Checking on contractors’ work

Federal procurement executives soon might be able to get details about contractors’ past fines and penalties related to their federal work through a new database.

The database is the latest attempt to track, measure and improve federal contractor performance during a period of rapid growth in spending on contractors. Federal outsourcing awards expanded to $436 billion in fiscal 2007, more than double the $208 billion spent in fiscal 2000, according to federal information on USAspending.gov.

Judging contractor performance is a goal that has gained media attention and won widespread support in recent months, but determining the best ways to achieve the goal continues to be contentious. Although the available tools have become more sophisticated, procurement experts say they are not always applied appropriately.

The judgment is often subjective, said Marshall Doke, partner in government contracts at the Gardere law firm in Dallas and a member of the Acquisition Advisory Panel. “It has been a lot of smoke and mirrors.”

Efforts to weigh contractors’ past performance and judge present performance have been around for at least a decade, with corresponding programs providing metrics, offering incentives and imposing punishments. The General Services Administration lists information about suspended and debarred contractors in the Excluded Parties List System, and Defense Department managers file Contractor Performance Assessment Reports.

Federal managers have had access to the Web-based Past Performance Information Retrieval System (PPIRS) with performance information about contractors since 2002, though it has been described by Scott Amey, general counsel at the Project on Government Oversight as limited in scope. Results from the Bush administration’s performance initiative are displayed at ExpectMore.gov.

In recent months, critical reports have focused attention on shortcomings with the current approaches. In February,  DOD’s inspector general issued a report that enumerated many problems with the current contractor performance assessments, which are uploaded into PPIRS. For example, 68 percent of the reports were overdue, and 82 percent did not contain credible and justifiable narratives, the IG said. “As a result, government acquisition officials do not have all past performance information needed to make informed decisions,” the IG said.

Legislation and regulation
Time is running out for major contractor performance reforms to become law this year.
However, the House and Senate are still wrangling over the details of legislation that would create the database. The Senate would allow only federal managers to use the database. The House version of thr legislation does not include that limitation.

Rep. Carolyn Maloney (D-N.Y.) introduced legislation to create a government database of contractor performance that would be open to the public. The House passed the bill in April. Sen. Claire McCaskill (D-Mo.) proposed a similar version that would limit access. Her proposal was folded into the Senate National Defense Authorization Act (S. 3001). The Senate is debating the bill.

Danielle Brian, executive director of POGO, said limiting access to the database would make it less effective.

“It absolutely needs to be public for the sake of transparency,” Brian said.

Maloney and McCaskill modeled their proposals after the Federal Contractor Misconduct Project created by POGO. The watchdog group launched the database six years ago and updated it last year. The database chronicles instances of federal contractors subjected to public allegations of misconduct in their dealings with the government, individuals or private entities from 1995 to the present.

Experts debate how access to a similar go vernment Web site would affect the quality of the database’s information.

Alan Chvotkin, senior vice president of the Professional Services Council, said the limit makes sense. Access would help ensure that the information is complete and timely. If it were open to the public, federal procurement officers likely would provide fewer updates and more general statements because the officers are risk averse, he said. Chvotkin also recommended that the database should be based on facts only and contractors should have an opportunity for rebuttals.

However, Jon Desenberg, senior policy director at the Performance Institute, a nonprofit think tank, said he wants to see the database available to the public.

“Transparency breeds accountability,” said Desenberg, project manager for the Transitions in Government 2008 project. “I am completely in favor of opening it up.”

If the House and Senate pass their measures, lawmakers will have to negotiate the details in a conference meeting, an aide to McCaskill said.

Meanwhile, another piece of legislation with a high-profile sponsor is pending. Sens. Barack Obama (D-Ill.) and Tom Coburn (R-Okla.) introduced the Strengthening Transparency and Accountability in Federal Spending Act to add more information, including performance measures, to the USAspending.gov database.  In 2006, Congress passed legislation to establish the database.

This new legislation would allow visitors to the Web site to view copies of federal contracts and information about competitive bidding, earmarks, government leases, work quality, federal audit disputes, violations and criminal activities, federal tax compliance, and government reports.

Meanwhile, DOD began using earned value management in the 1990s, and it is required for some types of contracts. EVM was developed by the private sector to offer ongoing assessments of project cost, schedule and performance. The idea is for agencies to determine, at various points, how much value the government has earned. The Government Accountability Office recently praised the Federal Aviation Administration for effectively using EVM.

However, it is not always applied properly. Two other recent GAO reports noted that contractors did not properly support EVM. One report criticized Lockheed Martin’s lax approach to applying EVM in a defense contract, while the other report criticized Northrop Grumman’s quality of data for EVM for a Coast Guard contract. Neither company responded to requests for comment.

White House initiatives
One of the first contractor performance questions for the next president will be what to do with the Bush administration’s Program Assessment Rating Tool. The administration began the PART program six years ago, and it asks project managers to answer basic questions to asses the performance of hundreds of federal programs. The results are posted on ExpectMore.gov. However, critics say the approach is politically biased and delivers unpredictable results.

Contractor performance is a measure in the PART. For example, in the Homeland Security Department, the U.S. Visitor and Immigrant Status Indicator Technology program was judged to be moderately effective in 2006, the latest assessment available. Program managers said they regularly monitored contractor performance and held the contractor accountable to the benchmarks.

In addition to the PART, the Bush administration has issued an executive order establishing performance improvement officers for each agency.

Experts questions whether the next administration will use it.

“It is not getting the attention and focus I had hoped for,” Desenberg said. But he has not stopped trying to bring attention to it. His coalition is developing a series of white papers to bring more attention to performance issues for both government agencies an contractors.

However, Congress had ignored the Office of Management and Budget’s performance initiatives. Desenberg said lawmakers see them as too politically motivated.

“They are perceived as an attempt to embarrass members of Congress,” he said.

Jonathan Breul, executive director of the IBM Center for the Business of Government, said he has a mixed view of the initiatives. On one hand, the PART initiative has strengthened performance metrics and gathered substantial information on programs, but its critics say they believe it is politically and ideologically motivated.

Nonetheless, the next president is likely to make some use of the developments in contractor performance measurements, or at least to continue the conversation, Desenberg said.

“Contractor performance and responsibility issues are very hot topics right now. With contract spending approaching the $500 billion mark, more people are paying attention to how the government is spending taxpayer money,” Amey said.