[Federal Register Volume 60, Number 222 (Friday, November 17, 1995)]
[Proposed Rules]
[Pages 57691-57693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28433]



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DEPARTMENT OF DEFENSE
48 CFR Parts 213, 214, 215, and 242

[DFARS Case 95-D715]


Defense Federal Acquisition Regulation Supplement; Past 
Performance

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comment.

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SUMMARY: The Department of Defense is proposing to amend the Defense 
Federal Acquisition Regulation Supplement (DFARS) to reflect the 
requirements of Section 1091 of the Federal Acquisition Streamlining 
Act of 1994 and the requirements of OFPP Policy Letter 92-5, Past 
Performance Information.

DATES: Comments on the proposed rule should be submitted in writing to 
the DFARS Secretariat at the address shown below on or before January 
16, 1996 to be considered in the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: IMD 3D139, PDUSD (A&T), 
3062 Defense Pentagon, Washington, DC 20301-3062. Please cite DFARS 
Case 95-D715 in all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT: Ms. Melissa D. Rider, at (703) 602-
0131. Please cite DFARS case 95-D715.

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355 
(FASA), provides authorities that streamline the acquisition process 
and minimize burdensome government-unique requirements. Major changes 
in the acquisition process as a result of FASA implementation include 
changes in the areas of Commercial Item Acquisition, Simplified 
Acquisition Procedures, the Truth in Negotiations Act, and introduction 
of the Federal Acquisition Computer Network (FACNET).
    At the request of the Administrator, Office of Federal Procurement 
Policy, the DoD Past Performance Coordinating Council (PPCC) was tasked 
by the FASA DFARS Implementation Manager to develop DFARS coverage for 
implementing Section 1091 of FASA. There were no associated FAR changes 
that were published as a FASA-related rule, as the final FAR rule 
published in the Federal Register on March 31, 1995 (60 FR 16718) 
already complied with FASA requirements.
    The following changes to DFARs were developed by the PPCC to 
implement OFPP Policy Letter 92-5, Past Performance Information, and 
Section 1091 of FASA:

[[Page 57692]]

    1. DFARS Part 213 coverage has been added to provide guidance for 
actions using simplified acquisition procedures.
    2. DFARS Part 214 coverage allows contracting officers to quantify 
past performance information (PPI) as a price-related factor.
    3. DFARS Past 215 coverage accelerates the FAR phase-in schedule, 
taking two years to get to the $100,000 threshold; assures appropriate 
weighting of PPI; encourages (rather than mandates) use under $100,000; 
and requires validation of PPI before it is used.
    4. DFARS 242.1502 provides requirements for preparing evaluations 
of performance on individual contracts; accelerates the preparation of 
the evaluation beyond the use requirements in 214 and 215; provides 
instructions for interim evaluations--this is the agency direction 
required by the FAR; and provides a list of required information for 
performing evaluations. Use of a standardized list will help the 
exchange of PPI among the DoD components. The list is based on the form 
in the OFPP Interim Guide to Best Practices for Past Performance, and 
has been tailored to meet the needs of DoD Components. This is not a 
standard form, but in the future may be an evaluation tool that can be 
readily accessible via electronic commerce/electronic data interchange 
(EC/EDI).
    5. DFARS 242.1503(a) states the contracting officer specifies who 
provides performance evaluations (as a default, Defense Contract 
Management Command (DCMC) ACOs will fill out the form unless the 
contracting officer specifies otherwise); requires the evaluator to 
validate PPI with the contractor; addresses non-response by contractors 
who were asked for validation; and defines contract completion as the 
time all contract close-out actions are complete.

B. Regulatory Flexibility Act

    The proposed DFARS changes may have a significant economic impact 
on a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et. seq., because the 
requirements for use of past performance information in contract award 
decisions may preclude award to otherwise successful offerors. The 
extent of this impact is not known, although it is believed that the 
regulatory flexibility analysis performed for FAR Case 93-2, Past 
Performance Information (60 FR 16718, March 31, 1995), has already 
addressed the effects on small businesses. However, an Initial 
Regulatory Flexibility Analysis has been performed for this proposed 
DFARS rule. Comments are invited from small businesses and other 
interested parties. Comments from small entities concerning the 
affected DFARS subparts will also be considered in accordance with 
Section 610 of the Act. Such comments must be submitted separately and 
cite DFARS Case 95-D715 in correspondence.

C. The Paperwork Reduction Act

    The proposed rule does not contain any information collection 
requirements which require the approval of Office of Management and 
Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 213, 214, 215, and 242

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, it is proposed that 48 CFR parts 213, 214, 215, and 242 
be amended as set forth below:
    1. The authority citation for 48 CFR parts 213, 214, 215, and 242 
continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 213--SIMPLIFIED ACQUISITION PROCEDURES

    2. The heading of Part 213 is revised to read as set forth above.
    3. Section 213.106-1 is added to read as follows:


213.106-1  Soliciting competition, evaluation of quotes, and award.

    (b)(1) Use of past performance information is not mandatory for 
solicitations less than $100,000; however, it is encouraged.

PART 214--SEALED BIDDING

    4. Section 214.201-8 is added to read as follows:


214.201-8  Price related factors.

    (a) An offeror's record of past performance may be used as an 
indication of foreseeable costs and delays and may be evaluated where 
these costs can be reduced to a price-related evaluation factor. For 
example, where a poor performance record requires a preaward survey or 
where a record of delivering nonconforming parts would require source 
inspection, and a preaward survey or source inspection would not 
otherwise be required, an evaluation factor covering those additional 
costs may be applied. The method by which these price-related factors 
will be determined and applied shall be included in the solicitation.
PART 215--CONTRACTING BY NEGOTIATION
    5. Section 215.605 is amended by redesignating paragraph (b) as 
paragraph (b)(2) and by adding paragraph (b)(1)(ii) to read as follows:
215.605  Evaluation factors.
    (b)(1)(ii) Notwithstanding FAR 15.605(b)(ii), past performance 
shall be evaluated in all competitively negotiated acquisitions in 
excess of $1 million issued on or after July 1, 1995, in excess of 
$500,000 issued on or after July 1, 1996, and in excess of $100,000 
issued on or after July 1, 1997. When past performance is evaluated, it 
should be a significant evaluation factor or significant subfactor. 
Although the use of past performance is not mandatory for solicitations 
less than $100,000, it is encouraged. Past performance information from 
contractor performance evaluations shall not be used in source 
selections until the requirements of 242.1503(b) have been met.
* * * * *
PART 242--CONTRACT ADMINISTRATION
    6. Subpart 242.15 is added to read as follows:

Subpart 242.15--Contractor Performance Information

Sec.
242.1502  Policy.
242.1503  Procedures.


242.1502  Policy.

    (a) Notwithstanding FAR 42.1502, contractor performance evaluations 
shall be prepared for all contracts in excess of $1 million effective 
July 1, 1995, and $100,000 effective July 1, 1996. For contracts 
exceeding 18 months, interim evaluations should be prepared annually.
    (S-70) Agencies shall prepare an evaluation of contractor 
performance including the following information:
    (1) Whether the report is a final or interim report;
    (2) What period the report covers;
    (3) The contractor's name, address, and telephone number;
    (4) The contract number, value, award date, and completion date;
    (5) The type of contract;
    (6) A description of the requirement;
    (7) An evaluation of the contractor's performance in the following 
areas, including a rating and supporting rationale:
    (i) Quality of Product or Service;

[[Page 57693]]

    (ii) Cost Control;
    (iii) Timeliness of Performance;
    (iv) Customer Satisfaction (Contracting/Business Relations);
    (v) Customer Satisfaction (End User/Business Relations); and
    (vi) Rater's Overall Assessment.
    (8) An evaluation of key contractor personnel for services and R&D 
contracts;
    (9) The evaluator's name, address, telephone number and dated 
signature;
    (10) Whether the contractor provided comments, rebuttals or 
additional information. If such information was provided, it shall be 
attached to the Government evaluation;
    (11) A resolution of contractor comments; and
    (12) The final review authority's name, address, phone number, and 
dated signature.
    (S-71) Evaluations completed in accordance with paragraph (S-70) of 
this section shall consider the following areas:
    (1) Quality of product or service. This includes the following 
aspects of performance:
    (i) Compliance with contract requirements;
    (ii) Accuracy of reports;
    (iii) Appropriateness of contractor personnel assigned to the 
contract; and
    (iv) Technical excellence of delivered supplies or services.
    (2) Cost Control. This includes the following aspects of 
performance:
    (i) Current, accurate, and complete billings;
    (ii) The relationship of negotiated cost to actuals;
    (iii) Cost containment initiatives; and
    (iv) The number and cause of change orders issued.
    (3) Timeliness of Performance. This includes the following aspects 
of performance:
    (i) Whether the contractor met interim milestones;
    (ii) Contractor's responsiveness to technical direction;
    (iii) Contractor's responsiveness to contract change orders and 
administrative requirements;
    (iv) Whether the contract was completed on time, including wrap-up 
and contract administration; and
    (v) Whether liquidated damages were assessed.
    (4) Business Relations/Customer Satisfaction. This includes the 
following aspects of performance:
    (i) Whether the contractor effectively managed the contract effort;
    (ii) How responsive the contractor was to contract requirements;
    (iii) How promptly the contractor notified the Government of 
problems;
    (iv) Whether the contractor was reasonable and cooperative;
    (v) How flexible the contractor was;
    (vi) Was the contractor proactive;
    (vii) How effective were contractor-recommended solutions; and
    (viii) Did the contractor effectively implement socio-economic 
programs, including compliance with requirements of the clause at FAR 
52.219-8, Utilization of Small, Small Disadvantaged and Women-Owned 
Small Business Concerns, and 52.219-9, Small, Small Disadvantaged and 
Women-Owned Small Business Subcontracting Plan.
    (S-72) The following adjectival ratings shall be used when rating 
each area described in paragraph (S-71):
    (1) Unsatisfactory.
    (i) Quality of Product or Service.
    Nonconformances are compromising the achievement of contract 
requirements, despite the use of Agency resources.
    (ii) Cost Control. Cost issues are compromising performance of 
contract requirements.
    (iii) Timeliness of Performance. Delays are compromising the 
achievement of contract requirements, despite the use of Agency 
resources.
    (iv) Business Relations Customer Satisfaction. Response to 
inquiries, technical service, and administrative issues is not 
effective and responsive.
    (2) Poor.
    (i) Quality of Product or Service. Nonconformances require major 
Agency resources to ensure achievement of contract requirements.
    (ii) Cost Control. Cost issues require major Agency resources to 
ensure achievement of contract requirements.
    (iii) Timeliness of Performance. Delays require major Agency 
resources to ensure achievement of contract requirements.
    (iv) Business Relations Customer Satisfaction. Response to 
inquiries, technical service, and administrative issues is marginally 
effective and responsive.
    (3) Fair.
    (i) Quality of Product or Service. Nonconformances require minor 
Agency resources to ensure achievement of contract requirements.
    (ii) Cost Control. Cost issues require minor Agency resources to 
ensure achievement of contract requirements.
    (iii) Timeliness of Performance. Delays require minor Agency 
resources to ensure achievement of contract requirements.
    (iv) Business Relations Customer Satisfaction. Response to 
inquiries, technical service, and administrative issues is somewhat 
effective and responsive.
    (4) Good.
    (i) Quality of Product or Service. Nonconformances do not impact 
achievement of contract requirements.
    (ii) Cost Control. Cost issues do not impact achievement of 
contract requirements.
    (iii) Timeliness of Performance. Delays do not impact achievement 
of contract requirements.
    (iv) Business Relations Customer Satisfaction. Response to 
inquiries, technical service, and administrative issues is usually 
effective and responsive.
    (5) Excellent.
    (i) Quality of Product or Service. There are no quality problems.
    (ii) Cost Control. There are no cost issues.
    (iii) Timeliness of Performance. There are no delays.
    (iv) Business Relations Customer Satisfaction. Response to 
inquiries, technical service, and administrative issues is effective 
and responsive.
    (6) Plus. The contractor has demonstrated an exceptional 
performance level in any of the four categories described in paragraph 
(S-71). It is expected that this rating will be used in those rare 
circumstances when contractor performance clearly exceeds the 
performance levels described as ``excellent.''


242.1503  Procedures.

    (a) The contracting officer will determine who provides input on 
the contractor performance evaluations. Where the contract has been 
delegated for administration, the cognizant ACO shall complete 
performance evaluations unless otherwise advised by the PCO.
    (b) (S-70) The agency preparing the performance evaluation shall be 
responsible for validating the past performance information.
    (S-71) If the contractor does not respond within the period 
specified, the data may be assumed to be accurate and may be used in 
source selections.
    (e) The date of completion of contract performance is the date of 
contract closeout.

[FR Doc. 95-28433 Filed 11-16-95; 8:45 am]
BILLING CODE 5000-04-M