><ul><li>Past Performance must generally be a factor in all negotiated procurements > $100k. FAR 15.304(c)(3)(ii) </li></ul></ul><ul><ul><li>Agency must disclose all evaluation factors and specify their importance relative to price. FAR 15.304(c)(2) </li></ul></ul><ul><ul><li>Dismas Charities, Inc. 2003 C.P.D. ¶ 125 (June 2003) (sustaining protest for failure to follow stated past performance evaluation criteria) </li></ul></ul><ul><ul><li>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 </li></ul></ul>
  20. 20. Common Problems and Disputes <ul><li>Improper Use of PPI </li></ul><ul><ul><li>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) </li></ul></ul><ul><ul><li>OFPP Memorandum April 1, 2002: no downgrading for filing protests/claims or better scores for refraining from filing protests/claims. Attachment D. </li></ul></ul><ul><ul><li>Allegations of improper punishment, etc., are difficult to prove given (1) broad agency discretion and (2) limited discovery in bid protests </li></ul></ul>
  21. 21. Contractor Strategies <ul><li>Perform Well </li></ul><ul><ul><li>Obvious point, but make sure you adequately staff and train program teams to earn excellent ratings </li></ul></ul><ul><ul><li>Tie program teams’ individual performance ratings to successful contract performance ratings </li></ul></ul><ul><li>Communicate with Agency </li></ul><ul><ul><li>Regular formal (PMRs, etc.) and informal dialogue with CO and Government program team. </li></ul></ul><ul><ul><li>Request early warnings of possible performance problems – fix little problems before they become big problems. </li></ul></ul>
  22. 22. Contractor Strategies <ul><li>Don’t Fight About Everything </li></ul><ul><ul><li>Pick your battles carefully, rather than contesting every issue and appearing to be a difficult business partner </li></ul></ul><ul><ul><li>Reserve your battles for issues that truly matter </li></ul></ul><ul><li>Treat Government Concerns Seriously </li></ul><ul><ul><li>Respond promptly and thoroughly </li></ul></ul><ul><ul><li>Make sure company executives are informed and, where necessary, able to engage directly with the agency to resolve problems </li></ul></ul>
  23. 23. Contractor Strategies <ul><li>Shape RFP Requirements </li></ul><ul><ul><li>Informal dialogue, comments to draft solicitation, Q & A, or even agency-level or GAO protest </li></ul></ul><ul><ul><li>Define past performance evaluation factors to your benefit, e.g., size and relevancy to RFP </li></ul></ul><ul><ul><li>Battle is often won or lost prior to bid – once bids are submitted, too late to challenge evaluation criteria </li></ul></ul><ul><li>Provide PPI Tailored to the RFP’s evaluation factors </li></ul><ul><ul><li>“ One size fits” all approach often won’t work well. </li></ul></ul><ul><ul><li>Detailed summary of all current and recently-completed contracts: contract type, project description, agency, value </li></ul></ul>
  24. 24. Contractor Strategies <ul><li>Monitor sources of information on your PPI </li></ul><ul><ul><li>PPIRS </li></ul></ul><ul><ul><li>Errors not infrequent, many are easily corrected. </li></ul></ul><ul><ul><li>Ask your customers what they’re hearing about your PPI </li></ul></ul><ul><li>Participate in post-award debriefings </li></ul><ul><ul><li>Excellent source of information about how your PPI was evaluated and how well your B&P group responded </li></ul></ul><ul><ul><li>Keep detailed file on debriefings </li></ul></ul><ul><ul><li>Worth your time even if you don’t intend to protest </li></ul></ul>
  25. 25. Contractor Strategies <ul><li>Examine subcontractor/teammate PPI </li></ul><ul><ul><li>May have dramatic impact on your rating </li></ul></ul><ul><ul><li>Do this early in bid preparation process -- finding out that it’s negative at your de-briefing only helps on the next bid! </li></ul></ul><ul><li>Review and comment on PARs for existing contracts </li></ul><ul><ul><li>Formal review and comment process </li></ul></ul><ul><ul><li>Seek higher level review </li></ul></ul><ul><ul><li>Informal dialogue with Contracting Agency </li></ul></ul><ul><ul><li>Prepare strong response to negative findings with as much detail as space will permit </li></ul></ul><ul><ul><li>Be reasonable and dispassionate </li></ul></ul>
  26. 26. Limits on Marketing/Advertising Favorable PPI <ul><li>PARs generally represent Source Selection Information under FAR 3.104 </li></ul><ul><ul><li>Not for release except to Government and the contractor </li></ul></ul><ul><ul><li>CPAR policy provides that the contractor must ensure that it is not released to persons or entities outside the contractor’s control </li></ul></ul><ul><ul><li>CPAR policy prohibits the contractor’s use of or reference to CPAR data for advertising or promotional material </li></ul></ul><ul><li>Practical Tip: Don’t laminate favorable CPARs for easy distribution at trade shows! </li></ul>
  27. 27. Marketing/Advertising Favorable PPI <ul><li>What can you do? </li></ul><ul><ul><li>Make customers generally aware that you achieved strong past performance ratings on specific projects </li></ul></ul><ul><ul><li>Refer the customer to the specific source where they can access agency PARs </li></ul></ul>
  28. 28. New Developments <ul><li>H.R. 3030 – Database of contractor performance problems </li></ul><ul><ul><li>GSA to report recommendations for a centralized and comprehensive federal contracting and assistance database </li></ul></ul><ul><ul><li>Avoid AEY, Inc. scenarios </li></ul></ul><ul><ul><ul><li>Multiple T/D contracts in 2006 </li></ul></ul></ul><ul><ul><ul><li>Later awarded $300 million contract to supply Afghan Army </li></ul></ul></ul><ul><ul><ul><li>T/D and indicted on 71 counts of fraud </li></ul></ul></ul><ul><ul><ul><li>No PAR in PPIRS because T/D contracts below $5 million   </li></ul></ul></ul>
  29. 29. New Developments <ul><li>Proposed FAR Rule: </li></ul><ul><ul><li>Require PARs for all FSS and ID/IQ orders in excess of SAT ($100,000) </li></ul></ul><ul><ul><li>Some agencies already perform PARs on larger FSS and ID/IQ orders </li></ul></ul><ul><ul><li>PARs must identify evaluator </li></ul></ul><ul><ul><li>FAR Case 2006-022, Attachment E </li></ul></ul>