Increasing Your Competitive Edge: Protecting and Managing Your Past Performance Information

I. Introduction

7515669_sA contractor’s past performance has always been a part of the federal procurement system. In addition to being an informal consideration (i.e., customers tend to do what they can to select contractors that perform well), past performance has long been an express evaluation factor in procurements.[1]

However, prior to the early 1990s, past performance was more often considered in the context of a contractor’s responsibility, rather than as evaluation factor in and of itself. It wasn’t until the early 1990s that a contractor’s past performance began receiving significant attention as a separate evaluation factor.

In 1993, the Office of Federal Procurement Policy (“OFPP”) issued Policy Letter 92-5, Past Performance Information,[2] which established a policy requiring Executive agencies to evaluate contractor performance on all contracts over $100,000 and to specify past performance as an evaluation factor in all competitively negotiated contracts expected to exceed $100,000.[3] The following year, in the Federal Acquisition Streamlining Act of 1994 (“FASA”),[4] Congress found that contracting officers should consider past performance as an indicator of successful future performance and required OFPP to establish policies and procedures concerning the collection and use of past performance information.[5] In 1995, the Federal Acquisition Regulation (“FAR”) was amended to require the collection of past performance information (“PPI”) and the evaluation of contractors’ past performance.[6] Use of PPI was phased-in, beginning with contracts awarded on or after July 1, 1995 and ending with those awarded on or after January 1, 1999, after which date the FAR required evaluation of PPI on all competitively negotiated contracts exceeding $100,000.[7]

In May 2000, the OFPP issued its Best Practices for Collecting and Using Current and Past Performance Information.[8] The OPFF Guide recommends that the weight assigned to PPI in negotiated procurements be at least 25 percent of the total evaluation, or equal to other, non-cost evaluation factors.[9] The use of PPI allows the government to avoid poor performers (or, at least, those with poor performance records) and award to preferred companies. Indeed, contractors with a strong past performance record can justify a higher price.[10] As a result of these statutory and regulatory changes, PPI has become increasingly important in the award of negotiated contracts. Thus, contractors must understand how it is properly collected and used, and develop and implement strategies for protecting and managing past performance information.

II. Common Problems Regarding the Use of PPI

A variety of problems can arise during an agency’s evaluation of a contractor’s PPI. Unfortunately, many of these problems are recurring in nature.

A. “Stale” PPI

The FAR requires agencies to use past performance information that is within three years of the completion of the evaluated
contract or order, except in the case of construction or architect-engineer contracts, where agencies are allowed to use information within six years of project completion.[11] Further, within the three-year period, the FAR favors current PPI over old PPI.[12] The DoD specifically recommends that evaluators “consider the most recent data available.”[13] The GAO agrees, and will seldom find unreasonable an agency evaluation giving greater weight to more recent PPI, even if the RFP does not specifically require such a result.[14] Likewise, the GAO has little trouble sustaining protests claiming improper evaluation of PPI where the agency fails to consider the offeror’s performance as the incumbent contractor for the same services being solicited because such contracts are the most relevant, given the scope of work and the currency of performance.[15] The Court of Federal Claims concurs.[16]

B. “Impeaching” PPI

Because agencies are free to consider information from “any sources,” there exists the possibility that the agency will receive
and consider untrue, conflicting, or unsupported PPI. This possibility is particularly troubling in the context of conflicts with an agency’s official CPAR, which was subject to comment by the contractor and, if necessary, review at a level above the initial rater. For example, consider the situation in which the source selection team receives an official CPAR from the PPIRS and decides to ask the agency further questions regarding the report. Further, instead of discussing the CPAR with the initial rater or the reviewer, the source selection team interviews someone else, whose opinion may not be reflected in the CPAR. Should that individual be allowed to impeach the agency’s formal evaluation?

Those are the circumstances described in Wadsworth Builders, Inc.[17] There, the source selection team received a CCASS report on the protester stating that the protester’s performance on a particular contract was “Satisfactory.”[18] Not content with the CCASS itself, the contracting officer contacted the contract administrator on the former project, who informed the contracting officer that the protester’s performance was, in fact, “at best…satisfactory,” and commented negatively on the protester’s quality of workmanship, willingness to correct deficiencies, and coordination with its subcontractors.[19] Such an exchange is troubling for several reasons.

First, such comments clearly devalue the original report: The contractor’s performance is no longer “Satisfactory”; it is now “at best . . . satisfactory.” Accordingly, all things being equal, that contractor’s “Satisfactory” will carry less weight than a competitor’s “Satisfactory.” Second, no express safeguards exist to ensure that the individual making post hoc comments on the agency report has either an adequate basis or the requisite authority to make such comments. Third, the agency report is a product of review and comment and there appears to be no basis in the FAR allowing the agency to modify the report after it has been finalized. Finally, a contractor in such a position may never know that its rating was devalued in such a manner.

C. Failure to Provide Notice of Adverse PPI

There are circumstances in which the government either may or must disclose to an offeror the PPI on which the government relies. First,
if an award will be made without discussions, an offeror may be given an opportunity to clarify adverse past performance information to which the offeror has not previously had an opportunity to respond.[20] Unfortunately, protests based upon the government’s failure to provide such an opportunity often do not fare well, because the government has significant discretion in determining whether to provide such notice. In A.G. Cullen Constr., Inc., for example, the Comptroller General said:

With regard specifically to clarifications concerning adverse past performance information to which the offeror has not previously had an
opportunity to respond, we think that, for the exercise of discretion to be reasonable, the contracting officer must give the offeror an opportunity to respond where there clearly is a reason to question the validity of the past performance information, for example, where there are obvious inconsistencies between a reference’s narrative comments and the actual ratings the reference gives the offeror. In the absence of such a clear basis to question the past performance information, we think that, short of acting in bad faith, the contracting officer reasonably may decide not to.[21]

Second, when establishing a competitive range, the government shall hold communications with offerors whose PPI is the “determining factor preventing them from being placed within the competitive range.”[22] These communications must address adverse PPI to which the offeror has not previously had an opportunity to reply.[23]

Third, after the competitive range is established, the government shall discuss with each remaining offeror past performance information to which the offeror has not previously had an opportunity to respond.[24] This is an area generating frequent protests alleging either: (1) the agency failed completely to disclose the PPI at issue;[25] or (2) the disclosure was insufficient and, therefore, not meaningful.[26] In response, agencies may argue that a failure to provide notice did not prejudice the protester because the agency did not consider the information to be adverse, even if the PPI was considered by the agency. Such an argument is not generally persuasive.[27] An agency may also argue that there was no need to provide notice to the protester because the protester should have already known about the negative PPI. This argument is also generally unpersuasive.[28]

D. PPI Evaluation Not Supported by the Record

An agency must document its evaluation sufficiently to demonstrate that the evaluation was reasonable and conducted in accordance with the stated evaluation criteria. The GAO will not substitute its “judgment for the agency’s reasonable past performance conclusions” and will “question those conclusions only where they are not reasonably based or are undocumented.”[29] Where the record contains no basis for the conclusion reached by the agency, a protest likely will be sustained. Thus, the GAO sustained a protest challenging the evaluation of PPI where the documentation of the evaluation was found to be “sparse and conclusory.”[30] This is particularly true when dealing with informal sources of PPI. In Gemmo Impianti SpA,[31] the agency rated the proposed awardee’s PPI as “superior”; however, the record of interviews on which that rating was based did not contain the word “superior” and did not provide a basis for the distinction in the ratings given to the protester and the awardee.

E. Failure to Consider Relevant PPI

An agency is not required to consider all PPI references listed in a proposal.[32] However, some information is just too relevant to ignore. The most common example of such PPI is that pertaining to the offeror’s status as the incumbent. Indeed, there are numerous examples where agencies simply failed to consider such PPI.[33] Of course, the opposite is also true. That is, the agency is not permitted to consider as relevant PPI that fails to meet the definition of relevancy established in the solicitation.[34]

F. Absence of Relevant PPI

Offerors with no relevant PPI may not be evaluated “favorably or unfavorably.”[35] However, when PPI is available, but simply not provided by the offeror, the agency is not so bound. For example, in Forest Regeneration Servs., LLC,[36] the protester stated in its proposal that it had performed similar contracts, but failed to provide the information pertaining to its PPI required by the RFP. As a result, the agency reasonably rated its proposal “unacceptable” in this area.[37] Another form of protest arising in this area involves a claim that the government failed to consider certain PPI as relevant and, as a result, the protester received a “neutral” rating, rather than some higher rating to which it believed itself to be entitled.[38] For example, the government may consider the experience of supervisory personnel in evaluating the performance of a new business.[39]

G. Use of Other’s PPI

As mentioned above, depending upon the circumstances, and absent a prohibition in the solicitation, the agency may obtain PPI regarding an offeror’s proposed subcontractor if the subcontractor will perform a substantial portion of the contract and the information is relevant.[40] The FAR also permits the collection and use of affiliate, predecessor, and parent PPI, so long as the information is relevant.[41] According to the GAO, in determining whether one company’s PPI should be attributed to another, the agency must consider not simply whether the companies are affiliated, but whether the relationship may affect the contract performance by the offeror.[42]

The use of predecessor, affiliate, and subcontractor PPI is a two-edged sword. There are situations in which such information provides the basis for a strong past performance rating for the offeror. However, there are situations in which the opposite is true.

III. Contractor Strategies

There are many lessons to be drawn from a review of GAO and COFC protest decisions addressing the collection and use of PPI. Overall, these lessons, set forth below, demonstrate that companies that do business with the government can, and should, develop and use a program to manage their past performance information.

A.Perform Well

This is an obvious point, but it must be emphasized because it relates directly to the first—and arguably most important—assessment area, quality.[43] There are companies that focus more on the next job (where it is coming from and how to get it) than they do on the current job. Contractors need to ensure their program teams are adequately trained, both to do the job at hand and to protect the company’s PPI. Companies should consider linking individual ratings to successful contract performance ratings. Such linkage is not uncommon on contracts with award fee provisions. However, the linkage may be less common on other contracts.

B.Communicate with Agency

Communicating with the agency is a key factor in preventing small problems from becoming large problems, the kind of problems that merit reference in a performance evaluation report. Regular formal (PMRs, etc.) and informal dialogue with the contracting officer, program management, and members of the agency’s project team will provide the necessary information. Such communication will also demonstrate a desire to satisfy the customer and a willingness to prevent problems. This is tied directly to at least two of the suggested performance assessment areas, quality and business relations.[44]

C.Pick Battles Carefully and Fight Honorably

One of the easiest ways in which to guarantee a less than stellar performance evaluation is to create or participate in a contentious relationship with the agency. That does not mean that contractors need to let the agency run roughshod over them. To the contrary, the government expects that contractor’s will both enforce the contract and stand up for themselves. But not every issue calls for a nuclear response. Further, it is always important to remember that reasonable people can disagree and still be reasonable.

D.Participate in CPAR Process

Contractors need not wait until the agency prepares  the CPAR before becoming involved in the process. Agencies must prepare past performance evaluations annually and upon project completion. Contractors should consider preparing and submitting a self-assessment before the agency begins preparing its own. While the self-assessment should follow the same format the agency uses, the contractor is not otherwise limited. That is, there is no character or page limit. The assessment should be well-written, with specific examples supporting the self-assessment and supporting documentation attached.

In addition to performing a self-assessment, contractors must carefully evaluate the agency’s assessment. Any disagreements should be identified and a response prepared because there may be no other opportunity to do so. Responses must be carefully crafted so that the response is complete, yet complies with applicable limitations. Moreover, strident, emotional responses fare poorly. Responses should be detailed, reasonable and dispassionate.

E.Perform Complete Review of Contracts within Relevant Period

Contractors should perform a complete review, analysis, and summary of all contracts performed in the most recent
three-year period. Any performance problems should be researched and explanations for the problem and/or any solution should be documented. Again, any such explanations should be detailed and well-supported but not overly defensive or shrill.

This task serves several purposes. It results in a database from which the contractor can select the most current, relevant projects to submit in response to past performance questionnaires. It also allows contractors to identify potential trends relating to performance problems and/or solutions.

F.Monitor “Public” Sources of Information regarding PPI

Contractors should routinely review the relevant government databases containing their PPI, such as PPIRS, as well as those databases reported in PPIRS. Errors are not infrequent and an error there can be costly. When an agency obtains information from PPIRS, it can reasonably assume that the contractor has had an opportunity to respond to any negative PPI contained therein. Accordingly, the agency may not be obligated to provide the contractor with an opportunity to respond to any adverse information obtained from PPIRS.

G.Provide PPI Tailored to RFP

Many contractors still apply a “one size fits all” approach to providing PPI in response to a RFP. That is a mistake for many reasons. First, it simply doesn’t reflect well on the contractor’s ability to read, understand, and respond to the RFP. While there may not be an evaluation factor specifically addressing that subject, it certainly doesn’t impress evaluators. Second, a stock PPI response may not contain the information called for by the RFP.[45] Third, even if it does contain the necessary information, a stock PPI response may not present the information in a manner or format that ensures an accurate evaluation. For example, a long narrative discussion addressing past contracts may not be the best way to provide specifically requested facts regarding such contracts.

H.Closely Examine Subcontractor’s and Teammate’s PPI

To the extent that a contractor intends to rely on PPI from others, it is important to evaluate PPI for potential subcontractors
or team members. Moreover, it is important to perform this task early in the proposal preparation process. Teaming agreements, memoranda of understanding, subcontract agreements, and any other agreements entered into in anticipation of submitting a proposal and performing the contract together, if awarded, need to take this issue into consideration. For example, language can be included in such agreements that permit contractors to terminate the agreement and seek other partners if PPI of the prospective team member fails to meet certain standards.

Of course, all this must be done with the understanding that PPI is source selection sensitive.[46] The Air Force takes the position that the “contractor must ensure the CPAR is never released to persons or entities outside the contractor’s control.”[47] As a result, contractors must execute confidentiality agreements that provide sufficient control over their PPI before providing it to prospective team members.

I.Participate in Post-Award Debriefings

Past performance information is a subject tailor-made for discussion during post-award debriefings. As mentioned above, the agency is not limited to the sources of PPI provided by the contractor. However, the agency is required to provide past performance information on the debriefed offeror.[48] Unfortunately, the FAR does not provide any further guidance on the issue. As a result, contractors must be prepared to ask relevant questions regarding the past performance information on which the agency relied.[49] For example, one relevant question would be whether the government received informal information regarding the contractor’s performance on a project for which a formal CPAR exists and, if so, what information was received? There are a variety of other questions that can, and should, be asked of the agency during a debriefing, depending upon the circumstances.

IV. Conclusion

Past performance information is a significant factor in the award of most contracts awarded using FAR Part 15. It can be an important consideration in the government’s best value determination. Indeed, contractors whose past performance information reflectsexcellent past performance can justify that award of a contract at a higher price. Given the importance placed upon past performance information by the government, contractors must carefully monitor and implement strategies to protect and manage their past performance information.

[1] See,
, Aerojet General Corp., B-165488, 1969 U.S. Comp. Gen. LEXIS 3105 (Jan. 17, 1969) (RFP provided that “past performance on
other similar contracts” would be one of five evaluation factors).

[2] 58
Fed. Reg. 3573 (1993).

[3] Id.

[4] Pub. L. No. 103-355, 108 Stat. 3243, 3272 (1994) (codified at 41 U.S.C. § 1126 (2011)).

[5] Pub. L. No. 103-355, § 1091(b)(1), 108 Stat. 3272, 3272

[6] Federal Acquisition Circular No. 90-26, 60 Fed. Reg. 16,718 (Mar. 31,1995).

[7] Id. at 16,719.

[8] Office of Federal Procurement Policy, Office of Management and Budget, Best Practices for Collecting and Using Current and Past Performance Information (May 2000) [hereinafter OFPP Guide].

[9] Id. at 18.

[10] Id. at 17.

[11] FAR § 42.1503(g).

[12] FAR § 15.305(a)(2)(i) (currency and relevance of information must be considered).

[13] DoD Guide, supra note 16, at 8.

[14] See, e.g., R& K Contractors, Inc., B-292287, 2003 Comp. Gen. Proc. Dec. ¶ 149, 2003 U.S. Comp. Gen. LEXIS 139 (agency reasonably selected older, but higher-rated PPI over more recent, but lower-rated PPI); Parmatic Filter Corp., B-285288.3; B-285288.4, 2001 Comp. Gen. Proc. Dec. ¶ 71, 2001 U.S. Comp. Gen. LEXIS 72 (more recent negative PPI outweighs older more positive PPI).

[15] SCIENTECH, Inc., B-277805.2, 98-1 Comp. Gen. Proc. Dec. ¶ 33, 1998 U.S. Comp. Gen. LEXIS 25 (while recognizing there exists no requirement to check all references provided, the GAO found it unreasonable not to consider performance as incumbent).

[16] Seattle Sec. Servs., Inc. v. United States, 45 Fed. Cl. 560 (1999).

[17] B-291633, 2003 Comp. Gen. Proc. Dec. ¶ 43, 2003 U.S. Comp. Gen. LEXIS 25.

[18] Id.

[19] Id.

[20] FAR § 15.306(a)(2).

[21] B-284049.2, 2000 Comp. Gen. Proc. Dec. ¶ 45, 2000 U.S. Comp. Gen. LEXIS 21.

[22] FAR § 15.306(b)(1)(i).

[23] Id.

[24] FAR § 15.306(d)(3).

[25] See,
, Biospherics, Inc., B-278278, 98-1 Comp. Gen. Proc. Dec. ¶ 161, 1998 U.S. Comp. Gen. LEXIS 224 (agency improperly failed to advise offeror of negative past performance to which offeror had not been given an opportunity to respond).

[26] See,
, Exelon Servs, Fed. Group, B-291934, 2003 Comp. Gen. Proc. Dec. ¶ 86, 2003 U.S. Comp. Gen. LEXIS 69 (protester alleges that discussion questions were too broad and generic and, as a result, failed to provide a reasonable opportunity for a response).

[27] See Dismas Charities, Inc., B-292091, 2003 Comp. Gen. Proc. Dec. ¶ 125, 2003 U.S. Comp. Gen. LEXIS 103.

[28] See, e.g., Aerospace Design & Fabrication, Inc., B-278896.2, B-278896.3, B-278896.4, B-278896.5, 98-1 Comp. Gen. Proc. Dec. ¶ 139, 1998 U.S. Comp. Gen. LEXIS 203 (agency argued that protester, as subcontractor on prior contract, should have known about performance problems discussed during award fee evaluations).

[29] KMR, LLC,
B-292860, 2003 Comp. Gen. Proc. Dec. ¶ 233, 2003 U.S. Comp. Gen. LEXIS 219 (protest sustained where agency’s record fails to indicate how evaluated past performance of awardee is relevant).

[30] M&S Farms, Inc., B-290599, 2002 Comp. Gen. Proc. Dec. ¶ 174, 2002 U.S. Comp. Gen. LEXIS 161 (prior to establishment of competitive range, the only mention of PPI was in the technical evaluation committee’s report).

[31] B-290427, 2002 Comp. Gen. Proc. Dec. ¶ 146, 2002 U.S. Comp. Gen. LEXIS 117.

[32] HLC Indus., Inc., B-274374, 96-2 Comp. Gen. Proc. Dec. ¶ 214, 1996 U.S. Comp.
Gen. LEXIS 594.

[33] See Seattle Sec. Servs., v. United States, 45 Fed. Cl. 560 (1999); GTS Duratek, Inc., B-280511.2, B-280511.3, 98-2 Comp. Gen. Proc. Dec. ¶ 130, 1998 U.S. Comp. Gen. LEXIS 379; SCIENTECH, 1998 U.S. Comp. Gen. LEXIS 379; Int’l Bus. Sys., Inc., B-275554, 97-1 Comp. Gen. Proc. Dec. ¶ 114, 1997 U.S. Comp. Gen. LEXIS 114; Inlinqua Sch. of Languages, B-229784, 88-1 Comp. Gen. Proc. Dec. ¶ 340, 1988 U.S. Comp. Gen. LEXIS 367.

[34] KMR, LLC,
2003 U.S. Comp. Gen. LEXIS 219 (agency improperly considered performance on two contracts as relevant when the contracts were not the “same or similar” as scope of work described in the RFQ).

[35] FAR § 15.305(a)(2(iv).

[36] B-290998, 2002 Comp. Gen. Proc. Dec. ¶ 187, 2002 U.S. Comp. Gen. LEXIS 169.

[37] Id. (“An offeror in a negotiated procurement acts at its peril when its proposal does not provide specific information requested by the solicitation’s instructions.”).

[38] See, e.g., Bevilacqua Research Corp., B-293051, 2004 Comp. Gen. Proc. Dec. ¶ 15, 2004 U.S. Comp. Gen. LEXIS 2 (protester’s listed references were for projects too small to be considered relevant; agency properly evaluated protester’s PPI as “neutral”); CMC & Maint., Inc., B-292081, 2003 Comp. Gen. Proc. Dec. ¶ 107, 2003 U.S. Comp. Gen. LEXIS 78 (the agency was not unreasonable in determining that contracts less than 50 percent of the annual government estimate were too small to be relevant, or that contracts unrelated to services involved were similarly not relevant).

[39] See, e.g., Gen. Atomics, B-287348, B-278348.2, 2001 Comp. Gen. Proc. Dec. ¶ 169, 2001 U.S. Comp. Gen. LEXIS 192.

[40] FAR § 15.305(a)(2)(iii); see also Premier Cleaning Sys., Inc., 1992 U.S. Comp. Gen. LEXIS 1195; AeroVironment, Inc., 1989 U.S. Comp. Gen. LEXIS 379.

[41] FAR § 15.305(a)(2)(iii).

[42] Perini/Jones, Joint Venture, B-285906, 2002 Comp. Gen. Proc. Dec. ¶ 68, 2000 U.S. Comp. Gen. LEXIS 227; ST Aerospace Engines Pte. Ltd., B-275725, 97-1 Comp. Gen. Proc. Dec. ¶ 161, 1997 U.S. Comp. Gen. LEXIS 169.

[43] OFPP Guide, supra note 8, at 10.

[44] Id.

[45] See, e.g., Gen. Atomics, 2001 U.S. Comp. Gen. LEXIS 192 (statement that offeror had performed approximately 1,000 government contracts was insufficient in light of the requirements of the RFP to identify specific information including the name of the project, the government point of contact and telephone numbers)

[46] FAR § 42.1503(d); OFPP Guide, supra note 8, at 13-14.

[47] Department of the Air Force, Contractor Performance Assessment Reporting System ¶ (May 2002).

[48] FAR § 15.506(d)(2).

[49] FAR § 15.506(d)(6). The debriefing shall include “[r]easonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed.” Id. Thus, the agency should respond to relevant questions regarding the past performance information it evaluated and the results of that evaluation.