Contractor Performance: Actions Taken to Improve Reporting of Past Performance Information
Published: 2014-08-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Having complete, timely, and accurate information on contractor performance allows officials responsible for awarding new federal contracts to make informed decisions. Agencies generally are required to document contractor performance on contracts or orders exceeding certain dollar thresholds.
Section 853 of the National Defense Authorization Act for Fiscal Year 2013 required the development of a strategy to ensure that timely, accurate, and complete information on contractor performance is included in past performance databases. The act also required a change to the timeframes allowed for contractors to provide comments, rebuttals, or additional information pertaining to past performance information. The act required GAO to report on the actions taken in response to these requirements. For this report, GAO identified (1) the OFPP strategy to improve the number and quality of contractor past performance evaluations and implement provisions of the act, and (2) changes in the compliance rates for required performance evaluations from April 2013 to April 2014 for selected agencies. GAO reviewed OFPP memos and reports, government-wide guidance, and recent changes to the Federal Acquisition Regulation and interviewed an OFPP official. GAO also reviewed past performance reporting compliance data for 2013 and 2014.
GAO is not making any recommendations. OFPP concurred with GAO's findings.
section_title: What GAO Found
paragraphs: The Office of Federal Procurement Policy's (OFPP) strategy to improve the reporting of past performance information relies on increased oversight and enhancements to guidance and acquisition regulations. Since 2009, OFPP has taken several actions to increase the number and quality of past performance submissions available to source selection officials, including:
emphasizing reporting requirements through memos to agency officials;
assessing and reporting on the level of compliance and quality of evaluations;
directing the development of a compliance tracking tool;
setting performance targets for certain agencies;
directing the consolidation of systems for entering past performance information; and
developing government-wide past performance guidance.
To implement provisions of the act, OFPP and the Federal Acquisition Regulatory Council (FAR Council) worked to enhance requirements for assigning responsibility and accountability; implement standards for complete evaluations; and ensure submissions are consistent with award fee evaluations. Recently, OFPP and the FAR Council revised the timelines for the contractor comment process in accordance with the 2013 statutory requirement.
Although agencies generally have improved their level of compliance with past performance reporting requirements, the rate of compliance varies widely by agency and most have not met OFPP targets. For the top 10 agencies, based on the number of contracts requiring an evaluation, the compliance rate ranged from 13 to 83 percent as of April 2014.
According to an OFPP official, some agencies placed greater emphasis on documenting contractor performance, but workforce shortages and work priorities may hinder better compliance. The official said that OFPP plans to continue its oversight and provide additional training and guidance.

section_title: Letter
paragraphs: Government agencies rely on contractors to perform a broad array of  activities needed to meet their missions. Therefore, complete and timely  information on contractors’ past performance is critical to ensure the  government does business only with companies that deliver quality goods  and services on time and within budget. The Federal Acquisition  Regulation (FAR) generally requires agencies to document contractor  performance on contracts or orders that exceed certain dollar thresholds  and to make that information available to other agencies through a shared  government-wide database. We reported in 2009, however, that there  was little information in the past performance database to share. Agency  officials noted at the time that a low priority for completing evaluations  and a lack of system tools and metrics to monitor compliance made it  difficult for managers to ensure timely completion of contractor  performance evaluations.
Pub. L. No. 112-239. (OFPP) in the Office of Management and Budget, to implement the  required provisions, including the extent to which the actions achieved the  section’s objectives. For this report, we identified (1) OFPP’s strategy to  improve the number and quality of contractor past performance  evaluations and implement provisions of section 853 of the NDAA for  Fiscal Year 2013, and (2) changes in the compliance rates for required  performance evaluations from April 2013 to April 2014 for selected  agencies.
To identify government-wide actions taken or planned to improve the  number and quality of contractor past performance evaluations and  implement provisions of the NDAA for Fiscal Year 2013, we reviewed  OFPP memoranda and reports to agency senior procurement executives  related to documenting contractor performance as well as government- wide guidance and recent changes to the FAR related to documenting  contractor performance and revising the contractor comment process.  See Appendix I for a listing of OFPP past performance policy guidance  and past performance related FAR cases. We also interviewed an OFPP  official on actions taken or planned and interviewed officials at DOD, the  largest procuring agency, on their actions taken or planned. To identify  the changes in compliance rates for required performance evaluations for  selected agencies, we reviewed compliance metrics from the Past  Performance Information Retrieval System (PPIRS) as of April 2014 and  compared them to April 2013 metrics. We identified changes in the  compliance rates for the top 10 agencies based on number of evaluations  due as of April 2014. To assess the reliability of these data, we reviewed  system documentation and the programs used to generate the  compliance metrics, and interviewed officials who manage the system.
We found these data to be sufficiently reliable for the purpose of this  report.
We conducted this performance audit from June 2014 to August 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: When selecting contractors, the FAR generally requires agencies to  consider past performance as a factor in most competitive procurements.
During source selection, contracting officials often rely on various sources  of past performance information, such as the prospective contractor’s  performance on prior government or industry contracts for efforts similar  to the government’s requirements, and the past performance information  housed in the government-wide PPIRS database.
FAR § 42.1502(a) and (b). Currently, the dollar threshold for simplified acquisitions, with  limited exceptions, is $150,000. FAR § 2.101. The FAR has separate assessment  thresholds of $650,000 and $30,000 for construction and architect-engineer services  contracts respectively. FAR § 42.1502(e) and (f).
Navy, the system incorporates processes and procedures for drafting and  finalizing evaluations, which are described in the CPARS Guide. In May  2010, OFPP designated CPARS as the single government-wide system  for entering evaluations and by October 2010 all agencies had  transitioned to using CPARS.
In completing past performance evaluations, the assessing official rates  the contractor on various elements such as quality of the product or  service, schedule, cost control, management, and small business  utilization. For each applicable rating element, the assessing official  determines a rating based on definitions from the CPARS Guide that  generally relates to how well the contractor met the contract requirements  and responded to problems. In addition, for each rating element, a  narrative is to provide support for the rating assigned.
Once draft evaluations have been completed by the assessing official, the  contractor is notified that the evaluation is available for review and  comment through CPARS. After receiving and reviewing a contractor’s  comments and any additional information, the assessing official may  revise the evaluation and supporting narrative. If there is disagreement  with the evaluation, the reviewing official—generally a government official  at a level above the contracting officer—will review and finalize the  evaluation.
Section 806 of the National Defense Authorization Act (NDAA) for Fiscal  Year 2012 required DOD to develop a strategy to ensure that evaluations  in past performance databases used for making source selection  decisions are complete, timely, and accurate.process was also to be revised so that contractor past performance  evaluations are posted to the databases used for source selection  decisions no more than 14 days after the performance information is  provided to the contractor. In June 2013, we reported on the status of   Its contractor comment  DOD’s actions to improve the quality and timeliness of past performance  information and implement provisions of the NDAA for Fiscal Year 2012.
section_title: OFPP’s Past Performance Strategy Relies on Enhanced Oversight and Guidance and Revised Acquisition Regulations
paragraphs: OFPP’s strategy to improve past performance information and respond to  section 853 of the NDAA for Fiscal Year 2013 is to increase oversight of  contractor performance evaluations, develop government-wide past  performance guidance, and revise the FAR. Since 2009, OFPP has taken  a number of actions, in conjunction with other organizations, to improve  the amount and quality of past performance information available,  including emphasizing reporting requirements; assessing the level of  compliance and quality of evaluations; developing a compliance tracking  tool; setting agency performance targets; consolidating systems used to  enter past performance information; and developing government-wide  past performance guidance. In addition, OFPP worked with the FAR  Council to revise the FAR to implement provisions of the NDAAs for  Fiscal Years 2012 and 2013 related to assigning responsibility and  accountability; implementing standards for complete evaluations; and  ensuring submissions are consistent with award fee evaluations.  Revisions by OFPP and the FAR Council to the timing of the contractor  comment process in accordance with the acts became effective in July  2014.
subsections: section_title: Increased Oversight of Past Performance Evaluations
paragraphs: In 2009, the Deputy Administrator of OFPP issued a memorandum to  Chief Acquisition Officers and Senior Procurement Executives  emphasizing changes to the FAR such as submitting contractor  performance into PPIRS and identifying agency officials who must  prepare such evaluations. In addition, the memo outlined actions that  agency officials must take to help implement these practices. OFPP also  announced plans to conduct regular compliance assessments and quality  reviews to ensure that agencies submit timely performance information to  PPIRS on required contracts, and provide clear, comprehensive, and  constructive information useful for making future contract award  decisions.
In early 2011, an OFPP review highlighted the need to improve the  quantity and quality of information in PPIRS. To see how well agencies  managed their efforts to improve submission of past performance  evaluations, OFPP assessed the compliance with reporting requirements  and the quality of evaluations for the ten agencies that do the most  contracting:
OFPP found that agencies generally did not meet the requirement to  evaluate contractor performance. OFPP’s comparison of data from  the Federal Procurement Data System-Next Generation and PPIRS  indicated that past performance evaluations were completed for only a  small percentage of contracts requiring an evaluation, especially in  civilian agencies.
To assess the quality of the evaluations, OFPP reviewed a sample to  see how well various rating elements were addressed. They found the  evaluations generally lacked sufficient information—such as details  about how the contractor exceeded expectations or corrected poor  performance— to support the rating, or did not include a rating for all  performance areas.
To improve the collection of contractor past performance information,  agencies were asked to review their past performance reporting  guidance to ensure it contained key characteristics and to improve  management controls by using several strategies to improve  compliance and increase the quality of the evaluations.
To increase management oversight of contractor performance  evaluations, OFPP worked with the PPIRS program office to develop  a compliance tracking tool within PPIRS for measuring and managing  agency reporting efforts. This was made available to all agencies in  early 2011. The compliance tool allows managers to monitor  compliance at the department, agency, or contracting office level. In  addition, the tool allows agency officials to identify the compliance of  specific contracts or orders that meet the reporting criteria.
In March 2013, OFPP issued a policy memo to establish annual past  performance reporting compliance targets for Chief Financial Officer  (CFO) Act agencies. In establishing these targets, OFPP reviewed the  compliance rates of agencies and found that the level of compliance  varied widely. In order to make the compliance targets realistic and  achievable, OFPP set differing fiscal year 2013 and 2014 targets by  agency based on the agency’s level of compliance at the end of fiscal  year 2012, with the expectation that all agencies will reach full compliance  by the end of fiscal year 2015, as shown in table 1.
To assist CFO Act agencies in meeting these annual targets, the policy  memo required that all of them establish their past performance reporting  baselines, and set aggressive quarterly targets that reflect a strategy for  meeting the annual performance targets. The memo also highlighted  training opportunities for agencies’ acquisition workforces on  documenting contractor performance.
section_title: Government-Wide Past Performance Guidance and Revisions to the FAR Address Statutory Requirements
paragraphs: OFPP has also sought to improve contractor performance information  and implement provisions of the NDAA for Fiscal Year 2013 by working  with the General Services Administration’s Integrated Award  Environment, the CPARS program office, and the FAR Council to  consolidate systems for entering past performance information and to  develop government-wide past performance guidance, enhance FAR  requirements, and change the contractor comment process. To  standardize the past performance documentation process, the OFPP  Administrator identified CPARS as the government-wide system for  collecting contractor performance information, and by October 2010  agencies using other systems transitioned to CPARS. We previously  reported that the various systems used to collect past performance  information and the lack of standardized evaluation factors and rating  scales limited the usefulness of the information in PPIRS. Because the  CPARS Policy Guide was specific to DOD, the OFPP worked with the  Integrated Award Environment, the CPARS program office, and an  interagency working group to update the guide. A government-wide  CPARS Guide was released in November 2012. In addition, OFPP  worked with the FAR Council to revise the FAR in September 2013 to  enhance various elements of documenting contractor performance and  implement provisions of the NDAA for Fiscal Year 2013 and the NDAA for  Fiscal Year 2012. The FAR was revised and the CPARS Guide was  updated to implement these acts as follows:
Standards for timeliness: The FAR does not include a timeframe for  completing evaluations. However, the CPARS Guide includes a  standard that evaluations should be completed within 120 days after  the end of the evaluation period.
Standards for completeness: Evaluation factors for each  assessment must include, at a minimum: quality of product or service;  cost control (where applicable); schedule/timeliness; management or  business relations; and small business subcontracting (where  applicable), and other (for example, late payments or nonpayment to  subcontractors or tax delinquency).
Assigning responsibility for completeness of evaluations: The  requirement that agency procedures identify roles and responsibilities  was expanded to include preparing and reviewing evaluations. Also,  the FAR now provides a default that the contracting officer is  responsible for completing evaluations if agency procedures do not  specify that role.
Management accountability: Agencies are required to evaluate  compliance and assign responsibility and management accountability  for completeness of performance submissions.
Ensuring past performance submissions are consistent with  award fee evaluations: Award and incentive fee evaluations and  adjectival ratings are to be included as part of the past performance  evaluations.
OFPP, in conjunction with the FAR Council, recently implemented  provisions of the acts related to changing the timing for obtaining  contractor comments. Previously, contractors were allowed a minimum of  30 days to provide comments, rebuttals, or additional information. On  May 30, 2014, the final rule changing the contractor comment process  was issued with an effective date of July 1, 2014. The rule provides that  contractors will have no more than 14 days from the date of notification of  the availability of the evaluation to provide comments, rebuttals, or other  information before the evaluation is posted to PPIRS, where it is available  government-wide for source selection purposes for 3 years after the  contract performance completion date.this deadline, its comments will be added to the evaluation after it has  moved into PPIRS, as well as any agency review of the comments.
section_title: Compliance with the Reporting Requirement Varies Greatly by Agency
paragraphs: Although agencies have generally improved their level of compliance with  the reporting requirements over the last year, that rate varies greatly by  agency and most have not met the targets set by OFPP. As shown in  table 2, all of the top 10 agencies, based on number of contracts or  orders with an evaluation due in PPIRS, showed improvement in  reporting compliance from 2013 to 2014, but the compliance rate varied  from 13 percent to 83 percent as of April 2014. According to OFPP’s  annual reporting performance targets, as shown in table 1, all CFO Act  agencies should have been at least 65 percent compliant by the end of  fiscal year 2013, but only two of the top 10 agencies were above 65  percent compliance as of April 2014.
According to an OFPP official, some agencies placed greater emphasis  on improving timely reporting and have increased their management  oversight, issued guidance, diligently monitored compliance, and  frequently conduct internal meetings with management and accountable  staff about reporting activity and responsibilities. However, the official  noted that some agencies report workforce shortages, work priorities, and  time constraints as hindering better compliance. Some contracting  officers also reported that they had difficulty in obtaining timely feedback  from other parts of the acquisition workforce so that they could complete  the evaluation due to shifting workloads, retirements, and relocations.
The OFPP official stated the office plans to continue its efforts to improve  past performance information and strengthen reporting compliance, by  taking the following actions:       collaborating with agency senior procurement executives to increase  management oversight and leadership; working with the FAR Council on the development of additional  regulatory guidance, as necessary, to standardize reporting practices  and improve agency consideration of past performance information; directing the Federal Acquisition Institute to develop useful training  aids to ensure agencies know how to consider performance  information prior to contract award and rate a contractor's  performance during the post-award process; overseeing the General Services Administration’s Integrated Award  Environment on system enhancements to ensure agencies have a  practical reporting tool with useful performance metrics to manage  and monitor not only reporting compliance but also quality reporting of  performance information; and  conducting outreach with internal and external stakeholders to garner  their thoughts on ways to improve past performance information  reporting.
section_title: Agency Comments
paragraphs: We are not making recommendations in this report. We requested  comments on a draft of this report from OFPP and DOD. On July 24,  2014, an OFPP Procurement Policy Analyst provided comments by e- mail. OFPP concurred with the findings of the draft report, and provided  technical comments, which we incorporated as appropriate. DOD also  provided technical comments by e-mail, which we incorporated as  appropriate.
We are sending this report to appropriate congressional committees, the  Director of the Office of Management and Budget, the Secretary of  Defense, and other interested parties. The report will also be available at  no charge at the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-4841 or woodsw@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. LaTonya Miller, Assistant Director; Julia  Kennon; Robert Swierczek; Bradley Terry; and Alyssa Weir made key  contributions to this report.
section_title: Appendix I: Past Performance Policy Guidance and Federal Acquisition Regulation (FAR) Cases
subsections: section_title: Office of Federal Procurement Policy (OFPP) Past Performance Policy Guidance
paragraphs: Over the past five years, OFPP has issued additional policy guidance to  strengthen agency use of past performance information and improve  agency reporting compliance and documentation.
Making Better Use of Contractor Performance Information (July 10,  2014): Enhances agencies’ use of performance information when making  source selection decisions on high-risk programs, major acquisitions, and  other complex contract actions by directing agencies to conduct additional  research and outreach to make more informed decisions, including  obtaining as much relevant and recent performance information about a  contractor’s performance beyond what is in the Past Performance  Information Retrieval System (PPIRS).   http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/ma king-better-use-of-contractor-performance-information.pdf.
Improving the Collection and Use of Information about Contractor  Performance and Integrity (March 6, 2013): Requested agencies to: (1)  establish a baseline for reporting compliance, (2) set aggressive  performance targets that agencies can use to monitor and measure  reporting compliance, and (3) ensure the workforce is trained to properly  report and use this information to improve the collection and use of  performance and integrity information.  http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/imp roving-the-collection-and-use-of-information-about-contractor- performance-and-integrity.pdf.
Improving Contractor Past Performance Assessments: Summary of  the Office of Federal Procurement Policy's Review, and Strategies  for Improvement (January 21, 2011): Included OFPP’s initial  assessment of agencies’ reporting of contractor performance information  and additional steps and strategies for improving the collection of past  performance information.  http://www.whitehouse.gov/sites/default/files/omb/procurement/contract_p erf/PastPerformanceMemo-21-Jan-2011.pdf.
Improving the Use of Contractor Performance Information (July 29,  2009): Described new FAR requirements to strengthen the use of  contractor performance information, included agency management  responsibilities to support robust implementation, and established OFPP’s  review process for evaluating agencies’ reporting of contractor  performance information.  http://www.whitehouse.gov/sites/default/files/omb/assets/procurement/im proving_use_of_contractor_perf_info.pdf.
section_title: Recent Past Performance Related FAR Cases
paragraphs: The FAR Council, chaired by the Administrator of OFPP, has recently  amended the FAR to strengthen the collection of contractor past  performance information, including:  FAR Case 2012-028, Contractor Comment Period, Past Performance  Evaluations: Implements section 806(c) the National Defense  Authorization Act (NDAA) for Fiscal Year 2012, Pub. L. No. 112-81 (2011)  and section 853(c) of the NDAA for Fiscal Year 2013, Pub. L. No. 112- 239. The final rule provides that contractors will have no more than 14  days from the date of notification of the availability of the evaluation to  provide comments, rebuttals, or other information before the evaluation is  posted to PPIRS. The final rule was published in the Federal Register on  May 30, 2014, at 79 Fed. Reg. 31,197, and was effective July 1, 2014.
FAR Case 2012-009, Documenting Contractor Performance:  Implements parts of section 806 of NDAA for Fiscal Year 2012, Pub. L.  No. 112-81, and establishes standards of completeness of past  performance evaluations, strengthens assignment of responsibility and  management accountability for submitting assessments, and requires that  past performance submissions include incentive/award fee information,  where appropriate. This rule also incorporates certain requirements from  section 853 of the NDAA for Fiscal Year 2013, Pub. L. No. 112-239.  This  final rule was published in the Federal Register on August 1, 2013, at 78  Fed. Reg. 46,783 and was effective on September 3, 2013.
FAR Cases 2008-016, Termination for Default Reporting: Establishes  procedures for contracting officers to provide contractor information, such  as terminations for cause or default and defective cost or pricing data,  into PPIRS and Federal Awardee Performance and Integrity Information  System module within PPIRS.  This final rule was published in the  Federal Register on September 29, 2010, at 75 Fed. Reg. 60,258, and  effective October 29, 2010.
FAR Case 2008–027, Federal Awardee Performance and Integrity  Information System: Amends the FAR to implement the Federal  Awardee Performance and Integrity Information System. The system is  designed to significantly enhance the Government’s ability to evaluate the  business ethics and quality of prospective contractors competing for  Federal contracts and to protect taxpayers from doing business with  contractors that are not responsible sources. This final rule was published  in the Federal Register on March 23, 2010, at 75 Fed. Reg. 14,059, and  was effective April 22, 2010.