Contractors Getting Shortchanged on Past Performance Ratings

The purpose of Performance Assessment Reports (PARs) is to provide source selection officials with information on contractor past performance. Government officials prepare PARs in CPARS (Contractor Performance Assessment Reporting System). Most Government contractors are familiar with PARs/CPARS, having had the opportunity to review and respond to performance information loaded up on Government databases.

The DoD, Office of Inspector General (IG) recently published its capstone report on DoD compliance with PAR regulations. Over a number of years, it reviewed 238 PARs prepared by Army, Navy, Air Force and Defense organizations. While the IG found that officials generally registered (or had valid reasons for not registering) contracts and prepared corresponding PARs, they did not consistently comply with preparation requirements. Besides the fact that a third of them were prepared an average of 73 days late, 200 of the 238 PARS were deficient in terms of complying with FAR regulations and the CPARS Guide. Specifically, DoD officials did not:

• prepare written narratives sufficient to justify the ratings given
• rate required evaluation factors, and
• prepare sufficient contract effort descriptions.

The IG found reasons for these deficiencies. They included

• assessors were not adequately trained and organizations lacked effective procedures for timeliness and reviews of the PARs (there it is, the "more training" recommendation - you see this in every IG report)
• there was a lack of internal controls within CPARS - no system requirement to write a narrative and insufficient explanations for the different ratings,
• the CPARS guide did not contain sufficient information related to the utilization of small business.

Now the big "so what". Why should contractor's care about these deficiencies? Well, without access to timely, accurate, and complete past performance assessment information, contracting officers will not have past performance information needed to make informed decisions related to contract awards. This could work against contractors whose good work on prior contracts are not considered in the selection process. We would also suggest that it could work against the Government as well if past poor performance was not documented.

As recommendations, the IG recommended more guidance, more training, and enhancements to CPARS that will require written narrative along with other information.

You can read the entire IG report here.

Past Performance Ratings - Government is Improving its Compliance Rate

Performance information (adjectival ratings and supporting narratives) about contractors' work on previously awarded contracts is used by the Government for future source selection purposes. The "Past Performance Assessments" cover such  aspects as

• conforming to requirements and to standards of good workmanship
• forecasting or controlling costs
• adherence to schedules, including the administrative aspects of performance
• reasonable and cooperative behavior and commitment to customer satisfaction
• reporting into databases and reporting requirements in the solicitation provisions and clauses referenced
• integrity and business ethics, and
• business-like concern for the interest of the customer.

It is federal procurement policy for the contracting officer to prepare past performance appraisals at least annually and also, at the end of the contract (see FAR 42.1502). These assessments are posted to CPARS (Contractor Performance Assessment Reporting System) and are then available for just about anyone working in Government procurement to lookup and review.

For contractors, it is important that past performance data be prepared timely and made available for contractor selection and award purposes - especially for ratings of "exceptional" or "very good". Exceptional means that performance meets contractual requirements and exceeds many to the Government's benefit. Its good to go the extra mile and get noticed. The Government relies on this information to make best value source selection decisions.

The Government monitors contracting officer compliance with the Past Performance reporting requirements. The Department of Defense recently published departmental compliance statistics that show a compliance rate of 83 percent for the fourth quarter of Fiscal Year 2015 against a goal of 100 percent. Although slightly improving from the previous quarter, there is still need for improvement.

Contractors usually benefit by having past performance ratings on file. Contractors that don't receive them, should ask their contracting officers to prepare them.

You can read DoD's latest summary here.

Contractor Performance Assessment Reporting (CPARS)

In the process of selecting contractors, the FAR (Federal Acquisition Regulations) require agencies to consider past performance as a factor in competitive procurements exceeding the simplified acquisition threshold (currently $150 thousand). That makes sense. Why would the Government want to award contracts to companies that don't perform? Contracting officers have more work than they can do right now - why add to the burden with contracting issues that just chew up time. Of course, to be in a position to "consider" past performance, contracting officers need relevant past performance data. FAR provides for that by requiring agencies to evaluate contractor performance at least yearly and also, at the time the work is completed. That requirement is well and good but years ago, the GAO found that very few agencies were bothering to write up past performance reports and even those few that were written up, were dropped off in some dead letter office never to be seen again.

In 2004, the DoD developed and began using CPARS (Contractor Performance Assessment Reporting System) and by 2010, all Government agencies were tied into the system. In theory, a contracting officer from NASA could review past performance data from a prospective contractor who worked for DoD or Energy, or any other agency. The centralized database was a good idea, however several GAO (Government Accountability Office) reviews determined that there was still a low compliance rate in writing up past performance information and therefore, incomplete past performance information loaded up into the CPARS.

The 2013 NDAA (National Defense Authorization Act) included a requirement to develop a strategy to ensure that evaluations in past performance databases. In response to this requirement, the Government established some strategies to improve compliance including (i) increase emphasis through memos to agency officials, (ii) self-assessing compliance, (iii) more training, (iv) setting performance targets, and (v) developing content guidelines. The last strategy was considered high risk because with the increased emphasis on past performance evaluations and the push on contracting officers to complete them, the quality of those evaluations suffered considerably. Some evaluations were simply check boxes where contractors were rated highly and no narrative accompanied the score. Some contracting officers simply doled out the highest score possible because (i) they either had no information to the contrary or (ii) they didn't want to deal with the inevitable contractor disagreement process that would ensue for any evaluation less than perfect.

Last week, the GAO issued a report that assessed agency compliance with the CPARS reporting requirement. Notably, the study did not assess the completeness, timeliness, or accuracy of those evaluations - only whether the evaluations were uploaded into CPARS. Overall, Government agencies are making improvements in complying with the past performance requirements. Overall, the compliance rate for the year ended April 2014 was 49 percent. Although not great, it represents a significant increase over the 32 percent from the previous year. DoD is doing the best at 83 percent compliance. GSA had the lowest compliance rate at 13 percent.

You can read the entire GAO report here.