Past Performance Evaluation in Government Contracting

In the business world you expect, and deserve, a regular employee evaluation to tell you how you are performing your job.  Promotions in responsibility and in pay are dependent on these evaluations.  Did you know that the Federal Government assesses their contractors and grant awardees using a Past Performance Evaluation?  Did you also know that this evaluation is placed into a Government wide database that is used when new business is considered? Did you know that the FAR Council just issued a final rule regarding the Government's documentation and retention of supplier Past Performance Evaluations?

A little history first.  The Federal Government has always had regulations stipulating evaluation of Government Contractor past performance evaluation.  In 2002 the Department of Defense endorsed the Past Performance Information Retrieval System (PPIRS) as the single source for this type of information on contractors.  This system is web-based and includes not only a Report Card but also Statistical Reporting on the contractor.  This data supports the FAR requirements for the Government to evaluate a potential awardees past performance prior to issuing a new award.  The DoD also establishes a Contractor Perfomance Assesment Reporting System (CPARS) which is a web-based application for documenting contractor performance assessments and evaluations.  This system was established in part to satisfy the requirements of FAR Part 42.  The Federal Awardee Performance & Integrity Information System (FAPIIS) also sprang out of requirements of FAR part 42.  The FAPIIS system is used to document additional contractor issues including Terminations for Cause or Default, DOD Determination of Contractor Fault, Defective Cost or Pricing Data, Determinations of Non-Responsibility, Terminations for Material Falure to Comply and Recipient Not Qualified Determinations.

The new rule, found in 75 Fed. Reg. 46,783, approved on Aug. 1, 2013 and effective September 3, 2013 creates a Government wide repository for contractor and grantee past performance evaluations.  All Past Performance Evaluations must be entered into the CPARS system.  All Contracts over the threshold of $150,000 will require the Contracting Officer (CO) to make entries into this system.  There are 5 basic categories for ratings:

  1. Technical
  2. Cost Control
  3. Schedule/Timeliness
  4. Management or Business Relations
  5. Small Business Subcontracting

The CO may evaluate other categories as they see appropriate.  The CO will rate each awardee in each above category as either Exceptional, Very Good, Satisfactory, Marginal or Unsatisfactory.  Obviously there could be some room for subjectivity and possible inconsistency.  No system is perfect. The new rule does not change the challenge process available to awardees.  The challenge will only escalate to one level above the CO.  This leaves little chance for the awardee to fight unsupported or unfair ratings.  These ratings are entered into the CPARS system which feeds the information into the PPIRS system. 

As you can quickly see, the government is trying to use past performance evaluations now as a powerful tool for awarding business.  Government awardees, especially small businesses, must understand and manage their ratings as best as possible to make sure they are in position for future business with the Government.  This will require knowing your CO and your agency very well (know your customer).  It will also require that the awardee take positive corrective actions if they suffer some low marks on a Past Performance Evaluation.  I guess that is similar to the employee that must make corrections when they suffer low marks on an employee performance evaluation.