Without a robust past-performance system, a lot of the incentive for better vendor performance disappears, writes columnist Steve Kelman.
Steve Kelman is professor of public management at Harvard University’s Kennedy School of Government and former administrator of the Office of Federal Procurement Policy.
Past performance is an important tool in the contracting toolbox, but many contracting folks have come to regard it as a compliance exercise rather than an opportunity to help others do their jobs better.
When we fall into a rut with such a process, the first step toward getting out is to remember why we are doing it in the first place. I recently had three restaurant experiences in the course of a week that will help address that question.
It started when I had lunch at a Harvard Square bistro. I had never eaten there before, but I went because I had a coupon for 50 percent off. The food was good. The next day, I suggested to my lunch companion that we go back to that restaurant. The food — a different dish this time — was again superb, and not surprisingly, I intend to return again.
The second experience, at a place in Washington, D.C., was the opposite. I ordered free-range, organic roast chicken, and to my disappointment, the meat was dry, not at all living up to my image of tender, juicy organic chicken. Guess what? I won’t return.
The next day I ate lunch at a restaurant in a D.C. suburb. At the end of the meal, I ordered one of my favorite desserts — sticky rice with mango, an expensive choice at $6. When the waiter brought the dish, he apologized for the quality, saying the mangoes the restaurant had received were not as ripe as they should be, and so the dessert would be free.
Those three incidents illustrate why the government should be evaluating past performance. If we are satisfied with a supplier’s performance, we go back; if we’re not, we don’t. Thus, good suppliers flourish and bad ones wither. I didn’t get a free dessert due to my nice smile. The prospect of gaining my future business gave the restaurant the incentive to treat me well.
And finally, the bistro that never had gotten my business didn’t complain — the way some businesses do in the federal marketplace — that it should be awarded work even without any performance record. Instead, its owners did what businesses do in the real world: They encouraged me to give it a try, despite a lack of a past-performance record, by offering a good deal.
How did we get into that rut? The short answer is that when I was OFPP administrator, I made a mistake that launched a failure spiral. In 1994, when attention to past performance was getting started, I agreed to allow contractors who didn’t like a rating to appeal it one level above in the chain rather than simply giving them a chance to add their comments to the file.
With that provision in place, contracting officials feared lengthy hassles with contractors and often decided not to tell the truth about poor performance. Without honest information, past-performance report cards have lost their value as a differentiator in source selection, and filling out the score cards became a compliance exercise and a chore.
Dan Gordon, please break the failure cycle.