By Steve Kelman

Blog archive

Contracting Contrasts: Remembrance of Things Past vs. Crime and Punishment

Ever since I started being involved with government procurement close to 20 years ago, one of the themes closest to my heart has been increasing the ability of the government to use vendor past performance as an important factor in making future contract awards. I actually just wrote a column on revitalizing the government's use of past performance, that will appear as my next column in FCW.

After writing the column, I noticed that a subcommittee of the House Government Oversight Committee held a hearing last week on creating a better government database on contractor performance.

Should I be happy? Well, unfortunately there is a pretty big difference between my own approach to the government's use of past performance -- and the way people use past performance in their everyday lives in making marketplace decisions, I might add -- and the approach the lawmakers at this hearing advocated.

In my view, past performance should be used both to punish poorly performing vendors AND ALSO to reward well-performing ones. This is what we do as consumers -- if we have a bad experience as a customer, we stop buying from a product or service provider, but if we have a good experience, we go back. This sends the right signals in the marketplace.

By contrast, this hearing, and the accompanying legislation, was centered exclusively on the punishment part. The bill that has been introduced calls for a central database of disbarments, contract terminations, and civil/administrative proceedings against contractors.

Committee members never seemed to have heard the message that you can catch more flies with honey than with vinegar. The view expressed in this hearing -- and unfortunately it is typical of the way many elected officials and the media approach issues of government management -- is based on a dessicated view of human motivation that bears the same relationship to a full account of what makes people tick as a prune does to a plum.

So if contractors do a bad job, let's make it less likely that they get new awards. But if they do a great job, let's make it more likely.

If Congress wanted some useful legislation in this area, they could overrule the unfortunate provision in the FAR that allows contractors to dispute a past performance report card they don't like one step up the agency chain, which is a prime factor discouraging honesty in past performance reports.

Posted by Steve Kelman on Jul 26, 2007 at 12:08 PM


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