第6章 CHAPTER 3

PRE-AWARD: OBTAINING

PAST PERFORMANCE

INFORMATION

“The solicitation … shall provide offerors an opportunity to identify past or current contracts … for efforts similar to the Government requirement.” FAR[27]

This chapter has two parts-one directed at government personnel and the other directed at contractor personnel. The first part addresses those things government personnel should do when obtaining past performance information for evaluation purposes in a competitive acquisition. The second part is directed at contractor personnel who will be involved in providing past performance information in response to a government solicitation.

FOR THE GOVERNMENT

Government personnel should direct their attention to the following areas when obtaining past performance information:

How to obtain past performance information

Verifying offeror's information

Conducting reference checks

Asking the right questions.

Obtaining Past Performance Information

The solicitation provides offerors with the opportunity to identify past or current federal, state, local government, and private contracts for the same or similar work.[28] Each contract listed should include the name of the contracting entity, contract number, dollar value, date of award and completion, a description of the work, and the name, phone number, and email address of at least one contact.

In addition, the RFP should encourage offerors to provide information on problems encountered on the identified contracts and the corrective action taken. Offerors should be allowed to provide information on predecessor companies, key personnel, and subcontractors that will perform major or critical aspects of the requirement when such information is relevant to the instant acquisition.

Particular attention should be given to how the offeror is to provide references. If you do not indicate the number of references to be provided, the number is up to the offerors. Some might provide a large number, and some might provide only a few. This might prove to be a problem when evaluating past performance.

OFPP guidance[29] suggests that offerors be required to provide references for five to ten relevant contracts, not more than three years old, to establish their past performance qualifications. There are, however, practical considerations that affect the number of references or the currency of those references, such as the following:

The solicitation should not ask for more references than you are prepared to check. If you expect a large number of responses, five to ten references from each offeror might exceed your ability to check them all. Although the Comptroller General has ruled that the source selection authority is not required to check all references, offerors will expect that any reference provided will be checked. Failure to check all references might generate protests. The agency will win the protest but lose a great deal of time responding to it.

Asking for five to ten references might adversely affect small businesses or newly formed businesses that have not had an opportunity to perform the requisite number of contracts that are the same as or similar to the work required. Even large businesses might have trouble in this area if the prospective contract is for supplies or services that are unique, innovative, or simply not often acquired. The number of references required should be realistic in relation to the kind of work required by the prospective contract. One way to avoid problems in this area is to ask for a minimum number of references and indicate that if more than the minimum number are provided, the government reserves the right to determine how many and which of those references will be checked. The minimum number should be that which the evaluation resources available can check efficiently.

Generally, the listed contracts should have been completed within a three-year period. The time period may be expanded for supplies or services not frequently acquired. When establishing a time period, consideration should be given to whether there have been changes in technology or methodology that might affect the relevance of older contracts. The time period should be realistic for the kinds of supplies or services being required.

Verifying Offeror's Information

While the other non-cost evaluation factors (e.g., technical excellence, management capability) are evaluated based on the information provided in the proposals, past performance is evaluated primarily on the findings of the reference checks done on the contracts listed by the offeror. The exception is that the solicitation authorizes the offeror to provide information on problems encountered and corrective actions taken on the contracts listed in the proposal. Any information on problems and corrective action must be verified when contacting the references provided.

Conducting Reference Checks

Reference checks are done only for listed contracts that meet the relevancy and currency test. However, if a federal contract listed by the offeror has been evaluated as required by FAR Subpart 42.15, there is no need to contact the reference listed in the solicitation. It is simply a matter of accessing the report card from the Past Performance Information Retrieval System (PPIRS).

Checking only the references provided by the offeror usually is not adequate because the offeror might not identify past contracts that had serious performance deficiencies. The agency's contract database should be searched because agencies are obligated to consider past performance information that is readily available. In addition, the Federal Procurement Data System-Next Generation (FPDS-NG)[30] provides information on all federal government procurement actions. FPDS-NG uses ezSearch, a text-based search engine that allows users to enter any element of a contract they are interested in (e.g., vendor name, agency name, dollar amount, scope). It is available to registered government users at www.fpds.gov.

Private-sector sources, such as subcontractors, suppliers, financial institutions, and commercial customers, may also be used if they can be identified (market survey information might be helpful here). When using private-sector sources, documentation should support any comments used in the evaluation. Documentation is particularly important when adverse comments are involved.

Surveys of end users might be useful if you can identify the appropriate end users. End users, however, are often difficult to identify for a specific contract. Generally, end user surveys are practicable only for supplies or services that were shipped or provided directly to the end users and can be connected to a specific contractor.

The purpose of a reference check is to obtain performance information with respect to the past performance factor and/or significant subfactors as described in the solicitation. Contact is made with the person or persons identified by the offeror for each of the current or past contracts listed in the proposal.

The initial contact should be made by telephone to explain the purpose of the inquiry. In some instances, it might be possible to conduct an interview by telephone. If for some reason a telephone interview is not possible, a questionnaire can be forwarded for the contact to complete.

One challenge with questionnaires is getting useful information. Getting a negative response (which is of greater interest) might be more of a problem than getting a positive response because the responder must expend more time and effort to explain why the offeror's past performance was deficient. You cannot accept “yes” or “no” responses to your questions when the response indicates poor performance; explanations are required.

An allegation of poor performance, particularly when in conflict with information from other sources, should be examined closely to determine the accuracy of the allegation. If it is accurate, is it likely to affect performance under the proposed contract?

Getting a positive response is not difficult, but for the response to be useful, it needs to be explained. The explanation will be important when distinguishing the quality of one offeror's past performance from that of another offeror.

Asking the Right Questions

The source selection authority should develop a list of questions to assess the offeror's performance regarding the quality of the product or service, timeliness, cost control, and business relations. It is suggested that the first question be a general assessment of the offeror's performance. This would be followed by specific questions tailored to the prospective acquisition. That is, the questions should focus on particular aspects of the four assessment areas that are of importance or emphasized in the prospective acquisition. The final question should concern problems encountered and the offeror's corrective action. The questions should be short and simple like the following examples:

If you had a choice, would you contract with this contractor again? If no, why not? If yes, does the contractor's performance have any particular performance strong points?

Did the products or services meet contractual requirements, particularly with respect to the quality provided?

Did the contractor make contractual and administrative deliveries on time? If not, why not, and what specific delivery dates were not met?

Did the contractor complete the effort within the budget? If not, were the cost growth or other cost control problems due to contractor inefficiency or lack of expertise? (NOTE-These questions do not apply to fixed-price contracts.)

Was the award amount or delivery schedule changed? If so, was the contractor cooperative and responsive in carrying out the changes?

Did the contractor demonstrate business-like concern for the customer?

If there were problems, did the contractor act promptly to resolve them? How effective was the contractor's corrective action?

FOR THE OFFERORS

This section is directed primarily at contractor personnel who will be involved in preparing the proposal in response to a government solicitation. It covers:

General considerations

Describing past performance in a proposal

Planning for contract performance.

General Considerations

An offeror should pay close attention to Sections L and M of the RFP. Section L indicates specific past performance information that the offeror is to submit in the proposal.[31] Section M describes the evaluation criteria that will be used to rate the offeror's past performance.[32]

Section L asks offerors to identify past or current contracts similar to the RFP's requirement. Section L also authorizes offerors to provide information on problems encountered on the identified contracts and the offeror's corrective actions. It may specify a number or range of contracts to be identified, further elaborate on its definition of “similar” contracts or relevancy, and set currency limitations.

Section M describes the past performance factor and/or subfactors that will be used in the acquisition. The factor and/or subfactors are the performance criteria that will be used by the source selection authority in evaluating the offeror's past performance information.

Contractors should develop a strategy to deal with the increased emphasis given to past performance as a source selection factor. Such a strategy would involve how to submit past performance information in the proposal, respond to negative past performance reports during the evaluation of proposals (addressed in Chapter 5), identify actions to take during contract performance (addressed in Chapter 9), respond to the annual and final past performance evaluations (addressed in Chapter 10), and use past performance information to the contractor's competitive advantage (addressed in Chapter 13).

Preparing the Proposal

The offeror should check the solicitation closely to ensure that the proposal responds to all the solicitation requirements, particularly with respect to past performance information. The offeror bears the responsibility to provide enough information to enable the government to evaluate its proposal. A failure to comply with all solicitation requirements will result in the downgrading and possible rejection of the proposal, as shown in the GAO decision in Menendez-Donnel & Associates, B-286599, January 16, 2001, which is summarized in Example 3.1.

Example 3.1-Failure to comply with RFP instructions (#1).

Issue: The RFP required offerors to provide information on three prior similar contracts for the prime contractor and each key subcontractor. The protestor's proposal failed to provide information for its key subcontractor, claiming that a neutral rating should have been assigned.

Resolution: The Comptroller General denied the protest, stating:

Since an agency's evaluation is dependent upon the information furnished in a proposal, it is the offeror's burden to submit an adequately written proposal for the agency to evaluate, especially where, as here, the offeror is specifically on notice that the agency intends to make award based on initial proposals without discussions. An agency may reject a proposal for informational deficiencies that prevent the agency from fully evaluating the proposal.[33]

We note that, since the record confirms that the prior contracts MDA listed to establish its past performance were not similar to the current requirement, the agency reasonably determined that MDA's prior contracts did not provide a basis for assessing the firm's past performance. However, it appears this aspect of MDA's past performance warranted a neutral, rather than an unacceptable rating; under FAR 15.305(a)(2)(iv), where an offeror does not have a record of relevant past performance, the offeror may not be evaluated either favorably or unfavorably. On the other hand, even if this were the case, and even if we also agreed with MDA that the agency should have clarified its experience or obtained additional information from its own records, as discussed below, GSA reasonably rated the proposal unacceptable based on MDA's failure to establish adequate experience and past performance for its subcontractors and key employees.

To the extent MDA contends that GSA was required to assign a neutral rating to its proposal based on the absence of information relating to its key subcontractors, we disagree. Although FAR 15.305(a)(2)(iv) requires an agency to assign a neutral rating where past performance information is not “available,” here, the protester's proposal represented that its proposed subcontractors are engaged in projects that would illustrate their performance capability. The information thus was available, but MDA chose not to present the information in its proposal, in direct contravention of the terms of the RFP. In our view, an offeror cannot simply choose to withhold past performance information-and thereby obtain a neutral rating-where the solicitation expressly requires that the information be furnished, and where the information is readily available to the offeror.

For an abridged version of the GAO decision in Menendez-Donnel & Associates, see Appendix B, Example 3.1.

Example 3.1 presents several points of interest to an offeror preparing to submit a proposal to the government. First and foremost, if the RFP requires the submission of certain information, the information must be submitted in complete detail, as set forth in the RFP. This is particularly true with respect to past performance information because the government must be able to verify this information with the contracting entities involved. In this case, MDA chose not to provide the required information about its key subcontractors. While a neutral rating is appropriate where past performance information is not available, the required information was, in fact, readily available to MDA. Therefore, because subcontracting was a major consideration in this evaluation, the failure to provide the required information was enough to find the proposal technically unacceptable.

The importance of complying with RFP requirements is again demonstrated by the GAO decision in Boland Well Systems, Inc., B-287030, March 7, 2001, which is summarized in Example 3.2.

Example 3.2-Failure to comply with RFP instructions (#2).

Issue: Boland Well Systems, Inc., alleged that the Air Force did not properly consider its past performance. Boland received a “neutral/unknown confidence” rating based on its failure to submit in its proposal evidence that it had performed contracts relevant to the solicited effort.

Resolution: The Comptroller General denied the protest, stating:

Boland submitted the overall low price. While the ratings Boland received from its references ranged from satisfactory to very good, all of the responses involved contracts that were for landscaping projects that were valued at significantly less than the government estimate. Since Boland's prior contracts for landscaping work showed no relevance to the gate replacement work required by the solicitation, Boland's proposal received a rating of neutral/unknown confidence. Award was made to another offeror who had a slightly higher price but had received a past performance rating of exceptional/high confidence.

The record shows that the prior contracts listed by Boland to establish past performance were all landscaping projects. In our view, the agency reasonably concluded that the landscaping contracts were not relevant to the current requirement for gate replacements. In sum, Boland simply did not provide in its proposal or at any time during the conduct of the procurement evidence establishing that the company had relevant past performance. In accordance with the solicitation, the agency performed a performance/price tradeoff and determined that the higher priced proposal of IRD, which had a better performance risk rating than the protester, represented the best value to the government.

For an abridged version of the GAO decision in Boland Well Systems, Inc., see Appendix B, Example 3.2.

Offerors must pay attention to what the RFP says about the information that must be provided with respect to past performance. Here the RFP clearly stated that award would be made based on a performance/price tradeoff and that offerors were required to submit detailed past performance information on contracts that were relevant to the proposed effort. A failure to submit relevant information would result in a neutral/unknown confidence rating. The past performance evaluation must be conducted as set forth in the RFP and based on the information required by the RFP. Boland had failed to provide relevant information, and it received the appropriate rating.

The fact that the requirement was not complex and that the simplicity of the effort should have been given considerable weight was not germane to the agency's decision. Based on the RFP requirements, Boland should have noted this lack of experience in its proposal and explained how it still had the ability to perform the requirement. Boland would probably not have received the award in any event because of the past performance/price tradeoff. Its slightly lower price would not have offset its lack of experience against the awardee's exceptional past performance rating on the same type of work.

If the solicitation does not clearly define these factors, the offeror should obtain clarification from the contracting officer before the time set for receipt of proposals. This is particularly important if it appears that prior experience and past performance have been combined into a single evaluation factor and whether they will be evaluated separately or together is not clear. If this issue is not cleared up before the time set for the receipt of proposals, the offeror cannot complain (protest) about it later.

Generally, the solicitation should indicate how many referenced contracts are required. It is not a good idea to provide more referenced contracts than required unless the RFP cites only a minimum requirement. Be aware, however, that the government is not required to check all the referenced contracts listed.

The government may use other sources (e.g., agency records, the records of other agencies, contractor performance reports, queries to suppliers or other business contacts) to check past performance, so not referencing a problem contract does not ensure that the contract problems will not come up. If there were problems with a referenced contract, the offeror should identify the problems and explain the corrective action taken. This is necessary to show that previous problems will not recur.

If the past performance of a subcontractor is pertinent, such as when a subcontractor will perform a significant part of the contract work, the offeror may use information about the subcontractor's past performance but must explain the relationship and how this information applies to the prospective contract.

A newly formed firm or a firm lacking relevant performance history may cite the past performance of its key personnel on other contracts as a substitute for the firm's lack of past performance history. However, the proposal must show how such personnel contributed to the success of the referenced contracts and how the referenced contracts relate to the prospective effort.

The past performance of other firms may be cited if they are team members or affiliates, but only if they will be significantly involved in the performance of the prospective contract. It is important to explain the relationship (shared management, workforce, facilities, or other resources that would affect contract performance) in order to demonstrate the extent of the other firm's involvement.

If previous work has resulted in awards or letters of commendation, reference should be made to them in the proposal. Such information can make a difference in the evaluation of past performance, particularly in tradeoff determinations and the final source selection.

What is contained in the initial proposal may be the only chance an offeror gets to explain past problems, particularly if award is to be made without discussions. When award is to be made without discussions, the government may (but is not required to) provide an opportunity to the offeror to clarify “adverse past performance information to which it has not previously had an opportunity to respond.”[34] Generally, unless there is a reason to question the validity of the past performance information, the government chooses not to permit clarification. It is best, therefore, to explain past problems fully in your initial proposal submission.

If discussions are to be held, the government is required to permit offerors to address adverse past performance information to which the offeror has not previously had an opportunity to respond if the past performance information is a determining factor preventing the offeror from being placed in the competitive range. Note, however, that in a comparative assessment, past performance might not be the most heavily weighted evaluation factor. Where past performance problems only contributed to, but were not necessarily the determining factor in, a low overall rating, the government may not be required to permit the offeror to rebut the past performance evaluation, particularly if the past performance information was not adverse but simply not as highly rated as that of other offerors–all the more reason to ensure that the proposal provides clear, concise, candid, and complete past performance information.

It should be noted here that the phrase “adverse past performance information to which the offeror has not previously had an opportunity to respond”[35] generally excludes instances where a contractor has been afforded an opportunity to comment on the evaluation of its contract performance. The opportunity is given to a contractor prior to the preparation of a final contractor performance evaluation. Contractors would be well advised to retain any correspondence relating to such evaluations and be prepared to explain in the initial proposal how any past problems have been corrected and will not recur under the prospective contract.

Contracts that have been evaluated in accordance with FAR 42.15 are submitted to PPIRS and are available to all agencies. Those contracts, whether referenced in the proposal or not, are easily accessible when needed in source selection. Unlike the contracts listed without performance evaluations, a reference check has to be done. Many times there is no response to those requests. GAO's decision in Guam Shipyard, B-311321; B-311321.2, June 9, 2008, summarized in Example 3.3, shows how the evaluation of an offeror's proposal may depend on one performance evaluation record accessed from PPIRS.

Example 3.3-PPIRS accessible to all agencies.

Issue: Guam Shipyard (Guam) protested the reasonableness of the agency's evaluation of proposals and award made to Gulf Copper, which received a higher past performance rating but offered a higher price than Guam.

Resolution: Guam's proposal was evaluated as marginal based on an unfavorable Contract Performance Assessment Report (CPAR) in PPIRS. This was the only past performance information considered by the source selection evaluators team. Guam referenced two other contracts in its proposal, but neither contact responded to the agency's request for information.

The CPAR concerned an ongoing Guam contract with the Navy for similar work. Guam had not provided information on problems with this current contract when it listed the contract in the proposal, nor had Guam rebutted the allegations of poor performance when it had the opportunity to do so before the CPAR was finalized.

The GAO denied the protest, stating:

An agency is only required to use reasonable effort to contact an offeror's references, and is not required to make multiple attempts to contact a firm's past performance references. Here, the agency points out that the past performance reference listed by the protester failed to respond to the agency's email inquiry for relevant survey information. While Guam suggests that proof of the reference's receipt of the email message is necessary to show a reasonable attempt at contacting the reference, the firm provides no support for its contention. Rather, in light of the RFP's emphasis on the importance of the offeror providing reliable contact information (including, as was used here, email addresses) and ensuring cooperation from its references, we think the agency's email inquiry was an adequate effort to contact the reference; the failure of the reference to respond does not show that the agency's effort was inadequate (particularly in view of Guam's apparent failure to ensure, or, at a minimum, encourage its reference to cooperate) or that the past performance evaluation was improper.

For an abridged version of the GAO decision in Guam Shipyard, see Appendix B, Example 3.3.

The best way to counter negative past performance information already in PPIRS is for the offeror to demonstrate that it learned from the experience and knows how to deal with the problem. If a contractor had performance problems on a contract, the contractor should take advantage of the opportunity to comment on any adverse performance before the evaluation report is finalized. The comments must explain the specific corrective actions taken or the reasons why the performance was not satisfactory. Generalized comments or vague promises are not acceptable. A response at the time of the performance evaluation might be the offeror's only chance to respond to a negative evaluation because the government is not obligated to permit further comments in a later acquisition.

Any government communication during contract performance about less-than-satisfactory performance should receive a prompt and complete response. Offerors should retain such communications because they might be needed for future proposals to demonstrate how problems were corrected. This is particularly important when the RFP indicates that award will be made without discussions. Note, however, that the comments must stand alone; additional non-contemporaneous comments or justifications may be submitted but will probably be accorded little weight.

Planning for Contract Performance

Past performance will play an ever-increasing role in a contractor's ability to win future contracts. Although not part of the proposal, contract planning should consider what administrative actions should be taken to improve future evaluations of past performance.

If there are problems during contract performance and there is disagreement about factual matters, contemporaneous records of the problem are often determinative. One way to defend a position is to keep an internal record or log of performance problems and what was done to correct them, particularly of any event or activity that the government might view unfavorably.

Because the government might not always reveal to the contractor what it considers to be problems, it is wise to keep a contemporaneous record of all contract activity. This includes delays, conformance problems, contract changes, and any disagreements with government representatives. Contractors should record the event, the participants, the problem, and what action was or will be taken. The record should be kept up-to-date, particularly with respect to prospective actions and the final results. The contractor should, however, check with legal counsel to determine how to do this if the proposed contract will include FAR clause 52.215-2, Audit and Records-Negotiation. This clause gives the government the right to examine certain records, and legal counsel will want some input as to how, or whether, such records are kept.

It is a good practice to keep a record of performance feedback from government representatives during contract execution. If the feedback is not in writing, at least make a note of the feedback for your records. Recording positive feedback is particularly important because such information usually will be considered a strong point in the evaluation of past performance. Negative feedback also should be recorded to ensure that action is taken to resolve the problem.

Contractors also might consider developing a past performance file or database similar to that of government agencies. This would involve developing a past performance questionnaire and requesting that the contracting agency complete it at the end of contract performance. The contractor then can use copies of the completed questionnaires as past performance information for future procurements. This has the advantage of providing contemporaneous past performance information that might counter different information provided by the agency in response to a later past performance questionnaire by a different procuring agency.

Such a file would have proved useful to FC Construction Company[36] in its protest. An agency either erroneously or intentionally misrepresented telephonic responses to queries about FC's past performance. FC alleged that the responses rated its performance higher than that recorded by the agency. FC's protest on this point was denied when it was unable to produce the individuals in question for a GAO conference. FC would not have had this problem if it could have produced contemporaneous documentation of its past performance.

As noted earlier, all federal agencies are required to complete a contractor performance report at the end of contract performance and provide a copy to the contractor. A contractor's request for the completion of a past performance questionnaire would be a subtle reminder to the contracting agency of the requirement to perform an evaluation on completion of activities.

During contract performance, a contractor should respond quickly and positively to government requirements or inquiries. The government is the customer. A contractor should not construe this as a surrender of its contract rights but as a show of respect for the customer.

If problems arise during contract performance, they need to be addressed immediately. If the government finds fault with contract performance and is correct, the problem should be fixed promptly. If the government is not correct, an explanation of why the government's position is incorrect should be accompanied by suggestions on how the misunderstanding might be resolved. When addressing performance problems, specifics, not generalizations, are needed. Such correspondence may be particularly helpful when addressing past performance problems in future proposals.

Despite the need to be cooperative and sensitive to the customer's needs, the contractor should not surrender its contractual rights, such as making contract claims, questioning specifications, or requesting contract changes. The Comptroller General has ruled that such actions cannot be cited as adverse past performance during the evaluation of past performance.

It is virtually impossible to have contract performance that is completely problem-free. Contract problems can be minimized, however, through effective communication with the government. Doing so has become even more important with the increasing importance of past performance evaluations in awarding future contracts.

Responding to adverse past performance information is critical, whether it comes up during the solicitation process or at the end of contract performance. Generally, a contractor will get only one chance to respond. The response to such information must be clear, concise, and, most of all, convincing. The fact that a contractor does not agree with the adverse findings is not sufficient. It is a contractor's responsibility to successfully rebut adverse past performance information, and the agency's perception of adverse past performance will prevail if a contractor fails to respond fully to the adverse information.

Chapter 5 discusses responding to adverse past performance information during the solicitation process in greater detail.