[Federal Register Volume 59, Number 73 (Friday, April 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9115]
[[Page Unknown]]
[Federal Register: April 15, 1994]
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
Use of Past Performance Information in the Source Selection
Process
AGENCY: Executive Office of the President, Office of Management and
Budget (OMB), Office of Federal Procurement Policy (OFPP).
ACTION: The OFPP is requesting comments and suggestions on the use of
past performance information in contractor source selections.
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BACKGROUND: On December 17, 1993, (58 FR 66039) OFPP announced its
intention to establish a pilot program to increase the use of past
performance information in the selection of Government contractors. A
public meeting was held on January 13, 1994 to obtain views and
comments on the pilot program. On January 26, 1994, representatives
from twenty agencies and departments identified sixty-one specific
contracts to be awarded under the pilot program.
Request for Proposals (RFPs) have now been issued on several of the
contracts pledged under the pilot program. During the preparation of
the RFPs, and in the development of other aspects of the program,
several topics have surfaced on a recurring basis. These topics are
summarized below and OFPP is interested in obtaining views and
suggestions on the specific topics as well as on general features of
the past performance program:
1. Distinction between past performance and past experience. There
is no uniformity in present agency practices with regard to
distinguishing between past performance and past experience. Sometimes
the terms are used interchangeably, in other instances they have
different definitions. For purposes of the pilot program, OFPP is
distinguishing between past performance and past experience. Past
performance is viewed as relating to ``quality'' and how well a
contractor performed. Past experience, in comparison, is viewed as
pertaining to the types and amounts of work previously performed by a
contractor.
2. Responsibility Determinations vs. Source Selection Decisions.
Some confusion exists because past performance is used in making
responsibility determinations as well as contract award decisions.
Federal Acquisition Regulation (FAR) 9.104-3(c) requires a satisfactory
performance record before a contractor can be determined to be
responsible. Similarly, FAR 9.104-1(e) requires that the contractor
``have the necessary organization, experience, accounting and
operational controls . . .,'' in order to be determined responsible. If
an agency determines that a small business is ``not responsible''
(i.e., not capable of performing) that determination may be appealed to
the Small Business Administration (SBA), under ``Certificate of
Competency'' (COC) procedures.
Contract award or evaluation decisions are (in comparison to
responsibility determination), made pursuant to evaluation criteria
stated in the RFP. When treated as an evaluation factor, past
performance information is used to make comparisons among competing
firms to determine relative ratings or rankings; e.g., firm A is better
(presents less risk to the government) then firm B; firm B is better
than firm C, etc. Evaluation decisions assess the relative capability
of firms. They are not ``go/no go'' decisions and are not subject to
the COC process or referral to the SBA.
3. Past Performance As An Evaluation Factor or Subfactor. In
developing the RFPs for the past performance pilot program, some
agencies have treated past performance as an independent ``factor'' and
require offerors to submit a separate performance proposal distinct
from other common proposals; e.g., price, technical, management, etc.
Other agencies treat past performance as a subfactor to be dealt with
in the technical or management proposal. There is no single best way to
include past performance requirements in an RFP, and OFPP does not plan
to dictate a specific methodology. The main goal for each agency should
be to stress the interrelationship in the RFP among the statement of
work, the section L (instructions to bidders) and the section M
(evaluation criteria). This interrelationship should be clear and
should provide a rational basis for conducting the evaluation and award
process.
4. ``New'' Firms. One of the most frequently asked questions about
using past performance information in source selections is, ``How are
new firms to be treated?'' In OFPP's view, new firms should be neither
rewarded nor penalized as a result of their lack of performance
history. If, for example, past performance is to be rated on a scale of
one to ten, a new firm should be given the average score of the other
competing offerors. Unless the RFP contains a specific requirement for
prior performance based on safety, health, national security, or
mission essential considerations, agencies should ``neutralize'' the
past performance factor and evaluate the merits of proposals received
from new firms in accordance with other stated evaluation criteria.
5. Credit for the Past Performance and Experience of Employees and
Subcontractors? Offerors should generally be given credit (or lack of
credit, as appropriate) for the past performance and experience of
employees, subcontractors, and affiliates. Agencies may, however,
depending upon the nature of the work requirements, limit consideration
to the corporate entity receiving the contract. Agencies should craft
their evaluation criteria to apply to specific requirements. If a
unique or special corporate experience or capability is required, an
agency may appropriately determine that it is necessary for the
contractor to possess the particular capability.
6. Discussions of An Offeror's Past Performance During Source
Selection. Except where award is intended to be made without
discussions, OFPP generally encourages agencies to discuss past
performance information with offerors during contract negotiations.
Discussions about past performance may serve to help validate the
accuracy of past performance data and give offerors an opportunity to
fully explain the nature of any prior problems.
7. Should Past Performance Be Scored or Not Scored? The evaluation
of past performance is a subjective assessment based on specific facts
and circumstances. Past performance evaluations are not generally based
on absolute standards of acceptable performance and there is no
requirement that such assessments be scored. The decision of whether to
score past performance or to use other assessment methods such as color
codings, adjectival descriptions or rankings is a determination that
must be made by each procuring agency.
8. Reference Checks. The checking of references from previously
performed contracts is the most common way of ascertaining an offeror's
performance record. Accordingly, RFPs should not give offerors total
discretion in selecting which of the offeror's prior contracts the
government will evaluate. RFPs should be structured to require an
offeror to submit references from a series of completed or ongoing
contracts; e.g., ``the last five completed contracts'' not just ``the
last five contracts that the offeror considers relevant.'' References
should not be limited, without reason, to just government sector
contracts. Agencies are encouraged to check information from sources
other than those provided by the offerors (e.g. the Federal Procurement
Data System or private sector sources) and to use both contracting and
program personnel in conducting reference checks and in making
performance assessments.
9. Questionnaires vs. Structured Telephone Interviews. Written
questionnaires and structured telephone interviews are two of the most
common ways of checking references. Both procedures rely on standard
questions which must be tailored to reflect general performance as well
as the specific skills and talents necessary to perform the statement
of work. Sample questions on general performance include the following:
--Would you do business with the contractor again?
--Did the contractor meet scheduled milestones on time?
--What was the overall quality of the work performed?
--Was the contractor cooperative?
--Did the contractor show business-like concern for the customer's
interest?
--Was the work performed in accordance with the basic contract?
--If there were problems with contractor performance, how responsive
was the contractor's management team in addressing them?
Agencies should not accept simple ``yes'' or ``no'' answers in
response to questionnaires or to telephone questions. Instead, they
should strive to obtain a complete picture and a full understanding of
the contractor's performance.
10. Sharing of Evaluations With Contractors. OFPP believes that
performance evaluations conducted under an ongoing contract or at the
time of completion should be shared with the contractor. The contractor
should have an opportunity to provide comments and rebuttals back to
the agency. OFPP Policy Letter 92-5 provides that a vendor be permitted
to discuss any evaluation with the contracting officer of if the
contracting officer does the evaluation with the head of the
contracting activity. It also provides for making any rebuttals part of
the evaluation file. The intent of that policy is to provide for
openness and fairness without establishing a new formal-type appeals
process.
11. Availability of Performance Assessments. Questions have been
asked at several meetings and other occasions, whether agencies will
release past performance information to parties outside the government.
Absent the contractor's consent, past performance information should
not be released except where the agency determines that such
information must be provided under the Freedom of Information Act (5
U.S.C. 552).
12. Incumbents. Some have expressed concern that incumbent
contractors may have an unfair advantage in the award of a follow-on
contract where past performance is used as a selection criteria. To the
extent that an incumbent has performed well, that performance should be
recognized and given favorable treatment over another contractor whose
past performance history is not as strong. Similarly, if an incumbent
has more relevant experience for a follow-on contract than a
competitor, that should be reflected in the comparative scoring of the
offerors. Conversely, poor performance should work against an incumbent
being selected for a follow-on contract, particularly where an offer
has been received from a contractor with a stronger record of past
performance. Agencies should rate past performance on work actually
performed and an offeror's status as an incumbent should not guarantee
a higher past performance rating.
13. Databases. OFPP is not advocating that agencies or contracting
activities establish past performance information databases.
Information about a contractor's performance should be a matter of
record for the agency to consider in later source selections. Whether
such records are retained in contract files or in separate databases is
a decision that must be made by the agency or contracting activity.
Agencies are encouraged to share performance information with other
agencies. First-hand information is, however, better than second-
information. If an agency has first hand information about a
contractor's performance it should give that information (whether good
or bad) preference over information obtained from other sources.
14. Customer Satisfaction Survey. A separate initiative is being
developed by OFPP to ask agencies to conduct ``customer satisfaction
surveys'' on a number of ongoing contracts. A subsequent Federal
Register notice is planned to explain the initiative, and opportunities
will be provided to all interested parties to discuss various issues
associated with it. The Federal Register notice is scheduled for
issuance within the next four to six weeks.
public meeting: A public meeting will be held in the White House
Conference Center, Truman Room, 3rd floor, 726 Jackson Place, NW.,
Washington, DC at 10 a.m., May 6, 1994. Persons or organizations
wishing to present ideas or suggestions on how past performance
information can be used in the source selection process are encouraged
to attend the meeting. Written statements will be accepted by OFPP at
the public meeting and persons or organizations wishing to make oral
statements will be given five minutes each to present their views.
Persons and organizations with similar positions are encouraged to
select a common spokesman for the presentation of their views. Persons
wishing to attend and/or present statements at the public meeting
should contact Ms. Margaret B. Davis at 202-395-6803 before 3:30 p.m.,
May 5, 1994, in order to be cleared for the meeting.
dates: Comments and suggestions in response to this Federal Register
notice including statements to be presented at the public meeting,
should be received in OFPP by 5 p.m., May 4, 1994.
addresses: Comments, suggestions, and statements should be submitted to
the Office of Management and Budget, Office of Federal Procurement
Policy, room 9013, New Executive Office Building, 725 17th Street, NW.,
Washington, DC 20503.
for further information contact: Charles W. Clark, Office of Federal
Procurement Policy, Washington, DC 20503, 202-395-6805.
Steven Kelman,
Administrator.
[FR Doc. 94-9115 Filed 4-14-94; 8:45 am]
BILLING CODE 3110-01-M