Performance: Past is prologue

Members of Congress, concerned by several recent high-profile contracting fumbles, want the Defense Department to improve its processes for collecting and using information about contractors’ past performance. The Senate Armed Services Committee thinks DOD is sometimes getting poor performance from contractors because of its own poor performance in checking companies’ track records, according to a committee report. “Contracting officers have become somewhat lax,” said Robert Burton, former deputy administrator at the Office of Federal Procurement Policy and now partner at law firm Venable.In the report, which accompanied the fiscal 2009 National Defense Authorization Act (S. 3001), the Senate committee pressed officials to show how they intend to improve their use of past-performance information. At least some of that information is seriously flawed, the report states.In one example the committee cited, the Air Force awarded a communications contract to a company that had received top ratings on its past-performance. However, it was a new company that had never done similar work.In another case, the Army awarded a $300 million ammunition contract to AEY, a small ammunition company. The company didn’t package the materials as the contract required. The company also provided ammunition originally made in China, while telling the Army it came from Hungary, according to congressional testimony.However, AEY had good past-performance information. Ralph Merrill, president of weapons dealer Vector Arms, wrote in an e-mail message to a DOD contracting officer that AEY had been a good working partner and he would work with the company again. He described the company as “reliable, competent, efficient and honest,” in that 2006 message. Despite the good recommendation, the Army ultimately ended the contract because AEY was “in direct violation of contract requirements,” according to the testimony.Meanwhile, DOD’s  information-gathering process is haphazard, according to an inspector general review. The IG found that 82 percent of DOD’s past-performance assessments didn’t contain sufficient narratives to establish that ratings were credible and justified. Similarly, the IG found that 68 percent of assessments were overdue and 39 percent were overdue by a year or more.“Government acquisition officials do not have all past-performance information needed to make informed decisions,” DOD’s IG concluded in a February report on past-performance assessments.Learning of these problems and specific examples, the Senate panel is pressing DOD officials to show it how they intend to improve their use of past-performance information. By Oct. 2009, the committee wants to know the steps DOD officials intend to take to have the acquisition workforce gathering the information in greater detail and putting it to better use.In response to the IG’s report, officials from DOD and the Air Force said they would require contracting officers to register contracts into a database within a month of award and have the officers complete their assessments in four months of the performance evaluation.As officials attempt to get more information compiled and filed  on time, Burton said the performance information can only be used to a greater extent if the officials take time to really analyze a company’s performance, instead of merely jotting down an unsubstantiated rating. But with the number of acquisition workers growing only slightly compared with federal spending, contracting officers have limited time available to review past work.In addition to heavy workloads, the officers are also required to do administrative tasks, such as gathering and entering information into databases such as the Federal Procurement Data System, Burton said. He recommended agencies reorganize the work and give the more mundane task s to lower-grade employees.Despite their workload, contracting officers need to make time to write narratives about a contractor’s work, Burton said. Those narratives can help the next agency decide if the contractor is a worthy partner.However, Marcia Madsen, chairwoman of the Acquisition Advisory Panel and partner at law firm Mayer Brown, said past-performance reviews are subjective and can be hard to analyze.“Past performance is a convenient tool to say it’s always the contractor’s fault,” she said. It’s important to talk to people who have worked with the contractor and read any rebuttal the company files with the contracting officer’s account of the quality of work, Madsen added. In a best-practices guide released in 2000, OFPP urged contracting officers to back up their general scores with detailed, written reasons. That allows others to understand the rationale for the overall rating. OFPP also reminded contracting officers that others “may need to consider a contractor’s rebuttal, and they need to know the story behind your scores.”To get a good record of a contractor’s work, Burton said an agency’s acquisition team, from the program manager to the contracting officer’s technical representative, should settle early in the acquisition planning process on the relative importance past performance will play in determining the contract’s award.In March, the U.S. Court of Federal Claims scolded the General Services Administration for the way officials reviewed past performance of the 62 companies that bid on the 10-year, $50 billion Alliant governmentwide acquisition contract for telecommunications and information technology. GSA hired another firm to check the companies. But it didn’t ask in-depth questions and didn’t follow up on answers that could have shed light on a company’s work history.In his ruling, Judge Francis Allegra said GSA encouraged the contractors to ask follow-up questions but gave minimal guidance about what to ask. “It should come as little surprise that the answers received — or at least those transcribed — often did not provide the sort of detail that would allow agency personnel to evaluate past performance rationally in accordance with the evaluation criteria,” Allegra wrote. He upheld a lawsuit by several companies that bid and lost on the Alliant contract because of past performance and several other factors. GSA officials expect to award the contracts in December.Burton said there are many ways that agencies go about collecting and evaluating contractors’ past-performance information.“Conformity is the issue,” he said.Acquisition regulations require departments and agencies to share past-performance information with one another to support future award decisions. And Burton said the Past Performance Information Retrieval System has helped move toward a way of swapping information.Nevertheless, officials must make past-performance information a priority, the DOD IG wrote, or acquisition officials won’t know whether they’re making a good decision that will yield a return on their investment.