By Steve Kelman

Blog archive

Good advice on past-performance from Wartime Contracting Commission

 I've had many chances now, in print and in talks to government audiences, to express a mea culpa about a provision I agreed to while I was administrator of the Office of Federal Procurement Policy back in the 1990s. It was 1994, and the government was embarking on efforts to make considerations of vendor past performance an important part of how we award contracts in government.

Members of my staff were concerned about the delicate status of the whole effort to have past performance considered, given worries that it was too "subjective" and might, God forbid, result in "favoring" incumbent contractors who had done a good job. So I agreed to regulatory language (FAR 42.1503b) as part of the regulatory changes to incorporate past-performance data into the procurement system that allowed a contractor dissatisfied with their past-performance rating to appeal and ask for a better one.

I worried at the time that this was a mistake that would chill honest ratings, and my worries have turned out to be justified. Now the Commission on Wartime Contracting in Iraq and Afghanistan has recommended, in their second interim report to Congress, that this regulatory provision be eliminated, at least for contingency contracting. (This proposal should be extended to all contracting, in my view, not just contingency contracting.)

The current regulatory provision is a central cause of the failure of the past performance reforms to achieve their promise as a driver of performance improvement in contracting. Front-line staff members rightly conclude that negative comments constitute an invitation to spend hundreds of hours defending their judgments, so they skip the hassle.

This produces a lack of variance in report card grades, leading to a situation where past performance is seldom a differentiator in source selection decision. If a contractor doesn't like their report card grade, they should be able to put their version of events in the contract file (and the past performance database), but not appeal.

If the failure cycle -- of lack of variance in reports producing a failure of past performance to be a differentiator often enough in source selection, producing even poorer-quality reports --  is not broken, past performance as a technique for improving contractor performance will lose all impact. Thus, breaking the cycle is a matter of urgent concern. The time is ripe for a major effort to revitalize the system, learning lessons from 15 years of experience.

Changing the regulatory language -- and not just for contingency contracting -- is a crucial step in the past performance revitalization effort that Dan Gordon is pursuing at the Office of Federal Procurement Policy. I have raised this issue with Dan in the past, and he told me I was the only person asking for this change. Now I have company. Time to move.

Posted on Apr 20, 2011 at 12:09 PM


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