[Federal Register Volume 60, Number 62 (Friday, March 31, 1995)]
[Rules and Regulations]
[Pages 16718-16720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7827]




[[Page 16717]]

_______________________________________________________________________

Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 9, 15, and 42



Federal Acquisition Regulation; Past Performance Information; Final 
Rule

  Federal Register / Vol. 60, No. 62 / Friday, March 31, 1995 / Rules 
and Regulations   
[[Page 16718]] 

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 9, 15, and 42

[FAC 90-26; FAR Case 93-02]
RIN 9000-AG45


Federal Acquisition Regulation; Past Performance Information

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to issue Federal 
Acquisition Circular (FAC) 90-26, a final rule amending the Federal 
Acquisition Regulation (FAR) to establish requirements for the use of 
past performance information in the contractor selection process. This 
regulatory action was subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

EFFECTIVE DATE: May 30, 1995.

FOR FURTHER INFORMATION CONTACT:
Ms. Linda Klein at (202) 501-3775 in reference to this FAR case. For 
general information, contact the FAR Secretariat, Room 4037, GS 
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-26, 
FAR case 93-02.

SUPPLEMENTARY INFORMATION:

A. Background

    A proposed FAR rule was published in the Federal Register at 59 FR 
8108 on February 17, 1994. The proposed rule required evaluation of 
past performance in all competitively negotiated acquisitions expected 
to exceed $100,000, and evaluation of contractor performance on all new 
contracts exceeding $100,000.
    Thirty-five comments from twenty-five sources were received during 
the public comment period. All comments were considered in the 
development of this final rule. The final rule differs from the 
proposed rule in that it (1) permits agencies to use a phase-in 
approach for implementation of past performance evaluation 
requirements; (2) clarifies that firms lacking relevant performance 
history shall receive a neutral evaluation for past performance; (3) 
permits offerors to submit relevant past performance information to the 
Government; (4) excludes contracts awarded under FAR Subparts 8.6 and 
8.7 from the requirement for evaluation of contractor performance; (5) 
provides that past performance information files shall not be retained 
to provide source selection information for longer than three years 
after completion of contract performance; and (6) contains additional 
guidance to facilitate the collection and use of past performance 
information.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) applies to 
this final rule and a Final Regulatory Flexibility Analysis has been 
performed. A copy of the analysis may be obtained from the FAR 
Secretariat.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the final rule 
does not impose recordkeeping or information collection requirements 
which require the approval of the Office of Management and Budget under 
44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 9, 15, and 42

    Government procurement.

    Dated: March 27, 1995.
C. Allen Olson,
Director, Office of Federal Acquisition Policy.

Federal Acquisition Circular

FAC 90-26

    Federal Acquistion Circular (FAC) 90-26 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    All Federal Acquisition Regulation (FAR) and other directive 
material contained in FAC 90-26 are effective May 30, 1995.

    Dated: February 27, 1995.
Eleanor R. Spector,
Director, Defense Procurement.
    Dated: February 2, 1995.
Deidre A. Lee,
Associate Administrator for Procurement, NASA.
Ida M. Ustad,
Associate Administrator, Office of Acquisition Policy, GSA.

    Therefore, 48 CFR Parts 9, 15, and 42 are amended as set forth 
below:
    1. The authority citation for 48 CFR Parts 9, 15 and 42 continues 
to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 9--CONTRACTOR QUALIFICATIONS

    2. Section 9.104-1(c) is revised to read as follows:


9.104-1  General standards.

* * * * *
    (c) Have a satisfactory performance record (see 48 CFR 9.104-3(c) 
and part 42, subpart 42.15). A prospective contractor shall not be 
determined responsible or nonresponsible solely on the basis of a lack 
of relevant performance history, except as provided in 9.104-2;
* * * * *
    3. Section 9.105-1(c) is amended by revising the introductory text 
to read as follows:


9.105-1  Obtaining information.

* * * * *
    (c) In making the determination of responsibility (see 9.104-1(c)), 
the contracting officer shall consider relevant past performance 
information (see 48 CFR part 42, subpart 42.15). In addition, the 
contracting officer should use the following sources of information to 
support such determinations:
* * * * *

PART 15--CONTRACTING BY NEGOTIATION

    4. Section 15.406-5(b) is amended by revising the last two 
sentences to read as follows:


15.406-5  Part IV--Representations and instructions.

* * * * *
    (b) * * * The severable parts should provide for separation of cost 
or pricing data, past performance data and, when needed, technical 
data. The instructions may specify further organization of proposal or 
quotation parts, such as (1) administrative, (2) management, (3) 
technical, (4) past performance, and (5) cost or pricing data.
* * * * *
    5. Section 15.604 is amended by revising paragraphs (b) and (c)(3) 
to read as follows:


15.604  Responsibilities.

* * * * *
    (b) The cognizant technical official is responsible for the 
technical and past performance requirements related to the source 
selection process.
    (c) * * *
    (3) Conducting or controlling all negotiations concerning cost or 
price, technical requirements, past [[Page 16719]] performance, and 
other terms and conditions; and
* * * * *
    6. Section 15.605 is amended by revising paragraph (b), removing 
paragraph (c), redesignating (d), (e) and (f) as (c), (d) and (e), 
respectively, and revising newly-redesignated (d) to read as follows:


15.605  Evaluation factors.

* * * * *
    (b)(1) The evaluation factors that apply to an acquisition and the 
relative importance of those factors are within the broad discretion of 
agency acquisition officials except that--
    (i) Price or cost to the Government shall be included as an 
evaluation factor in every source selection.
    (ii) Past performance shall be evaluated in all competitively 
negotiated acquisitions expected to exceed $100,000 not later than 
January 1, 1999, unless the contracting officer documents in the 
contract file the reasons why past performance should not be evaluated. 
Agencies may develop their own phase-in schedule for past performance 
evaluations which meets or exceeds the following milestones: All 
solicitations with an estimated value in excess of (A) $1,000,000 
issued on or after July 1, 1995; (B) $500,000 issued on or after July 
1, 1997; and (C) $100,000 issued on or after January 1, 1999. Past 
performance may be evaluated in competitively negotiated acquisitions 
estimated at $100,000 or less at the discretion of the contracting 
officer.
    (iii) Quality shall be addressed in every source selection through 
inclusion in one or more of the non-cost evaluation factors, such as 
past performance, technical excellence, management capability, 
personnel qualifications, prior experience, and schedule compliance.
    (2) Any other relevant factors, such as cost realism, may also be 
included.
* * * * *
    (d) The solicitation should be structured to provide for the 
selection of the source whose proposal offers the greatest value to the 
Government in terms of performance, risk management, cost or price, and 
other factors. The solicitation shall clearly state the evaluation 
factors, including cost or price, cost or price-related factors, past 
performance and other non-cost or non-price-related factors, and any 
significant subfactors, that will be considered in making the source 
selection, and their relative importance (see 15.406-5(c)). Numerical 
weights, which may be employed in the evaluation of proposals, need not 
be disclosed in solicitations. The solicitation shall inform offerors 
of minimum requirements that apply to particular evaluation factors and 
significant subfactors.
* * * * *
    7. Section 15.608(a) is amended by revising the introductory text, 
redesignating paragraph (a)(2) as (a)(3), and adding a new paragraph 
(a)(2) to read as follows:


15.608  Proposal evaluation.

    (a) Proposal evaluation is an assessment of both the proposal and 
the offeror's ability to successfully accomplish the prospective 
contract. An agency shall evaluate competitive proposals solely on the 
factors specified in the solicitation.
* * * * *
    (2) Past performance evaluation. (i) Past performance information 
is an indicator of an offeror's ability to perform the contract. The 
comparative assessment of past performance information is separate from 
the responsibility determination required under 48 CFR 9.103. The 
number and severity of an offeror's problems, the effectiveness of 
corrective actions taken, the offeror's overall work record, and the 
age and relevance of past performance information should be considered 
at the time it is used.
    (ii) Where past performance is to be evaluated, the solicitation 
shall afford offerors the opportunity to identify Federal, state and 
local government, and private contracts performed by the offerors that 
were similar in nature to the contract being evaluated, so that the 
Government may verify the offerors' past performance on these 
contracts. In addition, at the discretion of the contracting officer, 
the offerors may provide information on problems encountered on the 
identified contracts and the offerors' corrective actions. Past 
performance information may also be obtained from other sources known 
to the Government. The source and type of past performance information 
to be included in the evaluation is within the broad discretion of 
agency acquisition officials and should be tailored to the 
circumstances of each acquisition. Evaluations of contractor 
performance prepared in accordance with 48 CFR part 42, subpart 42.15 
are one source of performance information which may be used.
    (iii) Firms lacking relevant past performance history shall receive 
a neutral evaluation for past performance.
* * * * *
    8. Section 15.610 is amended by removing the word ``and'' at the 
end of paragraph (c)(4) and the period at the end of (c)(5) and 
inserting ``; and'' in its place; and by adding paragraph (c)(6) to 
read as follows:


15.610  Written or oral discussion.

* * * * *
    (c) * * *
    (6) Provide the offeror an opportunity to discuss past performance 
information obtained from references on which the offeror had not had a 
previous opportunity to comment. Names of individuals providing 
reference information about an offeror's past performance shall not be 
disclosed.
* * * * *
    9. Section 15.1003(b) is amended by removing the word ``and'' at 
the end of paragraph (b)(2) and the period at the end of (b)(3) and 
inserting ``; and'' in its place; and by adding paragraph (b)(4) to 
read as follows:


15.1003  Debriefing of unsuccessful offerors.

* * * * *
    (b) * * *
    (4) Names of individuals providing reference information about an 
offeror's past performance.
* * * * *

PART 42--CONTRACT ADMINISTRATION

    10. Section 42.302 is amended by adding paragraph (b)(11) to read 
as follows:


42.302  Contract administration functions.

* * * * *
    (b) * * *
    (11) Prepare evaluations of contractor performance in accordance 
with subpart 42.15.
* * * * *
    11. Subpart 42.15 is added to read as follows:

Subpart 42.15--Contractor Performance Information

Sec.
42.1500  Scope of subpart.
42.1501  General.
42.1502  Policy.
42.1503  Procedures.


42.1500  Scope of subpart.

    This subpart provides policies and establishes responsibilities for 
recording and maintaining contractor performance information. It 
implements Office of Federal Procurement Policy Letter 92-5, Past 
Performance Information. This subpart does not apply to procedures used 
by agencies in determining fees under award or incentive fee contracts. 
[[Page 16720]] However, the fee amount paid to contractors should be 
reflective of the contractor's performance and the past performance 
evaluation should closely parallel the fee determinations.


42.1501  General.

    Past performance information is relevant information, for future 
source selection purposes, regarding a contractor's actions under 
previously awarded contracts. It includes, for example, the 
contractor's record of conforming to contract requirements and to 
standards of good workmanship; the contractor's record of forecasting 
and controlling costs; the contractor's adherence to contract 
schedules, including the administrative aspects of performance; the 
contractor's history of reasonable and cooperative behavior and 
commitment to customer satisfaction; and generally, the contractor's 
business-like concern for the interest of the customer.


42.1502  Policy.

    (a) Except as provided in paragraph (b) of this section, agencies 
shall prepare an evaluation of contractor performance for each contract 
in excess of $1,000,000 beginning July 1, 1995, $500,000 beginning July 
1, 1996, and $100,000 beginning January 1, 1998, (regardless of the 
date of contract award) at the time the work under the contract is 
completed. In addition, interim evaluations should be prepared as 
specified by the agencies to provide current information for source 
selection purposes, for contracts with a period of performance, 
including options, exceeding one year. This evaluation is generally for 
the entity, division, or unit that performed the contract. The content 
and format of performance evaluations shall be established in 
accordance with agency procedures and should be tailored to the size, 
content, and complexity of the contractual requirements.
    (b) Agencies shall not evaluate performance for contracts awarded 
under 48 CFR part 8, subparts 8.6 and 8.7. Agencies shall evaluate 
construction contractor performance and architect/engineer contractor 
performance in accordance with 48 CFR 36.201 and 36.604, respectively.


42.1503  Procedures.

    (a) Agency procedures for the past performance evaluation system 
shall generally provide for input to the evaluations from the technical 
office, contracting office and, where appropriate, end users of the 
product or service.
    (b) Agency evaluations of contractor performance prepared under 
this subpart shall be provided to the contractor as soon as practicable 
after completion of the evaluation. Contractors shall be given a 
minimum of 30 days to submit comments, rebutting statements, or 
additional information. Agencies shall provide for review at a level 
above the contracting officer to consider disagreements between the 
parties regarding the evaluation. The ultimate conclusion on the 
performance evaluation is a decision of the contracting agency. Copies 
of the evaluation, contractor response, and review comments, if any, 
shall be retained as part of the evaluation. These evaluations may be 
used to support future award decisions, and should therefore be marked 
``Source Selection Information''. The completed evaluation shall not be 
released to other than Government personnel and the contractor whose 
performance is being evaluated during the period the information may be 
used to provide source selection information. Disclosure of such 
information could cause harm both to the commercial interest of the 
Government and to the competitive position of the contractor being 
evaluated as well as impede the efficiency of Government operations. 
Evaluations used in determining award or incentive fee payments may 
also be used to satisfy the requirements of this subpart.
    (c) Departments and agencies shall share past performance 
information with other departments and agencies when requested to 
support future award decisions. The information may be provided through 
interview and/or by sending the evaluation and comment documents to the 
requesting source selection official.
    (d) Any past performance information systems, including automated 
systems, used for maintaining contractor performance information and/or 
evaluations should include appropriate management and technical 
controls to ensure that only authorized personnel have access to the 
data.
    (e) The past performance information shall not be retained to 
provide source selection information for longer than three years after 
completion of contract performance.

[FR Doc. 95-7827 Filed 3-30-95; 8:45 am]
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