Past Performance

Dec 23, 2011 | Government Resources

In selecting winning vendors, federal, state, and local governments have typically looked at past contract performance information as part of their overall evaluation processes. Simply stated, vendors that have a history of performing well have always enjoyed a better chance of winning than those that do not.

In late 1990s, the federal government began placing even more emphasis on past performance, codifying detailed past performance rules within the Federal Acquisition Regulations (FAR).

Collection of Past Performance Information

Under the FAR, agencies prepare evaluations of contractor performance for each contract in excess of $100,000 from the time the work under the contract is completed. Agency evaluations of contractor performance are supposed to be provided to the contractor “as soon as practicable” after completion of the evaluation. Contractors have a minimum of 30 days to submit comments, rebutting statements, or additional information. Procedures allow input from the technical office, contracting office and, where appropriate, end-users of the product or service.

Use of Past Performance Information in Evaluation RFP Responses

The solicitation itself is supposed to describe the approach taken for evaluating past performance, including the evaluation of offerors with no relevant performance history, along with an opportunity to discuss past or current contracts (including both government and private) for work similar to the agency’s requirement. Further, solicitations authorize offerors to provide information on any problems encountered in the past and to describe their corrective actions.

The agency will consider the information you provide in your proposal, along with information obtained from “any other sources.” What are these other sources? Evaluators may call personnel within agencies you’ve worked for and begin to ask questions. They may snoop around and talk to people not listed as references in your proposal. And they probably will check past performance databases to see if you’re listed and what’s been said.

The federal government is beginning to centralize past performance information for large contracts. For example, the past performance database of the National Institutes of Health, NASA, and DOD are being stored on a DOD server and will be available on the Internet (probably early 2003) for access by any contracting official. The new system is called Past-Performance Information Retrieval System (PPIRS), We expect this trend to continue toward a single federal database for ALL agencies. When will full centralization be a reality? Probably sometime in this century. (It’s the federal government we’re talking about. It may take awhile.)

Don’t forget, information often is kept on smaller contracts as well, just more informally. (The contracting officer (CO) only needs to make notes to the file when using past performance information in making small contract award decision, be consistent in using past performance information, and discuss negative performance with prospective offerors.)

So, for both small and large contracts, it’s important to manage, as best you can, what’s being said about your company. Negative information often means less business down the road.

Past Performance and Future Sales

There is nothing atypical about government past performance and its correlation with sales results. Use of past performance information to select suppliers is a way of life in the commercial sector. You’ll probably lose that one customer altogether if you perform poorly for a commercial customer.

One big difference, though, between the public and private sector: in the commercial world your past mistakes tend not to come back to haunt you quite as dramatically, because there’s not as much information- sharing going on. Another important difference: if a government agency decides to knock you out of the competition because of past performance problems, the decision can be challenged in court.

To keep your record stellar, perform well, of course–that’s obvious– but also communicate with both the CO on a past contract and the CO soliciting for the new contract when in doubt about any aspect of past performance and how it is being used.

Rebut all negative performance reports and try to get the agency to strengthen lukewarm reports. Remember, it’s all about relationship sales and maintaining a strong customer relationship during performance, so obtaining a superior performance report should be a natural byproduct of how you deal with the customer.

Everyone encounters performance problems, so focus on correcting the ones you encounter and make your customer a partner in the correction process. Ideally, you would have a former customer say: “The contractor and our agency worked together to solve this particular performance problem. They took the problem seriously and took steps to correct it.” That statement would look nice in an evaluation report since most government people recognize that all contractors encounter performance problems and what counts most is how you address those problems.

Select carefully the contracts you site in your proposal. Talk with your government references ahead of time so they know that they are being referenced; prep them to say good things; and be especially thoughtful on how you discuss problems, if any, and corrective actions taken.

Bottom line is this: Communicate openly with buyers and deal straight up with any performance evaluations and perceptions that are out there.

Don’t run and hide from your past, because in this post-reform era it’s increasingly out there for all to see.