Federal Contractors
Better Performance Information Needed to Support Agency Contract Award Decisions Gao ID: GAO-09-374 April 23, 2009In 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.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-374, Federal Contractors: Better Performance Information Needed to Support Agency Contract Award Decisions
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
April 2009:
Federal Contractors:
Better Performance Information Needed to Support Agency Contract Award
Decisions:
GAO-09-374:
GAO Highlights:
Highlights of GAO-09-374, a report to congressional requesters.
Why GAO Did This Study:
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.
What GAO Found:
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 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.
Table: Estimated Contracts Requiring an Assessment That Had an
Assessment in Fiscal Year 2007:
Department/agency: Air Force;
Estimated contracts requiring an assessment: 2,795;
Contracts with an assessment: 1,300; Percent: 47.
Department/agency: Navy;
Estimated contracts requiring an assessment: 3,879;
Contracts with an assessment: 1,622; Percent: 42.
Department/agency: Army;
Estimated contracts requiring an assessment: 6,145;
Contracts with an assessment: 1,971; Percent: 32.
Department/agency: Other DOD;
Estimated contracts requiring an assessment: 1,408;
Contracts with an assessment: 303;
Percent: 22.
Department/agency: Homeland Security;
Estimated contracts requiring an assessment: 4,131;
Contracts with an assessment: 535;
Percent: 13.
Department/agency: NASA;
Estimated contracts requiring an assessment: 3,706;
Contracts with an assessment: 1,093; Percent: 29.
Department/agency: Energy;
Estimated contracts requiring an assessment: 840;
Contracts with an assessment: 183;
Percent: 22.
Total percentage:
Estimated contracts requiring an assessment: 22,904;
Contracts with an assessment: 7,007; Percent: 31.
Source: GAO analysis of data from DOD, FPDS-NG, and PPIRS.
[End of table]
What GAO Recommends:
GAO is making recommendations to the Office of Federal Procurement
Policy and selected agencies aimed at facilitating sharing and use of
past performance information. All agencies agreed with the
recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-09-374] or key
components. For more information, contact Anne-Marie Lasowski at (202)
512-4146 or lasowskia@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Factors Other Than Past Performance Generally Drive Contract Award
Decisions:
Challenges Hinder Systematic, Governmentwide Sharing of Past
Performance Information:
Efforts to Improve PPIRS and the Sharing of Performance Information
Have Made Little Progress:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Information on Selected Contracts:
Appendix III: Comments from the Department of Defense:
Appendix IV: Comments from the Department of Energy:
Appendix V: Comments from the Department of Homeland Security:
Appendix VI: Comments from the General Services Administration:
Appendix VII: Comments from the National Aeronautics and Space
Administration:
Appendix VIII: GAO Contact and Acknowledgments:
Tables:
Table 1: Federal Contract Obligations and Contractors for Selected
Agencies, Fiscal Year 2007:
Table 2: Number and Percentage of Contractors That Support DOD and
Other Agencies, Fiscal Year 2007:
Table 3: Estimated Contracts Requiring an Assessment and Number of
Assessments in PPIRS for Selected Agencies, Fiscal Years 2006 and 2007:
Table 4: Comparison of Contractor Past Performance Systems Rating
Factors:
Abbreviations:
CPARS: Contractor Performance Assessment Reporting System:
CPS: Contractor Performance System:
DHS: Department of Homeland Security:
DOD: Department of Defense:
DODIG: Department of Defense Inspector General:
DOE: Department of Energy:
FAR: Federal Acquisition Regulation:
FPDS-NG: Federal Procurement Data System-Next Generation:
GSA: General Services Administration:
MAS: Multiple Award Schedule:
NASA: National Aeronautics and Space Administration:
OFPP: Office of Federal Procurement Policy:
PPDB: Past Performance Database:
PPIRS: Past Performance Information Retrieval System:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
April 23, 2009:
The Honorable Henry Waxman:
Chairman:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Edolphus Towns:
Chairman:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Dennis Cardoza:
House of Representatives:
Each year, federal agencies hire thousands of contractors to help
accomplish their missions. In fiscal year 2007 alone, federal agencies
worked with over 160,000 contractors, obligating over $456 billion.
Contractors are involved in a broad array of activities, from basic
functions, such as landscaping and janitorial services, to more complex
functions, like acquisition support and security services. These
contractors often employ subcontractors to help them meet contract
requirements. This reliance on contractors makes it critical that
federal agencies have the information necessary to properly evaluate a
contractor's prior history of performance and better inform agencies'
contract award decisions.
To facilitate the sharing of such information, the Office of Federal
Procurement Policy (OFPP) created the Past Performance Information
Retrieval System (PPIRS)--a system intended to be a repository of
performance information on federal contractors. However, more than 5
years after the implementation of PPIRS in July 2002, questions have
been raised about how well federal agencies are documenting and sharing
information on contractor past performance. Specifically, you have
noted that agencies were renewing or awarding contracts to contractors
with questionable performance records. Consequently, you asked us to
review several issues related to the use of past performance
information. In response to your request, we (1) assessed agencies' use
of information on contractors' past performances in awarding contracts;
(2) identified challenges that hinder systematic, governmentwide
sharing of past performance information; and (3) described efforts
under way or planned to improve the sharing of information on
contractor performance.
To conduct our work, we reviewed and analyzed the Federal Acquisition
Regulation (FAR) and OFPP guidance on the use of past performance
information. We also reviewed guidance from the Department of Defense
(DOD), Department of Energy (DOE), Department of Homeland Security
(DHS), National Aeronautics and Space Administration (NASA), and the
General Services Administration (GSA). We discussed this guidance and a
broad range of issues related to how agencies use past performance
information with 121 contracting officials at 11 buying offices that
represented a range of acquisition activities. Further, we selected and
analyzed 62 contract files from fiscal years 2007 and 2008--focusing on
how buying offices considered past performance information relative to
other evaluation factors. We selected contracts that represent a range
of products and services, types of contracts, contract dollar values,
and contractors across the government, but our findings cannot be
generalized to all federal contracts. We also analyzed data in PPIRS,
past performance information that agencies feed into PPIRS, the
evaluation factors and rating scales used in the system, and met with
agency officials who administer the system. We conducted this
performance audit from February 2008 to February 2009 in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives. See appendix I for a more detailed
discussion of our scope and methodology.
Results in Brief:
Agencies have broad discretion in determining how to use past
performance information in selecting contractors, including the
importance they place on this information relative to factors other
than cost or price. For the 62 solicitations we reviewed that required
an evaluation of past performance, the ranking of past performance as
an evaluation factor relative to other non-cost factors varied. In most
of the solicitations, the company's technical approach to work was the
non-cost factor ranked most important, but for 38 percent of these
contracts, past performance was ranked as the most important or tied
for most important non-cost factor. Contracting officials who viewed
past performance as an important evaluation factor noted that basing
contract award decisions, in part, on past performance encourages
companies to achieve better acquisition outcomes over the long term.
Though agencies considered past performance information in evaluating
proposals, many of the officials we spoke with noted that past
performance rarely determined their contract award decisions.
Generally, officials relied on technical approach or cost as the
primary deciding factors, when awarding the contract. Officials cited
several reasons for not relying more on past performance information
that included an overall lack of confidence in the objectivity of past
performance information and challenges in assessing its relevance
specific to the contract award. Contracting officials obtained past
performance information from multiple sources, such as questionnaires
completed by other government contracting officials and interviews with
other agency contacts. Most officials we spoke with also used PPIRS as
a source of information, but cited the absence of information in PPIRS
as one reason for typically relying on other sources. Overall,
contracting officials told us that for past performance information to
be meaningful in contract award decisions, it must be documented,
relevant, and reliable.
Several challenges hinder capturing adequate performance information
for governmentwide sharing. First, agencies do not always assess and
document contractor performance for contracts above a certain monetary
threshold, as required by the FAR. Our 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 task or delivery orders placed
against GSA's Multiple Award Schedule (MAS). Second, other performance
information that could be useful in making award decisions, such as
contract terminations for default and management of subcontracts, was
not systematically documented across agencies. Third, some officials
noted a lack of priority on documenting performance assessments and a
lack of available system tools and metrics that managers needed to
oversee the timely documenting of past performance evaluations. Fourth,
a lack of standardized evaluation factors and rating scales in the
systems used to collect past performance information did not allow for
aggregate level measures of how contractors were performing---limiting
the usefulness of the system. Finally, a lack of central oversight and
management of PPIRS has hindered efforts to address shortcomings with
the past performance systems.
Several efforts have been initiated to improve PPIRS and provide
pertinent and timely performance information, but little progress has
been made. In 2005, OFPP--which has the authority to guide federal
agencies in establishing standards for evaluating past performance and
collecting and maintaining the information--established through an
interagency work group several broad goals for improving past
performance information. These goals included standardizing the ratings
used to assess contractor performance and developing a centralized
questionnaire system for governmentwide use. However, more than 3 years
later, these goals have yet to be met and no funding has been dedicated
for this purpose. In April 2008, FAR changes were proposed to clarify
past performance documentation requirements, including mandating the
use of PPIRS and requiring agencies to identify individuals responsible
for preparing contractor performance assessments. The comment period on
these proposals ended in June 2008, but the changes had not been
finalized as of February 2009.
We make several recommendations to OFPP aimed at improving
governmentwide sharing and use of past performance information in
contract award decisions. We also recommend that the agencies included
in our review establish management controls and appropriate management
review of past performance evaluations to improve management and
accountability for documenting contractor past performance information.
OFPP and the agencies agreed with our recommendations. In addition,
most of these agencies outlined plans or actions to implement our
recommendation on management controls and reviews of past performance.
DHS took issue with the data presented regarding estimated contracts
requiring a performance assessment stating that the numbers were
possibly misleading in how they compared to other agencies. Moreover,
DHS provided its own data and requested that we revise ours. We applied
the same methodology to DHS as we applied to all civilian agencies and
found no basis for the revised numbers provided by DHS. Therefore, we
stand by our methodology and data. Nevertheless, DHS agreed with the
larger issue that significant strides need to be made in documenting
required performance assessments.
Background:
The federal government relies heavily on contractors to provide a range
of goods and services. In fiscal year 2007, about 160,000 contractors
provided support to federal agencies. A large portion of these
contractors was concentrated in five agencies: DOD, DHS, DOE, NASA, and
GSA. Among these five agencies, DOD accounts for 72 percent of all
contract obligations across about 77,000 contractors in fiscal year
2007 (see table 1).
Table 1: Federal Contract Obligations and Contractors for Selected
Agencies, Fiscal Year 2007:
Department/agency: DOD;
Contract obligations ($billions): $330.9;
Percentage of total awarded dollars: 72.4;
Number of contractors: 76,900.
Department/agency: Homeland Security;
Contract obligations ($billions): 11.8;
Percentage of total awarded dollars: 2.6;
Number of contractors: 13,200.
Department/agency: NASA;
Contract obligations ($billions): 12.8;
Percentage of total awarded dollars: 2.8;
Number of contractors: 2,600.
Department/agency: Energy;
Contract obligations ($billions): 22.9;
Percentage of total awarded dollars: 5.0;
Number of contractors: 2,400.
Department/agency: General Services Administration;
Contract obligations ($billions): 12.3;
Percentage of total awarded dollars: 2.7;
Number of contractors: 14,800.
Source: USASpending.gov contract data as of December 15, 2008.
[End of table]
These five agencies often rely on the same contractors. Table 2 shows
the number and percentage of contractors DHS, NASA, DOE, and GSA had in
common with DOD in fiscal year 2007.
Table 2: Number and Percentage of Contractors That Support DOD and
Other Agencies, Fiscal Year 2007:
Department/Agency: Department of Defense;
Number of contractors[A]: 76,900.
Department/Agency: Department of Homeland Security;
Number of contractors[A]: 13,200;
Number in common with DOD: 6,200;
Percentage in common with DOD: 47.
Department/Agency: National Aeronautics and Space Administration;
Number of contractors[A]: 2,600;
Number in common with DOD: 1,700;
Percentage in common with DOD: 65.
Department/Agency: Department of Energy;
Number of contractors[A]: 2,400;
Number in common with DOD: 1,300;
Percentage in common with DOD: 54.
Department/Agency: General Services Administration;
Number of contractors[A]: 14,800;
Number in common with DOD: 4,800;
Percentage in common with DOD: 32.
Source: GAO analysis of data from USASpending.gov contract data as of
December 15, 2008.
[A] USASpending.gov utilizes data from the Federal Procurement Data
System-Next Generation (FPDS-NG) and aggregates subsidiaries and
divisions by parent company using information provided by Dun and
Bradstreet.
[End of table]
The FAR requires agencies to consider past performance information as
an evaluation factor in certain negotiated competitive procurements
[Footnote 1]--along with other evaluation factors such as price,
management capability, and technical excellence.[Footnote 2] Contractor
past performance information may include the contractor's:
* record of conforming to contract requirements and to standards of
good workmanship;
* record of forecasting and controlling costs;
* adherence to contract schedules; and:
* history of reasonable and cooperative behavior and commitment to
customer satisfaction.[Footnote 3]
Although the FAR requires officials in selecting contractors to
consider past performance as an evaluation factor in certain negotiated
procurements, agencies have broad discretion in deciding its importance
relative to other factors in the evaluation scheme. Agencies determine
which of the contractor's past contracts are similar to the contract to
be awarded in terms of size, scope, complexity, or contract type and
the relative importance of past performance. For procurements with
clearly defined requirements and minimal risk of unsuccessful contract
performance, cost or price may play a more important role than past
performance in selecting contractors. For procurements with less
clearly defined requirements and a higher risk of unsuccessful contract
performance, it may be in the government's best interest to consider
past performance, technical capability, and other factors as more
important than cost or price. The FAR requires that solicitations
disclose the evaluation factors that will be used in selecting a
contractor and their relative importance.[Footnote 4] In evaluating
past performance information, agencies must consider, among other
things, the 1) currency and relevancy, 2) source and context, and 3)
general trends in the contractor's performance. The solicitation must
also describe how offerors with no performance history will be
evaluated.[Footnote 5]
Once a contract is awarded, the government should monitor a
contractor's performance throughout the performance period.
Surveillance includes oversight of a contractor's work to provide
assurance that the contractor is providing timely and quality goods or
services and to help mitigate any contractor performance problems. An
agency's monitoring of a contractor's performance may serve as a basis
for past performance evaluations. The FAR requires agencies to prepare
an evaluation of contractor performance for each contract that exceeds
the simplified acquisition threshold at the time the work is completed
and gives agencies discretion to include interim evaluations for
contracts with a performance period exceeding one year.[Footnote 6] The
DOD has generally higher thresholds based on business sectors.[Footnote
7]
A number of systems across the government are used to capture
contractor performance information, which is eventually passed on to
PPIRS. DOD maintains three systems for its military departments and
agencies--Architect-Engineer Contract Administration Support System
(ACASS), Construction Contractor Appraisal Support System (CCASS), and
Contractor Performance Assessment Reporting System (CPARS). NASA has
its own system, the Past Performance Database (PPDB). DHS and DOE are
transitioning to using DOD's CPARS.[Footnote 8] Other civilian
departments use the Contractor Performance System (CPS) managed by the
National Institutes of Health. Effective July 1, 2002, all federal
contractor past performance information currently captured through
these disparate systems was to be centrally available for use by all
federal agency contracting officials through PPIRS--a Web-enabled,
governmentwide application for consolidating federal contractor
performance information.[Footnote 9]
Since its implementation, concerns have been raised about the
completeness of the information in PPIRS. In February 2008, a DOD
Inspector General report noted that the information in CPARS, which
feeds information into PPIRS, was incomplete and questioned whether or
not acquisition officials had access to all the information they needed
to make business decisions.[Footnote 10] Specifically, in reviewing
performance assessment reports in CPARS, the Inspector General reported
that for DOD contracts valued at more than $5 million, 82 percent did
not contain detailed narratives sufficient to establish that ratings
were credible and justifiable; 68 percent had performance reports that
were overdue; and 39 percent were registered more than a year late. In
addition, the report identified material internal control weaknesses in
the Air Force, Army, and Navy procedures for documenting and reporting
contractor performance information.[Footnote 11]
Factors Other Than Past Performance Generally Drive Contract Award
Decisions:
Agencies considered past performance information in evaluating
contractors for the contract solicitations we reviewed, but many of the
officials we spoke with noted that past performance rarely, if ever,
was the deciding factor in their contract award decisions. Their
reluctance to base award decisions on past performance was due, in
part, to their skepticism about the comprehensiveness and reliability
[Footnote 12] of past performance information and difficulty assessing
its relevance to specific acquisitions.
For the 62 contract solicitations we reviewed, the ranking of past
performance as an evaluation factor relative to other non-cost factors
varied. The company's technical approach was the non-cost factor
considered most important for most solicitations. Past performance as
an evaluation factor was ranked first in order of importance in about
38 percent of solicitations (appendix I provides more details on the
methodology for selecting and reviewing contract solicitations).
Contracting officials who viewed past performance as an important
evaluation factor noted that basing contract award decisions, in part,
on past performance encourages companies to achieve better acquisition
outcomes over the long term. For example, according to officials at one
Air Force location, an incumbent contractor was not awarded a follow-on
contract worth over $1 billion primarily because of poor performance on
the prior contract. As a result, the contractor implemented several
management and procedural changes to improve its performance on future
contracts.
Despite the fact that past performance was an evaluation factor in all
the solicitations we reviewed, over 60 percent of the contracting
officers we talked with stated that past performance is rarely or never
a deciding factor in selecting a contractor. Many contracting officers
stated they preferred to rely on other more objective factors such as
technical approach or price. Officials cited several reasons for their
reluctance to rely more on past performance in making award decisions
including difficulty obtaining objective and candid past performance
information. For example, over half of the contracting managers
[Footnote 13] we met with noted that officials who are assessing a
contractor's performance have difficulty separating problems caused by
the contractor from those caused by the government, such as changing or
poorly defined government requirements. Fear of damaging contractor
relations may also influence assessments of contractor performance,
particularly in areas where there are a limited number of contractors
that can provide a particular good or service. Some contracting
officials told us there may also be a tendency to "water down"
assessments if they perceive a contractor may contest a negative
rating.[Footnote 14] Contracting officials also cited other challenges
for not relying more on past performance information including 1)
difficulty assessing relevance to the specific acquisition or offerors
with no relevant past performance information, 2) lack of documented
examples of past performance, and 3) lack of adequate time to identify,
obtain, and analyze past performance information.
Contracting officials often rely on multiple sources of past
performance information. Most officials told us they found information
from the prospective contractor's prior government or industry customer
references--gathered through interviews or questionnaires--as the most
useful source of past performance information.[Footnote 15] Moreover,
several contracting officials noted that they use questionnaires to
obtain past performance information on major subcontractors. Officials
noted, however, that questionnaires are time-consuming and the
performance information collected through them is not shared
governmentwide. Other sources of past performance information include
informal contacts such as from other contracting officers who have
dealt with the contractor in the past. Most contracting officials we
spoke with also used PPIRS, but cited the absence of information in
PPIRS as one reason for typically relying on other sources along with
challenges in ascertaining information that was relevant to the
specific acquisitions. Several contracting officials stated a
governmentwide system like PPIRS, if populated, could reduce the time
and effort to collect past performance information for use in selecting
contractors. Regardless of the source used, contracting officials
agreed that for past performance information to be meaningful in
contract award decisions, it must be documented, relevant, and
reliable.
Challenges Hinder Systematic, Governmentwide Sharing of Past
Performance Information:
Our review of PPIRS data for fiscal years 2006 and 2007 found
relatively little past performance information available for sharing
and potential use in contract award decisions. One reason is that
agencies are not documenting contractor performance information that
feeds into PPIRS to include, in some cases, contract actions involving
task or delivery orders placed against GSA's MAS. Other information
that could provide key insights into a contractor's performance, such
as information on contract terminations for default and a prime
contractor's management of subcontractors, was also not systematically
documented. Contracting managers also lack tools and metrics to monitor
the completeness of past performance data in the systems agencies use
to record past performance information. Further, the lack of
standardized evaluation factors and rating scales in the systems that
collect past performance information has limited the system's
usefulness in providing an aggregate level picture of how contractors
are performing. Finally, lack of central oversight of PPIRS has
undermined efforts to capture adequate past performance information.
Agencies Are Generally Not Documenting Contractor Performance As
Required:
The FAR requires[Footnote 16] agencies to prepare an evaluation of
contractor performance for each contract that exceeds the simplified
acquisition threshold ($100,000 in most cases) when the contract work
is completed. While the FAR definition of a contract[Footnote 17] can
be read to include orders placed against GSA's Multiple Award Schedule
(MAS),[Footnote 18] the FAR does not specifically state whether this
requirement applies to contracts or task or delivery order contracts
awarded by another agency.[Footnote 19] While DOD and many agencies we
reviewed have issued supplemental guidance reiterating the FAR
requirement to evaluate and document contractor performance[Footnote
20]--information that ultimately should be fed into PPIRS--the agencies
generally did not comply with the requirement.
We estimated that the number of contracts that required a performance
assessment in fiscal year 2007 for agencies we reviewed would have
totaled about 23,000. For the same period, we found about 7,000
assessments in PPIRS--about 31 percent of those contracts requiring an
assessment (see table 3).[Footnote 21] About 75 percent of all past
performance reports in PPIRS were from DOD, with the Air Force
accounting for the highest percent of completed assessments; however,
there were relatively few for some military services--a finding
consistent with the DOD IG's February 2008 report.[Footnote 22] For the
civilian agencies we reviewed, there were relatively few performance
reports in PPIRS compared to the number we estimated. For example, for
fiscal year 2007, an estimated 13 percent of DHS contracts that would
potentially require a performance assessment were documented in PPIRS.
Table 3: Estimated Contracts Requiring an Assessment and Number of
Assessments in PPIRS for Selected Agencies, Fiscal Years 2006 and 2007:
Department/Agency: Air Force;
Estimated contracts requiring an assessment 2006: 2,563;
Contracts with assessment 2006: 1,432;
Estimated percent: 56;
Estimated contracts requiring an assessment 2007: 2,795;
Contracts with assessment 2007: 1,300;
Estimated percent: 47.
Department/Agency: Navy;
Estimated contracts requiring an assessment 2006: 3,985;
Contracts with assessment 2006: 1,833;
Estimated percent: 46;
Estimated contracts requiring an assessment 2007: 3,879;
Contracts with assessment 2007: 1,622;
Estimated percent: 42.
Department/Agency: Army;
Estimated contracts requiring an assessment 2006: 6,595;
Contracts with assessment 2006: 2,606;
Estimated percent: 40;
Estimated contracts requiring an assessment 2007: 6,145;
Contracts with assessment 2007: 1,971;
Estimated percent: 32.
Department/Agency: Other DOD;
Estimated contracts requiring an assessment 2006: 1,601;
Contracts with assessment 2006: 330;
Estimated percent: 21;
Estimated contracts requiring an assessment 2007: 1,408;
Contracts with assessment 2007: 303;
Estimated percent: 22.
Department/Agency: Homeland Security;
Estimated contracts requiring an assessment 2006: 4,487;
Contracts with assessment 2006: 324;
Estimated percent: 7;
Estimated contracts requiring an assessment 2007: 4,131;
Contracts with assessment 2007: 535;
Estimated percent: 13.
Department/Agency: NASA;
Estimated contracts requiring an assessment 2006: 4,285;
Contracts with assessment 2006: 1,009;
Estimated percent: 24;
Estimated contracts requiring an assessment 2007: 3,706;
Contracts with assessment 2007: 1,093;
Estimated percent: 29.
Department/Agency: Energy;
Estimated contracts requiring an assessment 2006: 893;
Contracts with assessment 2006: 136;
Estimated percent: 15;
Estimated contracts requiring an assessment 2007: 840;
Contracts with assessment 2007: 183;
Estimated percent: 22.
Department/Agency: Total;
Estimated contracts requiring an assessment 2006: 24,409;
Contracts with assessment 2006: 7,670;
Estimated percent: 31;
Estimated contracts requiring an assessment 2007: 22,904;
Contracts with assessment 2007: 7,007;
Estimated percent: 31.
Source: For DOD: data from CPARS program office. For civilian agencies:
GAO analysis of FPDS-NG and PPIRS data.
Note: Estimated contracts requiring an assessment for civilian agencies
include definitive contracts (defined in the FPDS User's Manual as
contractual vehicles that cannot have orders placed against them) and
indefinite delivery base contracts with orders that exceeded the
reporting thresholds during each fiscal year. Data provided by DOD on
the estimated contracts requiring an assessment also counted base
contracts with total orders exceeding DOD's reporting thresholds, which
are generally higher than $100,000 based on business sector as
previously noted. These estimates are conservative since they do not
include individual orders issued by these agencies that exceed the
required reporting thresholds. For additional information, see
"Appendix I: Scope and Methodology."
[End of table]
For specific types of contract actions, such as task and delivery
orders placed against GSA's MAS, we found little contractor performance
information in PPIRS. Between fiscal years 1998 and 2008, purchases
made against MAS have grown from over $7 billion to $37 billion.
Similarly, the number of MAS contracts has increased from 5,200 in the
mid-1990s to 18,000 in fiscal year 2008. Despite this significant
growth, the number of performance reports in PPIRS for orders placed
against MAS contracts is minimal. For example, about 5 percent of the
DHS orders and none of NASA's were assessed in fiscal year 2007.
Contracting officials we spoke with confirmed that these assessments
were generally not being done; some told us that they believed GSA was
collecting this information. According to GSA officials, however,
agencies are responsible for documenting and reporting MAS contractor
performance, and GSA does not generally request feedback on performance
for MAS contractors. Without this information, GSA is in no position to
know how a contractor is performing when deciding whether or not to
continue doing business with that contractor.
Other Information for Insight into a Contractor's Past Performance Is
Not Systematically Documented:
Currently, there is no governmentwide requirement for agencies to
document in PPIRS when a contract has been terminated because the
contractor defaulted on the terms of the contract. Consequently,
contracting officers may not have access to all information on a
contractor's past performance that could factor into a contract award
decision.[Footnote 23] The recent awarding of contracts to defaulted
contractors highlights the need for information on contract
terminations when making contracting decisions. For example, a $280-
million Army munitions contract was awarded to a contractor that had
previously been terminated for default on several different contracts.
The contracting officer told us that this information, if available,
would have factored into the contract award decision. Subsequently,
this same contractor defaulted under that contract. Similarly, an
October 2008 report issued by the Office of the Special Inspector
General for Iraq Reconstruction documented that at least eight
contractors that had one or more of their projects terminated for
default received new contracts and purchase orders.[Footnote 24] As
part of this audit, the office examined whether the agencies had
evaluated the contractors' prior performance before awarding contracts
and whether they had considered suspending or debarring the poor
performing contractors. Although the report found that the awards to
defaulted contractors were within the authority provided by the FAR, it
raised questions about the degree to which the contractors' prior
performance was considered. In June 2008, the FAR Council opened a case
to address termination for default reporting.[Footnote 25] In addition,
DOD issued policy in July 2008 on the need for departmentwide
centralized knowledge of all contracts that have been terminated
regardless of dollar amount.[Footnote 26]
At the subcontractor level, apart from evaluating a prime contractor's
management of its subcontractors, historically, the federal government
has had limited visibility into subcontractor performance despite the
increased use in subcontractors. In January 2008, we reported that
total subcontract awards from DOD contracts had increased by 27 percent
over a 4-year period--from $86.5 billion in fiscal year 2002 to $109.5
billion in fiscal year 2006.[Footnote 27] As we reported, federal
contractors must manage contract performance, including planning and
administering subcontracts as necessary, to ensure the lowest overall
cost and minimize technical risk to the government. The FAR provides
that the agency's past performance evaluation should take into account
past performance information regarding a prospective contractor's
subcontractors that will perform major or critical aspects of a
requirement when such information is relevant to an acquisition.
[Footnote 28]
Agency contracting officials informed us that they do not assess the
performance of these subcontractors. Rather, if they collect any
information, it is in their assessments of the prime contractor's
subcontract management. However, not all collection systems used by
agencies allow for systematic capturing of subcontract management
information, if it was applicable in a procurement. DOD's CPARS system
has a separate rating factor for subcontract management for systems
contracts whereas systems used by NASA and other civilian agencies do
not have a separate factor. DOD guidance states assessments must not be
done on subcontractors, but CPARS allows the assessing official to
address the prime contractor's ability to manage and coordinate
subcontractor efforts. Beyond this information on subcontractors, no
additional information is routinely collected on subcontractors.
In addition, the FAR was recently revised to explain that information
on contractor ethics can be considered past performance information.
The FAR now states that a contractor's history of reasonable and
cooperative behavior and commitment to customer satisfaction may be
considered part of a contractor's past performance.[Footnote 29] This
type of data is not currently being systematically captured and
documented for use in contract award decisions.
Lack of Priority and Accountability for Past Performance Hinders the
Assessment Process:
Several contracting officials acknowledged that documenting contractor
performance was generally not a priority, and less than half of the
contracting managers we talked with tracked performance assessment
completeness. Some agency officials we spoke with said that a lack of
readily accessible system tools and metrics on completeness has made it
difficult to manage the assessment process. CPARS and CPS--assessment
reporting systems used by DOD and DHS--do not have readily accessible
system tools and metrics on completeness for managers to track
compliance. According to officials who manage CPARS, a team is
developing requirements for system tools and metrics but has been
challenged to develop useful measures because of a lack of complete and
reliable contract information from FPDS. OFPP officials similarly
acknowledged there was a lack of tools and metrics for agency
contracting officials to monitor and manage the process of documenting
contractor performance. For example, managers currently do not have the
ability to readily identify contracts that require an assessment, how
many are due and past due, and who is responsible for completing
assessments. According to these officials, holding managers accountable
for outcomes without adequate tools to manage the assessment process
would be difficult.
However, a few contracting managers we spoke with placed a high
priority on documenting contractor performance, noting that doing so
tended to improve communication with contractors and encourage good
performance. One Air Force Commander issued guidance reiterating that
CPARS is a key component in selecting contractors; that Commander
personally oversees the performance reporting system, requiring a
meeting with responsible officials when a CPARS report is overdue. DHS
officials recognized that more emphasis is needed on documenting
performance assessments and told us they have included a past
performance review as part of their chief procurement officer oversight
program for fiscal year 2009. Other indicators that some management
officials placed a high priority on documenting performance include the
following:
* Assigning past performance focal points--some activities assigned
focal points, individuals with specific responsibilities that included
providing training and oversight. At two Air Force locations, focal
points also reviewed performance narratives for quality.
* Designating assessing officials--some activities designated managers
as the official assessor of contractor performance rather than
contracting officers or program office officials.
Who to assign accountability to is another challenge. OFPP generally
views the completion of contractor performance assessments as a
contracting officer function. However, many contracting officials we
talked with stated they often do not have the required information to
complete an assessment and have to rely on program officials to provide
the information. Some contracting offices delegated responsibility for
completing assessments to the program office but acknowledged program
office officials have little incentive to complete assessments because
they often did not see the value in them. We previously reported in
2005 that conducting contactor surveillance at DOD, which includes
documenting contractor performance, was not a high priority and that
accountability for performing contractor surveillance was lacking.
[Footnote 30]
A Lack of Standardized Evaluation Factors and Rating Scales Limits
PPIRS Usefulness:
Differing number and type of rating factors and rating scales agencies
use to document contractor performance limit the usefulness of the
information in PPIRS. NASA's PPDB system has four rating factors, and
the CPS database, which is used by other civilian agencies, has five
rating factors. In contrast, DOD's CPARS system has a total of 16
rating factors. Each system also uses a different rating scale. Table 4
highlights these differences.
Table 4: Comparison of Contractor Past Performance Systems Rating
Factors:
Rating factor: Quality;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Check];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Check];
Past Performance Database used by NASA: [Check].
Rating factor: Timeliness/Schedule;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Check];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Check];
Past Performance Database used by NASA: [Check].
Rating factor: Price/cost;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Check];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Check];
Past Performance Database used by NASA: [Check].
Rating factor: Business relations;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Empty];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Check];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Check];
Past Performance Database used by NASA: [Empty].
Rating factor: Management of key personnel;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Empty];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Check];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Product performance;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Systems engineering;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Software engineering;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Logistics support;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Product assurance;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Other technical performance;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Management;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Management responsiveness;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Subcontract management;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Program management;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Empty];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Empty];
Past Performance Database used by NASA: [Empty].
Rating factor: Other;
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Systems[C]: [Check];
Contractor Performance Assessment Reporting System (CPARS)[A] used by
Defense and Energy[B]: Non-systems[D]: [Check];
Contractor Performance System (CPS)[A] used by other civilian agencies:
[Check];
Past Performance Database used by NASA: [Check].
Ratings and rating scales:
Rating: Contractor Performance Assessment Reporting System (CPARS)[A]
used by Defense and Energy[B]:
Unsatisfactory;
Marginal;
Satisfactory;
Very good;
Exceptional;
Rating: Contractor Performance System (CPS)[A] used by other civilian
agencies:
Unsatisfactory;
Poor;
Fair;
Good;
Excellent;
Outstanding;
Rating: Past Performance Database used by NASA:
Poor/Unsatisfactory;
Satisfactory;
Good;
Very good;
Excellent.
Scale: Contractor Performance Assessment Reporting System (CPARS)[A]
used by Defense and Energy[B]: Systems[C]:
Red;
Yellow;
Green;
Purple;
Dark blue;
Scale: Contractor Performance System (CPS)[A] used by other civilian
agencies:
0 to 5;
Scale: Past Performance Database used by NASA:
1 to 5.
Source: GAO analysis of agency contractor past performance systems and
guidance.
[A] Table does not include separate rating factors for construction and
architect/engineering for CPARS and CPS.
[B] Department of Energy switched from CPS to CPARS in November 2008.
Homeland Security is expected to switch from CPS to CPARS in early
2009.
[C] Systems include new development and major modifications to existing
systems.
[D] Non-systems include services, information technology, and
operations support.
[End of table]
Officials from GSA's Integrated Acquisition Environment, which has
oversight of governmentwide acquisition systems, acknowledged the
utility of PPIRS is currently limited by the differences in rating
factors and scales. Because the ratings are brought into PPIRS as-is,
aggregate ratings for contractors cannot be developed--the data are too
disparate. As a result, contracting officials making contract award
decisions may have to open and read through many ratings to piece
together an overall picture of a contractor's performance. Ultimately,
the lack of this information hinders the federal government's ability
to readily assess a contractor's performance at an aggregate level or
how overall performance is trending over time.
Central Oversight of PPIRS Data Is Lacking:
No one agency oversees, monitors, manages, or funds PPIRS to ensure
agency data fed into the system is adequate, complete, and useful for
sharing governmentwide. While GSA[Footnote 31] is responsible for
overseeing, and consolidating governmentwide acquisition related
systems, which include PPIRS, OFPP [Footnote 32] is responsible for
overall policy concerning past performance,and DOD funds and manages
the technical support of the system. In May 2000, OFPP published
discretionary guidance entitled "Best Practices for Collecting and
Using Current and Past Performance Information." Consistent with the
FAR, this guidance stated that agencies are required to assess
contractor performance and emphasized the need for an automated means
to document and share this information. Subsequently, OFPP issued a
draft contractor performance guide in 2006 designed to help agencies
know their role in addressing and using contractor performance
information. However, the guide was not intended to, nor does it,
establish governmentwide roles and responsibilities for managing and
overseeing PPIRS data.
Efforts to Improve PPIRS and the Sharing of Performance Information
Have Made Little Progress:
Since 2005, several efforts have been initiated to improve PPIRS and
provide pertinent and timely performance information, but little
progress has been made. Several broad goals for system improvement,
established in 2005 by an OFPP interagency group, have yet to be met.
Likewise, a short-term goal of revising the FAR to mandate the use of
PPIRS by all government agencies has yet to be achieved.
OFPP acknowledges that PPIRS falls short of its goal to provide useful
information to contracting officials making contracting decisions. When
PPIRS was established in 2002, OFPP officials envisioned it would
simplify the task of collecting past performance information by
eliminating redundancies among the various systems. In 2005, the Chief
Acquisition Officers Council,[Footnote 33] through an OFPP interagency
work group, established several broad goals for documenting, sharing,
and using past performance information, including the following:
* Standardize different contracting ratings used by various agencies.
* Provide more meaningful past performance information, including
terminations for default.
* Develop a centralized questionnaire system for sharing
governmentwide.
* Possibly eliminate multiple systems that feed performance information
in PPIRS.
However, little progress has been made in addressing these goals.
According to OFPP officials, funding needs to be dedicated to address
these goals and realize long-term improvements to the current past
performance system. GSA officials who oversee acquisition related
systems, to include PPIRS, told us that as of February 27, 2009,
efforts remain unfunded and no further action had been taken to make
needed improvements.
The first step in securing funding, according to OFPP and GSA
officials, is mandating the use of PPIRS. However, proposed changes to
the FAR that would clarify past performance documentation requirements
and require the use of PPIRS have been stalled. The proposed rule
provides clearer instruction to contracting officers by delineating the
requirement to document contractor performance for orders that exceed
the simplified acquisition threshold, including those placed against
GSA MAS contracts, or for orders against contracts awarded by another
agency.[Footnote 34] In proposing FAR changes, OFPP focused, in part,
on accountability by requiring agencies to identify individuals
responsible for preparing contractor performance assessments. While the
comment period for the proposed changes closed in June 2008, the
changes have not been finalized. An OFPP policy official stated that
the final rule is expected to be published by June 2009.
Conclusions:
With the federal government relying on many of the same contractors to
provide goods and services across agencies, the need to share
information on contractors' past performance in making contract award
decisions is critical. While the need for a centralized repository of
reliable performance information on federal contractors was identified
in 2002 when OFPP implemented PPIRS, we identified several underlying
problems that limit the usefulness of information in PPIRS for
governmentwide sharing. These problems include the lack of
accountability or incentive at agencies to document assessments in the
system, lack of standard evaluation factors and rating scales across
agencies, and a lack of central oversight to ensure the adequacy of
information fed into the system. Any efforts to improve sharing and use
of contractor performance information must, at a minimum, address these
deficiencies. Until then, PPIRS will likely remain an inadequate
information source for contracting officers. More importantly, the
government cannot be assured that it has adequate performance
information needed to make sound contract award decisions and
investments.
Recommendations for Executive Action:
To facilitate governmentwide sharing and use of past performance
information, we recommend that the Administrator of OFPP, in
conjunction with agency chief acquisition officers, take the following
actions:
* Standardize evaluation factors and rating scales governmentwide for
documenting contractor performance.
* 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.
* Specify that agencies are to establish procedures and management
controls, to include accountability, for documenting past performance
in PPIRS.
* Define governmentwide roles and responsibilities for managing and
overseeing PPIRS data.
* 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.
* Take appropriate action to finalize proposed changes to the FAR that
clarify responsibilities and performance documentation requirements for
contract actions that involve orders placed against GSA's Multiple
Award Schedule.
To improve management and accountability for timely documenting of
contractor past performance information at the agency level, we
recommend that the departments of Defense, Energy, Homeland Security,
and NASA establish management controls and appropriate management
review of past performance evaluations as required and in line with any
OFPP policy changes.
Agency Comments and Our Evaluation:
We provided a draft of this report to OFPP and the departments of
Defense, Energy, Homeland Security, GSA, and NASA. We received e-mail
comments from OFPP, in which OFPP concurred with the recommendations.
We received written comments from the other five agencies, which are
included as appendixes III through VII. In their written comments, the
agencies agreed with the recommendation on improving management
controls and most agencies outlined specific actions planned or taken
to address the recommendation.
In written comments to the draft of this report, DHS did not agree with
the figures contained in table 3 of the report regarding estimated
contracts requiring an assessment and number of assessments in PPIRS
for selected agencies. DHS stated that our numbers significantly
understate the percentage of DHS contracts for which assessments were
performed and are possibly inaccurate or misleading in how DHS compared
to other agencies. DHS presented its own data and requested that we
revise ours. We applied the same methodology across all civilian
agencies, including DHS, and found no basis for using the numbers or
methodology provided by DHS. For example, while DHS indicates we should
not include delivery orders, as we state in the note under table 3, our
estimates did not include individual orders issued by agencies that
exceed the threshold. Therefore, we stand by our methodology and data,
which as we stated in the report, presents a conservative estimate of
the contracts that required an assessment. Also, we assessed the
reliability of data we used and found it to be sufficiently reliable
for the purposes of our analyses. As a result, we are not revising the
figures in table 3. As noted in our report, improvements are needed
across agencies for the management and accountability of timely
documenting contractor past performance information. In its response,
DHS agreed that significant strides need to be made in this area.
In written comments to the draft of this report, GSA stated that our
recommendation should be changed to show that the FAR Council in lieu
of agency chief acquisition officers would be involved in developing
and disseminating governmentwide acquisition policy through the FAR.
According to an OFPP policy official, while the FAR Council would be
involved in evaluating policy and making changes to the FAR, OFPP is
responsible for overall policy concerning past performance and can make
policy changes without involving the FAR Council. In line with our
recommendations, this would include standards for evaluating past
performance and policies for collecting and maintaining the
information. As we state in the report, the Chief Acquisition Officers
Council, through an OFPP interagency work group, has already
established several broad goals for documenting, sharing, and using
past performance information. Our recommendations to OFPP, in
coordination with this Council, are in part aimed at actions necessary
to address these goals. These recommendations could be implemented
through an OFPP policy memorandum and could result in changes to the
FAR, which we recognize would need to be coordinated through the FAR
Council as appropriate. As a result, we are not making changes to the
recommendation.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days from the date of this report. We will then send copies of this
report to interested congressional committees; the Director of the
Office of Management and Budget, the Secretary of Defense; the
Secretaries of the Army, Navy, and Air Force; the Secretary of the
Department of Homeland Security; the Secretary of the Department of
Energy; the Secretary of the National Aeronautics and Space
Administration; and the Administrator of the General Services
Administration. In addition, we will also make copies available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you have questions about this report or need additional information,
please contact me at (202) 512-4146 or LasowskiA@gao.gov. Contact
points for our Office of Congressional Relations and Public Affairs may
be found on the last page of this report. See appendix VIII for a list
of key contributors to this report.
Signed by:
Anne-Marie Lasowski:
Director Acquisition and Sourcing Management:
[End of section]
Appendix I: Scope and Methodology:
To assess agencies' use of information on contractors' past performance
in awarding contracts, we reviewed and analyzed the Federal Acquisition
Regulation (FAR) and Office of Federal Procurement Policy (OFPP)
guidance on use of past performance. We also reviewed source selection
guidance for the Department of Defense (DOD), Department of Energy
(DOE), Department of Homeland Security (DHS), National Aeronautics and
Space Administration (NASA), and the General Services Administration
(GSA)--agencies accounting for a large percentage of federal
contractors. To obtain agency contracting officials' views on using
past performance, we used FPDS-NG data to select 11 buying offices
across the agencies to provide a cross-section of buying activities. At
these locations, we interviewed 121 contracting officials including
supervisory contract personnel to include division/branch contracting
managers, contracting officers, and contract specialists to discuss 1)
how past performance factored into the contract award decision, 2)
sources upon which they rely for the information, 3) completing
contractor performance assessments, and 4) challenge in using and
sharing past performance information. To identify the importance of
past performance relative to other non-cost factors in specific
solicitations, we used FPDS-NG data from fiscal year 2007 and the first
eight months of fiscal year 2008, to identify 62 competitively awarded
contracts--49 definitive contracts and 13 orders placed against
indefinite delivery vehicle contracts. We selected these contracts to
represent a range of contracts across different buying activities and-
-though not generalized to all contract actions within these agencies-
-represented a range of products and services, types of contracts, and
dollar values as shown in appendix II. We obtained contract documents
to verify the fields used in FPDS-NG to select the contracts, including
type of contract and product service code, and found the data reliable
enough for the purpose of selecting the contracts. For these contracts,
we obtained source selection documents including sections M of the
request for proposals, which described the evaluation factors for
award, and the source selection decision document that described how
past performance was evaluated for each offeror. We reviewed the
evaluation factors for each solicitation to identify how past
performance ranked in order of importance relative to other non-cost
factors in the evaluation scheme and summarized the results.
To assess the extent to which selected agencies in our review complied
with requirements for documenting contractor performance, we analyzed
FPDS-NG and PPIRS data and used information provided by the DOD CPARS
program office. In estimating the number of contracts requiring an
assessment for fiscal years 2006 and 2007 for civilian agencies in our
review, we aggregated contract actions in FPDS-NG[Footnote 35] for each
year to identify the number of contracts that exceeded the reporting
thresholds of $550,000 for construction contracts (FAR § 36.201),
$30,000 for architect and engineering (FAR § 36.604), and generally
$100,000 for most other contracts (FAR § 2.101). We excluded contracts
that are exempt from performance assessments under FAR subpart 8.7--
acquisitions from non profit agencies employing people who are blind or
severely disabled. For indefinite delivery contracts, including GSA's
multiple award schedule, orders were accumulated against the base
contract for each agency and counted as one contract if the cumulative
orders exceeded the reporting thresholds. This analysis provides a
conservative estimate of the number of contracts that require an
assessment because it does not include individual orders that may
exceed the threshold[Footnote 36] or contract actions that span fiscal
years. For this analysis, we used contract number and dollar obligation
fields from FPDS-NG and found them reliable enough for the purpose of
this analysis. Because DOD uses different reporting thresholds based on
business sectors--information that is not available in FPDS-NG--we
obtained compliance reports from the CPARS program office for fiscal
years 2006 and 2007, which included estimates of the number of
performance assessments that would have been required for DOD
components and the number of those contracts with completed
assessments. To determine the number of fiscal year 2006 and 2007
contracts with performance assessments for civilian agencies, we
obtained and analyzed data from the PPIRS program office on contracts
with assessments, including the number of assessments against GSA MAS
contracts, as of February 26, 2009. To assess the reliability of data
provided, we accessed the PPIRS system and compared the number of
contracts with assessments with those provided by the CPARS and PPIRS
program offices, and found the data sufficiently reliable for the
purpose of our analysis.
To assess the usefulness of PPIRS for governmentwide sharing of past
performance information, we compared information in each of the three
systems used to document contractor performance information including
rating factors and rating scales. In addition, we met with agency
officials who have responsibilities for managing the various systems--
including the Naval Sea Logistics Center Detachment, Portsmouth, which
administers CPARS and PPIRS, and officials at NASA who administer the
Past Performance Database. To identify challenges that may hinder the
systematic governmentwide sharing of past performance information, we
interviewed contracting officials from 11 buying offices regarding a
number of issues to include 1) roles in the assessment process, 2)
challenges in completing assessments, 3) performance information not
currently captured that might be useful for selecting contractors, 4)
and use of metrics for managing and monitoring compliance with
reporting requirements. Finally, we met with OFPP, GSA, and DOD to
discuss the extent of oversight of PPIRS data and roles and
responsibilities as applicable.
To assess efforts under way or planned to improve the sharing of
information on contractor performance, we obtained and reviewed
memorandums, plans, and other documents produced by OFPP including
proposed FAR changes and any proposed past performance guidelines. We
met with officials from these offices to discuss challenges already
identified in sharing and using past performance information, goals
they may have established for improving the system, and status of
efforts to address them.
Our work was conducted at the following locations: OFPP, Washington
D.C.; GSA, Arlington, Va; the Air Force Space and Missile Systems
Center, El Segundo, Ca; Hill Air Force Base, Ogden, Utah; the Army
Communications and Electronics Command, Fort Monmouth, N.J.; the Army
Sustainment Command, Rock Island, Ill.; the Army Contracting Command,
Fort Belvoir, Va.; the Naval Air Systems Command, Patuxent River, M.d.;
the Naval Sea Systems Command, Washington, D.C.; the Defense Contract
Management Agency located in Arlington, Va.; DHS including the Customs
and Border Protection, Washington, D.C., and the Transportation
Security Administration, Arlington, Va.; NASA including the Goddard
Space Flight Center, Greenbelt, M.d. and the Johnson Space Center,
Houston, Tex.; DOE including the National Nuclear Security
Administration Service Center located in Albuquerque, N.M.
We conducted this performance audit from February 2008 to February 2009
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II Information on Selected Contracts:
Definitive contracts:
Contract: 1;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: Utilities and housekeeping services;
Obligations[B]: 539,962.
Contract: 2;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: Utilities and housekeeping services;
Obligations[B]: 1,300,000.
Contract: 3;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: Guided missiles;
Obligations[B]: 1,948,949.
Contract: 4;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: Research and development;
Obligations[B]: 1,089,454.
Contract: 5;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: Electrical and electronic equipment components;
Obligations[B]: 1,726,453.
Contract: 6;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: ADP equipment software, supplies, equipment;
Obligations[B]: 1,785,110.
Contract: 7;
Department/Agency: Air Force;
Type of contract[A]: Firm fixed price;
Product-service: Metalworking machinery;
Obligations[B]: 2,788,246.
Contract: 8;
Department/Agency: Air Force;
Type of contract[A]: Cost plus award fee;
Product-service: Research and development;
Obligations[B]: 79,955,700.
Contract: 9;
Department/Agency: Air Force;
Type of contract[A]: Cost plus fixed fee;
Product-service: Research and development;
Obligations[B]: 101,645,000.
Contract: 10;
Department/Agency: Air Force;
Type of contract[A]: Cost plus incentive fee;
Product-service: Space vehicles;
Obligations[B]: 83,006,822.
Contract: 11;
Department/Agency: Air Force;
Type of contract[A]: Cost no fee;
Product-service: Professional, administrative and management support;
Obligations[B]: 7,970,232.
Contract: 12;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Communications, detection and coherent radiation;
Obligations[B]: 79,535,831.
Contract: 13;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Communications, detection and coherent radiation;
Obligations[B]: 628,839.
Contract: 14;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Ammunitions and explosives;
Obligations[B]: 51,253,912.
Contract: 15;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Ammunitions and explosives;
Obligations[B]: 25,284,323.
Contract: 16;
Department/Agency: Army;
Type of contract[A]: Cost plus fixed fee;
Product-service: Installation of equipment;
Obligations[B]: 1,193,905.
Contract: 17;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Ammunitions and explosives;
Obligations[B]: 2,952,174.
Contract: 18;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Ammunitions and explosives;
Obligations[B]: 0.
Contract: 19;
Department/Agency: Navy;
Type of contract[A]: Firm fixed price;
Product-service: Aircraft components and accessories;
Obligations[B]: 1,214,408.
Contract: 20;
Department/Agency: Navy;
Type of contract[A]: Firm fixed price;
Product-service: Weapons;
Obligations[B]: 11,528,350.
Contract: 21;
Department/Agency: Navy;
Type of contract[A]: Cost plus award fee;
Product-service: Research and development;
Obligations[B]: 145,200,000.
Contract: 22;
Department/Agency: Navy;
Type of contract[A]: Firm fixed price;
Product-service: Research and development;
Obligations[B]: 3,619,418.
Contract: 23;
Department/Agency: Navy;
Type of contract[A]: Cost no fee;
Product-service: Aircraft components and accessories;
Obligations[B]: 1,441,200.
Contract: 24;
Department/Agency: Navy;
Type of contract[A]: Fixed price;
Product-service: Ships, small craft, pontoons, and floating docks;
Obligations[B]: 18,260,656.
Contract: 25;
Department/Agency: Navy;
Type of contract[A]: Cost plus fixed fee;
Product-service: Research and development;
Obligations[B]: 9,420,000.
Contract: 26;
Department/Agency: Navy;
Type of contract[A]: Combination;
Product-service: Communications, detection and coherent radiation;
Obligations[B]: 470,376,195.
Contract: 27;
Department/Agency: Navy;
Type of contract[A]: Combination;
Product-service: Communications, detection and coherent radiation;
Obligations[B]: 63,160,779.
Contract: 28;
Department/Agency: Navy;
Type of contract[A]: Fixed price;
Product-service: Ship and marine equipment;
Obligations[B]: 19,560,381.
Contract: 29;
Department/Agency: Energy;
Type of contract[A]: Firm fixed price;
Product-service: Natural resources and conservation;
Obligations[B]: 0.
Contract: 30;
Department/Agency: Energy;
Type of contract[A]: Cost plus fixed fee;
Product-service: Special studies and analyses - not R&D;
Obligations[B]: 3,490,000.
Contract: 31;
Department/Agency: Energy;
Type of contract[A]: Cost plus fixed fee;
Product-service: Construction of structures and facilities;
Obligations[B]: 0.
Contract: 32;
Department/Agency: Homeland Security;
Type of contract[A]: Fixed price;
Product-service: Maintenance, repair or alteration of real property;
Obligations[B]: 2,257,370.
Contract: 33;
Department/Agency: Homeland Security;
Type of contract[A]: Fixed price;
Product-service: Professional, administrative and management support;
Obligations[B]: 1,278,414.
Contract: 34;
Department/Agency: Homeland Security;
Type of contract[A]: Fixed price;
Product-service: Automatic data processing and telecommunication;
Obligations[B]: 1,029,587.
Contract: 35;
Department/Agency: Homeland Security;
Type of contract[A]: Fixed price;
Product-service: Miscellaneous;
Obligations[B]: 3,661,500.
Contract: 36;
Department/Agency: Homeland Security;
Type of contract[A]: Firm fixed price;
Product-service: Professional, administrative and management support;
Obligations[B]: 1,158,445.
Contract: 37;
Department/Agency: Homeland Security;
Type of contract[A]: Labor hours;
Product-service: Professional, administrative and management support;
Obligations[B]: 2,709,800.
Contract: 38;
Department/Agency: Homeland Security;
Type of contract[A]: Firm fixed price;
Product-service: Household/commercial furnishings and appliances;
Obligations[B]: 849,439.
Contract: 39;
Department/Agency: Homeland Security;
Type of contract[A]: Firm fixed price;
Product-service: Construction of structures and facilities;
Obligations[B]: 21,815,402.
Contract: 40;
Department/Agency: Homeland Security;
Type of contract[A]: Cost plus award fee;
Product-service: Utilities and housekeeping services;
Obligations[B]: 4,105,104.
Contract: 41;
Department/Agency: Homeland Security;
Type of contract[A]: Cost plus award fee;
Product-service: Utilities and housekeeping Services;
Obligations[B]: 1,015,237.
Contract: 42;
Department/Agency: NASA;
Type of contract[A]: Cost plus award fee;
Product-service: Research and development;
Obligations[B]: 106,483,022.
Contract: 43;
Department/Agency: NASA;
Type of contract[A]: Cost plus award fee;
Product-service: Research and development;
Obligations[B]: 70,315,000.
Contract: 44;
Department/Agency: NASA;
Type of contract[A]: Fixed price incentive;
Product-service: Research and development;
Obligations[B]: 246,126,118.
Contract: 45;
Department/Agency: NASA;
Type of contract[A]: Cost plus award fee;
Product-service: Instruments and laboratory equipment;
Obligations[B]: 7,984,481.
Contract: 46;
Department/Agency: NASA;
Type of contract[A]: Firm fixed price;
Product-service: Construction of structures and facilities;
Obligations[B]: 23,128,500.
Contract: 47;
Department/Agency: NASA;
Type of contract[A]: Firm fixed price;
Product-service: Space vehicles;
Obligations[B]: 270,813.
Contract: 48;
Department/Agency: NASA;
Type of contract[A]: Combination;
Product-service: Professional, administrative and management support;
Obligations[B]: 3,682,286.
Contract: 49;
Department/Agency: NASA;
Type of contract[A]: Cost plus award fee;
Product-service: Operation of government owned facilities;
Obligations[B]: 23,507,653.
Indefinite delivery contracts:
Contract: 50;
Department/Agency: Air Force;
Type of contract[A]: Time and materials;
Product-service: Professional, administrative and management support;
Obligations[B]: 3,173,943.
Contract: 51;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Communications, detection and coherent radiation;
Obligations[B]: 32,863,535.
Contract: 52;
Department/Agency: Army;
Type of contract[A]: Firm fixed price;
Product-service: Professional, administrative and management support;
Obligations[B]: 2,243,240.
Contract: 53;
Department/Agency: Army;
Type of contract[A]: Cost plus award fee;
Product-service: Professional, administrative and management support;
Obligations[B]: 6,936,725,979.
Contract: 54;
Department/Agency: Navy;
Type of contract[A]: Firm fixed price;
Product-service: Ammunitions and explosives;
Obligations[B]: 99,980,000.
Contract: 55;
Department/Agency: Energy;
Type of contract[A]: Firm fixed price;
Product-service: Construction of structures and facilities;
Obligations[B]: 2,857,823.
Contract: 56;
Department/Agency: Homeland Security;
Type of contract[A]: Labor hours;
Product-service: Automatic data processing and Telecommunication;
Obligations[B]: 6,501,230.
Contract: 57;
Department/Agency: Homeland Security;
Type of contract[A]: Fixed price;
Product-service: Instruments and laboratory Equipment;
Obligations[B]: 35,728,080.
Contract: 58;
Department/Agency: Homeland Security;
Type of contract[A]: Other;
Product-service: Alarm, signal, and detection systems;
Obligations[B]: 16,533,682.
Contract: 59;
Department/Agency: Homeland Security;
Type of contract[A]: Other;
Product-service: Professional, administrative and management support;
Obligations[B]: 7,601,263.
Contract: 60;
Department/Agency: NASA;
Type of contract[A]: Cost plus award fee;
Product-service: Special studies and analyses - not R&D;
Obligations[B]: 1,604,607.
Contract: 61;
Department/Agency: NASA;
Type of contract[A]: Fixed price; Product-service: Utilities and
housekeeping Services;
Obligations[B]: 5,551,415.
Contract: 62;
Department/Agency: NASA;
Type of contract[A]: Cost plus award fee; Product-service: ADP
equipment software, supplies, equipment;
Obligations[B]: 7,262,027.
Source: GAO analysis.
[A] "Combination" applies to awards where two or more contract types
apply. "Other" applies where none of the award types in FPDS-NG apply.
[B] Contract obligations are from 10/01/2006 through 06/01/2008.
Contracts numbered as 18, 29, and 31 were newly awarded and had no
obligations recorded in FPDS-NG at the time we selected contracts for
our review.
[End of table]
[End of section]
Appendix III: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
Acquisition Technology And Logistics:
3000 Defense Pentagon:
Washington, DC 20301-3000:
April 7, 2009:
Ms. Katherine V. Schinasi:
Managing Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Ms. Schinasi:
This is the Department of Defense (DoD) response to the GAO Draft
Report, GAO-09-374, "Federal Contractors: Better Performance
Information Needed To Support Agency Contract Award Decisions," dated
March 9, 2009 (GAO Code 120715).
The Department concurs with the recommendation. A comment on the report
recommendation is enclosed.
Sincerely,
Signed by:
Shay D. Assad:
Director, Defense Procurement and Acquisition Policy:
Enclosure: As stated:
GAO Draft Report Dated March 9, 2009:
GAO-09-374 (GAO CODE 120715):
"Federal Contractors: Better Performance Information Needed To Support
Agency Contract Awards Decisions"
Department Of Defense Comment To The GAO Recommendation:
Recommendation: The GAO recommends that the Department of Defense (DoD)
establish management controls and appropriate management review of past
performance evaluations as required and in line with any Office of
Federal Procurement Policy policy changes. (p. 21/GAO Draft Report)
DOD Response: Concur. As cited in this draft report, DoD responded to
Department of Defense Inspector General (DoDIG) Report No. D-2008-057,
"Contractor Past Performance Information" dated February 29, 2008, by
issuing an Under Secretary of Defense (Acquisition, Technology and
Logistics) memorandum dated January 9, 2009. This memorandum requires
eligible contracts to be registered within 30 days of contract award,
past performance assessments to be completed within 120 days of the end
of the evaluation period and to reconcile the Contractor Performance
Assessment Reporting System (CPARS) database by deleting excess and
outdated information. The CPARS is the DoD system that feeds the Past
Performance Information Retrieval System (PPIRS) referenced in the
draft report. This requirement was further implemented by the
respective Services and Agencies.
There is an increase in registration of contracts and submission of
performance assessments reports since the issuance of the memorandum as
contracting offices are complying with the stated requirements. In
addition, each Military Department and Defense Agency is required to
submit a report to confirm compliance by March 31, 2009. The Department
will continue to monitor compliance through reports such as the CPARS
Status Report providing insight of the status of every CPAR in-process
or complete across the organization; the Contract Status Report
allowing managers to identify the status of all contracts registered;
the Auto Register Report allows identification of contracts being auto
registered from FPDS-NG feed to CPARS; and Processing Time Metrics
Reports with information on completed CPARS within the 120-day goal.
The Department will implement additional policy changes as issued by
the Office of Federal Procurement Policy.
[End of section]
Appendix IV: Comments from the Department of Energy:
Department of Energy:
Washington, DC 20585:
April 9, 2009:
Katherine V. Schinasi:
Managing Director, Acquisition and Sourcing Management:
U. S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Ms. Schinasi:
This is the Department of Energy (DOE) response to the Government
Accountability Office (GAO) Draft Report, GAO-09-374, "Federal
Contractors: Better Performance Information Needed to Support Agency
Contract Award Decisions," dated October 2009 (GAO-Code 120715). We
appreciate the opportunity to provide comment on the Draft Report.
DOE generally agrees with the findings and recommendations. With
respect to the recommendations pertaining to the standardization of
evaluation factors and rating scales, the Department believes that such
standardization must consider and be able to reconcile the various
contractor performance mechanisms that are used by agencies to assess
contractor performance depending on the nature of the work and type of
contract, including award fee and performance-based incentive
mechanisms.
DOE stands ready to support the Office of Federal Procurement Policy in
its efforts to address the issues and recommendations contained in the
report.
Should you have any questions, please contact Ms. Sandra Cover of my
staff at (202)287-1344.
Sincerely,
Signed by:
Edward R. Simpson:
Director:
Office of Procurement and Assistance Management:
[End of section]
Appendix V: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
April 8, 2009:
Katherine V. Schinasi:
Managing Director:
Acquisition and Sourcing Management:
U.S. Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Schinasi:
DHS appreciates the opportunity to review Draft Report GAO-09-374,
entitled, Federal Contractors: Better Performance Information Needed to
Support Contract Award Decisions. We concur with the recommendations
but nonconcur with the figures contained within Table 3 of the Draft
Report. We respectfully provide the following comments for
consideration in the Final Report.
Recommendation: To improve management and accountability for timely
documenting of contractor past performance information at the agency
level, we recommend that the departments of Defense, Energy, Homeland
Security, and NASA establish management controls and appropriate
management review of past performance evaluations as required and in
line with any OFPP policy changes.
Response: DHS recognizes the importance of contractor performance
evaluations in managing contractor performance and is increasing the
emphasis on both the collection of Contractor Performance Information
(CPI) and on the use of CPI in the evaluation of offerors. In Fiscal
Year 2007, the Under Secretary for Management issued a department-wide
policy letter emphasizing the importance of the collection and use of
CPI. That was followed in Fiscal Year 2008 by a seminar covering DHS
CPI policy and the application of that policy via the Contractor
Performance System (CPS) and the Past Performance Information Retrieval
System (PPIRS). In March 2009, DHS initiated a department-wide program
to both re-emphasize the need for collection of CPI and to train the
contracting workforce on the use of the Contractor Performance
Assessment Reporting System, a more robust system to which DHS is
transitioning.
DHS has promulgated guidance on collection of contractor performance
information in the Homeland Security Acquisition Regulation (HSAR)
which supplements the Federal Acquisition Regulation, and the Homeland
Security Acquisition Manual (HSAM). Furthermore, the HSAM specifies
that performance assessments be conducted on task and delivery orders
in addition to contracts.
As mentioned previously, DHS does not concur with the figures contained
within Table 3: Estimated Contracts Requiring an Assessment and Number
of Assessments in PPIRS for Selected Agencies, Fiscal Years 2006 and
2007 for DHS. The GAO numbers significantly understate the percentage
of DHS contracts for which assessments were performed. DHS requests
that the chart be revised to reflect the correct numbers.
The table below reflects the estimated contracts requiring an
assessment and the contracts with such assessments for the years 2006
and 2007. DHS takes exception to the GAO numbers regarding the
estimated contracts requiring an assessment, i.e., we believe those
numbers are significantly overstated, which in turn results in the GAO
percentage being significantly understated (e.g., for FY 2006 the GAO's
percentage is only 7.2%, while the DI-IS numbers show it is 13.0%).
While we still agree that significant strides need to be made in this
area, we are concerned that the report reflects inaccurate and possibly
misleading numbers, including but not limited to a comparison of the
percentages with other agencies.
In determining the number of estimated contracts requiring an
assessment, DHS totaled all original DHS awards that did not include
modifications, delivery orders or BPA Calls. DHS recommends that the
report be revised to reflect the DHS numbers.
Note that the GAO did not disclose to DHS their detailed computations,
so it is unclear exactly how the numbers in the draft report were
derived. As a result, we request that the GAO meet with us prior to
issuing the final report in the event the GAO does not concur with our
methodology. This will ensure that all parties can agree that the data
is accurately represented to the end user of the report.
Table: Estimated Contracts Requiring Assessments for FY 2006 & FY 2007:
GAO Estimate:
Estimated Contracts Requiring an Assessment - 2006: 4,487;
Contracts with Assessments - 2006: 324;
Estimated Percent: 7.2%;
Estimated Contracts Requiring an Assessment - 2007: 4,131;
Contracts with Assessments - 2007: 535;
Estimated Percent: 13.0%.
DHS Estimate:
Estimated Contracts Requiring an Assessment - 2006: 2,483;
Contracts with Assessments - 2006: 324;
Estimated Percent: 13.0%;
Estimated Contracts Requiring an Assessment - 2007: 2,162;
Contracts with Assessments - 2007: 535;
Estimated Percent: 24.7%.
Difference:
Estimated Contracts Requiring an Assessment - 2006: 2,004;
Estimated Contracts Requiring an Assessment - 2007: 1,969.
[End of table]
Thank you again for the opportunity to comment on this Draft Report and
we look forward to working with you on future homeland security issues.
Sincerely,
Signed by:
Jerald E. Levine:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix VI: Comments from the General Services Administration:
GSA Administrator:
U.S. General Services Administration:
1300 F Street, NW:
Washington, DC 20405-0002:
Telephone: (202) 501-0800
Fax: (202) 219-1243:
[hyperlink, http://www.gsa.gov]
April 10, 2009:
The Honorable Gene L. Dodaro:
Acting Comptroller General of the United States:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Dodaro:
Thank you for the opportunity to comment on the U.S. Government
Accountability Office (GAO) draft report, "Federal Contractors: Better
Performance Information Needed to Support Agency Contract Award
Decisions" (GAO-09-374). Substantive comments are provided below.
1. The General Services Administration (GSA) agrees with the substance
of GAO's findings and recommendations, with the exception that, in the
audit's section on Recommendations for Executive Action, the reference
to "agency chief acquisition officers" should be changed to "members of
the Federal Acquisition Regulation (FAR) Council, consisting of the
General Services Administration, the Department of Defense, and the
National Aeronautics and Space Administration." Although they confer
with the Office of Federal Procurement Policy (OFPP), the three Council
members develop and disseminate governmentwide acquisition policy
through the FAR. Likewise, in the last paragraph of the
"Recommendations" section, the reference to "OFPP policy changes"
should read "with any policy changes issued by the FAR Council."
2. Once the proposed FAR changes take effect, GSA will incorporate the
new requirement to report past performance data on Multiple Award
Schedule and Governmentwide Acquisition Contracts task/delivery orders
in appropriate training materials. GSA will also issue implementing
guidance for the various Federal Acquisition Service acquisition
activities to improve past performance reporting and usage.
Should you have any questions, please contact me. Staff inquiries may
be directed to Mr. Steven Kempf, Assistant Commissioner, Office of
Acquisition Management, at (703) 605-5527.
Sincerely,
Signed by:
Paul F. Prouty:
Acting Administrator:
cc: Katherine V. Schinasi, Managing Director, GAO:
[End of section]
Appendix VII: Comments from the National Aeronautics and Space
Administration:
National Aeronautics and Space Administration:
Office of the Administrator:
Washington, DC 20546-0001:
April 1, 2009:
Ms. Katherine V. Schinasi:
Managing Director:
Acquisition and Sourcing Management:
United States Government Accountability Office:
Washington, DC 20548:
Dear Ms. Schinasi:
NASA appreciates the opportunity to comment on the draft Government
Accountability Office (GAO) report. GAO-09-374, entitled "Better
Performance Information Needed to Support Agency Contract Award
Decisions."
In the draft report, GAO recommends that the Departments of Defense,
Energy, Homeland Security, and NASA take the following action.
Recommendation: To improve management and accountability for timely
documenting of contractor past performance information at the agency
level, recommend the establishment of management controls and
appropriate management review of past performance evaluations as
required, and in line with any Office of Procurement Policy changes.
Response: NASA concurs with this recommendation. NASA will issue a
Procurement Information Circular within 90 days to provide updated
guidance for use of NASA's Past Performance Database. This updated
guidance will enable more uniform Agency-wide compliance with the
requirements of FAR Subpart 42.15. Contractor Performance Information.
In addition, NASA will ensure e-mail notifications are sent to managers
and supervisors for late and non-submissions of past performance
evaluations.
Thank you for the opportunity to comment on this draft report. If you
have any questions or require additional information. please contact
Sandra Morris at (202) 358-0532.
Sincerely,
Signed by:
Charles H. Scales:
Associate Deputy Administrator:
[End of section]
Appendix VIII: GAO Contact and Acknowledgments:
GAO Contact:
Anne-Marie Lasowski (202) 512-4146 or LasowskiA@gao.gov:
Acknowledgments:
In addition to the individual named above, Ann Calvaresi Barr,
Director; James Fuquay, Assistant Director; Usman Ahmad; Jeffrey
Barron; Barry DeWeese; Julia Kennon; Flavio Martinez; Susan Neill;
Karen Sloan; Sylvia Schatz; and Bradley Terry made key contributions to
this report.
[End of section]
Footnotes:
[1] Past performance must be evaluated in selecting contractors for
negotiated competitive procurements expected to exceed the simplified
acquisition threshold of $100,000, unless the contracting officer
documents the reason past performance is not an appropriate evaluation
factor for the acquisition. FAR § 15.304(c)(3). Evaluation of past
performance, for example, may not be appropriate in a "lowest price,
technically acceptable" source selection. See FAR §15.101-2(b)(1).
[2] For purposes of this report, we focus on the use of past
performance information in agencies' contract award decisions. The
focus is not on past performance as considered in other points in the
procurement process, such as responsibility determinations and
suspension and debarment. See generally, FAR §§ 9.1 and 9.4.
[3] FAR § 42.1501.
[4] At a minimum, the solicitation must state whether all factors other
than cost or price, when combined are 1) significantly more important
than cost or price, 2) approximately equal to cost or price, or 3)
significantly less important than cost or price. FAR § 15.304(d) and
(e).
[5] FAR § 15.305(a)(2)(i)(ii).
[6] FAR § 42.1502(a). Agencies are not authorized to evaluate
performance for contracts awarded under FAR subpart 8.7--acquisitions
from non profit agencies employing people who are blind or severely
disabled. FAR § 42.1502(b).
[7] Effective January 29, 1999 the Director of Defense Procurement
extended a class deviation to FAR § 15.304(c)(3) and 42.1502(a). Under
this deviation, all DOD contracting activities are required to prepare
an evaluation of contractor performance for each contract expected to
exceed $5 million for systems and operations support; $1 million for
services, and information technology; and $100,000 for fuels and health
care contracts.
[8] During the course of our review, DHS and DOE indicated they had
contacted DOD regarding a transition to CPARS. According to DOD
officials, several civilian agencies were dissatisfied with the
functionality of their current system and contacted the CPARS program
office, prompting DOD to initiate a 2-year pilot program allowing
civilian agencies to use CPARS.
[9] PPIRS is administered by DOD's Naval Sea Logistics Center
Portsmouth, New Hampshire.
[10] Department of Defense Inspector General, Contractor Past
Performance Information, Report Number: D-2008-057 (Arlington, Va: Feb.
29, 2008).
[11] The Department of Defense Inspector General (DODIG) made a number
of recommendations to the Under Secretary of Defense for Acquisition,
Technology, and Logistics to include establishing requirements for
registering of contracts within specified timeframes, completing
contract performance assessment reports within 120 days from the end of
contract evaluation periods, and requiring formal training on writing
assessments. In response, DOD concurred with the recommendations and
stated the Department would advise the Military Departments to
implement them. DOD issued a memo on January 9, 2009, which reiterated
requirements for past performance assessment reporting and that each
military department and defense agency is to submit a report confirming
compliance with DODIG's recommendations by March 31, 2009.
[12] In this report, reliability refers to candid assessments that
accurately reflect a contractor's performance.
[13] Includes division/branch contracting managers and contracting
supervisors.
[14] Contractors are allowed to submit comments, rebutting statements,
or additional information on past performance assessments (FAR §
42.1503). Agencies have issued guidance in line with requirement and
generally allow the contractor to submit comments, rebuttals, or other
information for consideration prior to final assessment.
[15] Solicitations generally allow offerors the opportunity to provide
prior relevant, similar past performance information on contracts as a
basis for the past performance evaluation.
[16] FAR § 42.1502.
[17] FAR § 2.101.
[18] GSA's MAS program enables federal agencies to acquire commercial
goods and services from schedule contracts that are indefinite
delivery/indefinite quantity contracts. Federal agencies place task
and/or delivery orders against these contracts.
[19] OFPP has issued a proposed rule that clarifies that the
requirement in FAR § 42.1502 applies to both GSA and other agencies'
contracts or orders, but it has yet to be finalized. An OFPP policy
official stated that the new rule is expected to be published by June
2009. 73 Fed. Reg. 17,945 Apr. 2, 2008.
[20] DOD guidance, for example, allows flexibility in deciding whether
to assess contractors' performance on a total contract basis or an
order-by-order basis that exceeds required reporting thresholds. NASA
guidance, on the other hand, does not require, but allows, assessment
of contractor performance on task or delivery orders issued under
indefinite delivery contracts.
[21] These numbers include indefinite delivery contracts including
orders placed against GSA contracts. We did not include GSA in this
table because agencies placing the order are required to document the
assessment.
[22] Department of Defense Inspector General, Contractor Past
Performance Information, Report Number: D-2008-057 (Arlington, Va. Feb.
29, 2008).
[23] Termination for default is generally the exercise of the
Government's contractual right to completely or partially terminate a
contract because of the contractor's actual or anticipated failure to
perform its contractual obligations. FAR § 49.401(a).
[24] Office of the Special Inspector General for Iraq Reconstruction,
Iraq Reconstruction Project Terminations Represent a Range of Actions,
SIGIR 09-004 (Oct. 27, 2008).
[25] According to OFPP and DOD officials, a proposed FAR Case 2008-016,
Termination for Default Reporting--was opened on June 12, 2008, and was
being drafted at the time of our review.
[26] The July 23, 2008 memorandum stated that no later than 10 calendar
days after issuing a notice of termination for cause under FAR Subpart
12.4 or termination for default under FAR Subpart 49.4, regardless of
contract dollar value, the contracting officer must report the
termination to the Director, Defense Procurement, Acquisition Policy
and Strategic Sourcing. According to DOD officials, as of January 7,
2009, there were 19 entries in the DOD Termination List on the PPIRS
site and included contractors performing work both in the United States
and in Iraq. Dollar values range from under the simplified acquisition
threshold ($14,000) to over $88 million at time of termination.
[27] GAO, Defense Contracting: Contract Risk a Key Factor in Assessing
Excessive Pass-Through Charges, [hyperlink,
http://www.gao.gov/products/GAO-08-269] (Washington, D.C.: Jan. 25,
2008).
[28] FAR § 15.305(a)(2)(iii).
[29] FAR § 42.1501.
[30] GAO, Contract Management: Opportunities to Improve Surveillance on
Department of Defense Service Contracts, [hyperlink,
http://www.gao.gov/products/GAO-05-274] (Washington, D.C.: Mar. 17,
2005).
[31] GSA's Integrated Acquisition Environment is operated under the
authority of OFPP and the Chief Acquisition Officers Council. As such,
it has oversight of governmentwide acquisition related systems to
include PPIRS.
[32] Section 405(j) of title 41 of the U.S. Code requires the OFPP
Administrator to issue guidance for agencies on the consideration of
past contract performance information in awarding contracts, including
1) standards for evaluating past performance, 2) policies for
collecting and maintaining the information, 3) policies for ensuring
that offerors have an opportunity to submit relevant past performance
information and have it considered, and 4) the time period for
maintaining and considering the information.
[33] The Chief Acquisition Officers Council (the Council) consists of
acquisition professionals in the executive branch; the council was
established to provide a senior level forum for monitoring and
improving the federal acquisition system. The Council works closely
with OFPP to promote effective business practices in the federal
acquisition system.
[34] In April 2008 under FAR Case 2006-022, the OFPP and the Chief
Acquisition Officer's Acquisition Committee for E-GOV proposed changes
to amend FAR § 42.1502.
[35] FPDS-NG data as of May 27, 2008.
[36] Agency guidance differs on assessing indefinite delivery
contracts. Some agencies require assessments for each order exceeding
the threshold, while others allow flexibility to provide assessments on
each order, or one for the base contract.
[End of section]
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