Federal Contractors:

Better Performance Information Needed to Support Agency Contract Award Decisions

GAO-09-374: Published: Apr 23, 2009. Publicly Released: May 22, 2009.

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In fiscal year 2007, federal agencies worked with over 160,000 contractors, obligating over $456 billion, to help accomplish federal missions. This reliance on contractors makes it critical that agencies have the information necessary to properly evaluate a contractor's prior history of performance and better inform agencies' contract award decisions. While actions have been taken to improve the sharing of past performance information and its use--including the development of the Past Performance Information Retrieval System (PPIRS)--concerns remain about this information. This report assesses agencies' use of past performance information in awarding contracts; identifies challenges that hinder systematic sharing of past performance information; and describes efforts to improve contractor performance information. In conducting this work, GAO analyzed 62 contract solicitations from fiscal years 2007 and 2008 and met with 121 contracting officials. While the solicitations represent a range of contracts and contractors, GAO's findings cannot be generalized to all federal contracts.

Agencies considered past performance information in evaluating contractors for each of the 62 solicitations GAO reviewed. Generally, factors other than past performance, such as technical approach or cost, were the primary factors for contract award decisions. A majority of officials told us their reluctance to rely more on past performance was due, in part, to their skepticism about the reliability of the information and difficulty assessing relevance to specific acquisitions. Contracting officials agreed that for past performance information to be useful for sharing, it must be documented, relevant, and reliable. However, GAO's review of PPIRS data for fiscal years 2006 and 2007 indicates that only a small percentage of contracts had a documented performance assessment; in particular, we found little contractor performance information for orders against the General Services Administration's (GSA) Multiple Award Schedule. Other performance information that could be useful in award decisions, such as contract terminations for default and subcontract management, was not systematically captured across agencies. Some officials noted that a lack of accountability and lack of system tools and metrics made it difficult for managers to ensure timely performance reports. Variations in evaluation and rating factors have also limited the usefulness of past performance information. Finally, a lack of central oversight and management of PPIRS data has hindered efforts to address these and other shortcomings. Several efforts have been initiated to improve PPIRS, but little progress has been made. In 2005, an interagency work group established several broad goals for improving past performance information, including standardizing performance ratings used by various agencies. However, these goals have yet to be met, and no funding has been dedicated for this purpose. In April 2008, changes to federal regulations were proposed that would clarify past performance documentation requirements and require the use of PPIRS. However, as of February 2009, the proposed changes had not been finalized.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation and recently took steps to implement it. The Office of Federal Procurement Policy in conjunction with the Acquisition Committee for eGovernment determined that the Contractor Performance Assessment Reporting System will be utilized as the single governmentwide past performance reporting system to collect and transmit performance evaluations to the Past Performance Information Retrieval System, thus providing for standardized evaluation factors and rating scales.

    Recommendation: To facilitate governmentwide sharing and use of past performance information, the Administrator of the Office of Federal Procurement Policy (OFPP), in conjunction with agency chief acquisition officers should standardize evaluation factors and rating scales governmentwide for documenting contractor performance.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  2. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation and recently took steps to implement it. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a final rule amending the Federal Acquisition Regulation to establish procedures for contracting officers to provide terminations for cause or default into the Federal Awardee Performance and Integrity Information System. In addition, the Office of Federal Procurement Policy and the Acquisition Committee for eGovernment determined that the Contractor Performance Assessment Reporting System will be utilized as the single governmentwide past performance reporting system to collect contractor performance information, which includes information on the contractor's ability to manage subcontractors.

    Recommendation: To facilitate governmentwide sharing and use of past performance information, the Administrator of the Office of Federal Procurement Policy (OFPP), in conjunction with agency chief acquisition officers should establish policy for documenting performance-related information that is currently not captured systematically across agencies, such as contract terminations for default and a prime contractor's management of its subcontractors.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  3. Status: Closed - Implemented

    Comments: In response to these recommendations, OFPP issued final revisions to the FAR on July 1, 2009 aimed at improving past performance information including: (1) requiring agencies establish procedures for reporting past performance information and identify those responsible for preparing evaluations, and (2) requiring the input of past performance reports electronically into PPIRS. Subsequently, on July 29, 2009, OMB issued a memorandum to all Chief Acquisition Officers and Senior Procurement Officials (a) describing the new FAR requirements, (b) outlining associated management responsibilities and actions that they must take to support improved past performance reporting, and (c) establishing a new review that OFPP will use to further improve past performance reporting. The new review process is supposed to begin in February 2010.

    Recommendation: To facilitate governmentwide sharing and use of past performance information, the Administrator of the Office of Federal Procurement Policy (OFPP), in conjunction with agency chief acquisition officers should specify that agencies are to establish procedures and management controls, to include accountability, for documenting past performance in PPIRS.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  4. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation and recently took steps to implement it. The Office of Federal Procurement Policy has taken on an increased oversight role for past performance information, and recently assessed agency's compliance with the requirement to document contractor performance as well as assessing the quality of past performance narratives. In addition, the Office of Federal Procurement Policy and the Acquisition Committee for eGovernment determined that the Defense Contractor Performance Assessment Reporting System will be utilized as the single governmentwide past performance reporting system. Oversight of this system will be through the General Services Administration's Integrated Acquisition Environment.

    Recommendation: To facilitate governmentwide sharing and use of past performance information, the Administrator of the Office of Federal Procurement Policy (OFPP), in conjunction with agency chief acquisition officers should define governmentwide roles and responsibilities for managing and overseeing PPIRS data.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  5. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation and recently took steps to implement it. The Office of Federal Procurement Policy and the Acquisition Committee for eGovernment determined that the Contractor Performance Assessment Reporting System will be utilized as the single past performance reporting system government-wide to collect contractor performance assessments. This system provides an interface with the Federal Procurement Data System - Next Generation which allows agencies to monitor their reporting for completeness and timeliness.

    Recommendation: To facilitate governmentwide sharing and use of past performance information, the Administrator of the Office of Federal Procurement Policy (OFPP), in conjunction with agency chief acquisition officers should develop system tools and metrics for agencies to use in monitoring and managing the documenting of contractor performance, such as contracts requiring an evaluation and information on delinquent reports.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  6. Status: Closed - Implemented

    Comments: OFPP issued final revisions to the FAR on July 1, 2009 aimed at improving past performance information including requiring performance assessments for orders against Multiple Award Schedule (MAS) and other agencies' contracts that exceed the reporting threshold.

    Recommendation: To facilitate governmentwide sharing and use of past performance information, the Administrator of the Office of Federal Procurement Policy (OFPP), in conjunction with agency chief acquisition officers should take appropriate action to finalize proposed changes to the Federal Aquisition Regulations that clarify responsibilities and performance documentation requirements for contract actions that involve orders placed against GSA's Multiple Award Schedule.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  7. Status: Closed - Implemented

    Comments: In providing comments on this report, the Department concurred with the recommendation and recently took steps to implement it. In July 2009, the Office of Federal Procurement Policy issued a memorandum requiring agencies to establish internal procedures for collecting and reporting past performance information. Subsequently, the Department amended their acquisition manual to emphasize the importance of contractor past performance and initiated oversight processes and procedures to assess contractor performance assessments for timeliness and quality.

    Recommendation: To improve management and accountability for timely documenting of contractor past performance information at the agency level, the departments of Defense, Energy, Homeland Security, and NASA should establish management controls and appropriate management review of past performance evaluations as required and in line with any OFPP policy changes.

    Agency Affected: Department of Homeland Security

  8. Status: Closed - Implemented

    Comments: In providing comments on this report, the Department concurred with the recommendation and recently took steps to implement it. In July 2009, the Office of Federal Procurement Policy issued a memorandum requiring agencies to establish internal procedures for collecting and reporting past performance information. Subsequently, the Department amended their acquisition manual to emphasize the importance of contractor past performance and initiated oversight processes and procedures to assess contractor performance assessments for timeliness and quality.

    Recommendation: To improve management and accountability for timely documenting of contractor past performance information at the agency level, the departments of Defense, Energy, Homeland Security, and NASA should establish management controls and appropriate management review of past performance evaluations as required and in line with any OFPP policy changes.

    Agency Affected: Department of Defense

  9. Status: Closed - Implemented

    Comments: In providing comments on this report, the department concurred with the recommendation and recently took steps to implement it. In July 2009, the Office of Federal Procurement Policy issued a memorandum requiring agencies to establish internal procedures for collecting and reporting past performance information. The Department migrated to the Contractor Performance Assessment Reporting System, which provides reports for managers and focal points to identify and track the status of performance assessments for their respective organization. In addition, the Department's acquisition guide was updated to set forth policy, assign roles and responsibilities, and provide procedures for evaluating contractor performance as required by Office of Federal Procurement Policy memo.

    Recommendation: To improve management and accountability for timely documenting of contractor past performance information at the agency level, the departments of Defense, Energy, Homeland Security, and NASA should establish management controls and appropriate management review of past performance evaluations as required and in line with any OFPP policy changes.

    Agency Affected: Department of Energy

  10. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with the recommendation and recently took steps to implement it. In July 2009, the Office of Federal Procurement Policy issued a memorandum requiring agencies to establish internal procedures for collecting and reporting past performance information. The Agency subsequently issued a Procurement Information Circular providing updated guidance for the use of NASA's Past Performance Database and establish more uniform Agency-wide compliance with the requirements set forth in the Office of Federal Procurement Policy memorandum. In addition, NASA established procedures to provide e-mail notifications to managers and supervisors for late or missing past performance evaluations.

    Recommendation: To improve management and accountability for timely documenting of contractor past performance information at the agency level, the departments of Defense, Energy, Homeland Security, and NASA should establish management controls and appropriate management review of past performance evaluations as required and in line with any OFPP policy changes.

    Agency Affected: National Aeronautics and Space Administration

 

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