Study finds past performance puts burden on contractors

Many agencies that are using vendor past-performance ratings to evaluate bids have turned the application of this evaluation factor into a bureaucratic exercise that may be thwarting the Office of Federal Procurement Policy's intent in promoting it, a consultant's study has found.

Sandra Baxter, president of Applied Research Analysts, McLean, Va., said most agencies are using past performance to evaluate bidders for a variety of contracts, but few agencies use it to streamline the procurement process as OFPP intended. Meanwhile, although Baxter found that there was wide variation in how agencies collected past-performance information, vendors, agencies or both often had to take extra time and spend more money to gather and evaluate this data.

"It seems agencies have really missed the intent of past performance, which is to minimize the burden on contractors while at the same time not giving contractors discretion to report only contracts" on which they performed well, she said. "As a contractor, it's very hard to know what an agency is going to ask for. It's turned out to be very burdensome."

Nevertheless, Baxter reported, agencies found the information they collected to be valuable and considered the new policy a success when vendors declined to bid a procurement because past-performance ratings were being considered. Half of the 17 agencies she surveyed said they would use past performance in all their buys this year.

And the policy has had an "unintended but positive consequence of encouraging contractors to develop that information and use it internally to do a better job," despite the administrative burden of collecting the information.

Baxter conducted the past-performance survey and a separate survey on agencies' use of performance-based service contracting for her firm's own purposes but has presented the data to OFPP. She provided FCW with a summary of her findings and discussed those findings in an interview.

Two years ago nearly two dozen agencies pledged to OFPP that they would use past performance in certain procurements. OFPP wanted agencies to use past performance as a significant evaluation factor and to develop a system for collecting vendor information, but OFPP largely left it up to each agency to decide how to go about applying the policy.

Agencies were supposed to use past-performance information to weed out incompetent contractors at the start of a procurement. But Baxter found that although this data was used in nearly two-thirds of agency procurements last year, it was used to make competitive-range selections in only one-tenth of those procurements. And only half of agencies she surveyed said they would be able to meet new Federal Acquisition Regulation requirements on past performance this year.

Steven Kelman, administrator of OFPP, said the main message of the study is that agencies need to use past performance more aggressively, as the Defense Department has indicated it will in a proposed Defense Federal Acquisition Regulation Supplement amendment issued in November.

"It was very interesting to see how often in the pledge contracts past performance was the deciding factor in contract awards," Kelman said. "If I were a vendor, that would send me a very strong signal."

But, Kelman continued, "it is very important to get across a very strong message that agencies should be using...past performance as an occasion to examine the entire source-selection process," not just "add on" these ratings as an extra evaluation factor.

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