Burton: Past performance, future results

During the past several years, we have seen a growing emphasis on improving the performance of federal agencies’ programs. For example, the President’s Management Agenda has focused on a results-oriented government and high-performing programs. The logical next step would be increased attention on the performance of private contractors by the next administration and Congress.

Attention first turned in that direction in 1995, when an amendment to the Federal Acquisition Regulation (FAR) required the evaluation of contractors’ past performance during the source-selection process. That regulatory change was the result of acquisition reform legislation. Today, agencies rely heavily on contractor performance evaluations when making those decisions.

But over the years, there has been growing criticism about the collection, reliability and use of contractor performance data. Contractors have challenged source-selection decisions, arguing that agencies’ performance evaluations are unfair or biased. Additionally, the Government Accountability Office has upheld several contractor challenges on such grounds.

When reviewing a case involving the government’s evaluation of a contractor’s performance, GAO takes into consideration the subjective nature of those evaluations. Understandably, contractors might disagree with the evaluations, arguing that their performance is better than the performance reflected in the agency’s evaluation.

Still, the government’s interest in contractor performance is growing. Congress included a provision in the fiscal 2009 National Defense Authorization Act that provides for detailed FAR guidance on linking award and incentive fees to contractor performance. The new statute requires that all new fee-based contracts tie fees to contractor results, as defined in terms of program cost, schedule and performance.

The government’s interest in contractor performance is also reflected by the Office of Federal Procurement Policy’s efforts to improve the quality and accuracy of data in the Past Performance Information Retrieval System. The automated system now is the government’s single source for contractor performance data.

It is crucial that PPIRS accurately reflect a contractor’s performance, and contractors must play a central role in ensuring the accuracy of the data entered into the system. Under the FAR, contractors have the right to review their performance data and can submit comments and rebutting statements to the contracting officer. 

As Congress demands a more transparent acquisition system, it is likely that more performance data will be required. At a minimum, agencies will rely more heavily on past-performance data when making source-selection decisions. The government and industry would be best served if the contractor performance data maintained by the government is accurate, reliable and complete. To that end, industry must assume a leadership role in ensuring the accuracy of its own performance data. That would allow the government to issue past-performance evaluations that are less subjective and more useful to the acquisition community.

Burton is a partner at law firm Venable in Washington and former deputy administrator of the Office of Federal Procurement Policy. 

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