Monday, September 28, 2009

Capturing Past Performance Data is Not Enough

As acquisition reform continues to gain steam, the Office of Management and Budget and the Office of Federal Procurement Policy are continuing to craft guidance and procedures to improve the acquisition process in hopes of saving money on contract costs and reduce the use of “high-risk” contract types. These improvements will no doubt create positive impacts on long-term acquisition outcomes, but it is the short-term and current processes that can and must be improved. Specifically, it is past performance data on procurement actions that can have a deep and lasting impact today on how the government does business and awards contracts today.

To this end, a new past performance database is being developed to capture and use the data on how contractors performed to award contracts. This new system, the Federal Awardee Performance and Integrity Information System (FAPIIS), will integrate a handful of other databases (Excluded Parties List System and Past Performance Information Retrieval System or PPIRS, and the Contractor Performance Assessment Reporting System).

Further mandates to use past performance data were mandated earlier this year in a final rule published in the Federal Register. According to the rule, contracting officers are required to use PPIRS to document the past performance of firms winning awards off the General Services Administration's Multiple Award Schedule and for task or delivery orders placed against government-wide acquisition contracts.

Although the use of past performance is regarded by many in and out of Government to be one of the most important factors that should be used to award contracts, its use is sporadic at best and often not consistent across either agencies or organizations inside agencies. The Government Accountability Office (GAO) reported that the PPIRS system only had a "minimal" number of performance reports for orders placed against the GSA schedules. Further, other GAO reports found that Agencies are often reluctant to rely on PPIRS data because of perceived skepticism about the reliability of the information and difficulty assessing the relevance of such data to a specific contract. As I have also commented (here), technical and cost data should not be at the heart of source selections, but often is the only relevant data used to make award decisions. I believe this is the wrong approach to awarding contracts, and should be addressed immediately without the need for legislation.

For the FAPIIS initiative too be successful, several things have to happen; integration, data standardization, and holding all contracting officers and programs accountable for ensuring past performance data is entered into the new system correctly, accurately, an timely. Past performance data needs to be standardized across government, and all federal agencies should be using one system. One of the main issues with the poor data quality is that many agencies, and departments and organizations within an agency, are using different forms and systems, thus creating an unreliable maze of stove-piped systems and that are not trusted and add little value for their use. Acquisition leaders should also make using a standardized system a high priority, and hold those accountable for its implementation and the quality of the data.

Another issue with the shoddy data, or lack of reporting, is the pressure applied by industry on the reports and the lack of proper oversight and contract management skills in the acquisition community. With standardization in how past performance data is collected and reported, coupled with having the subsequent skills by government to report on performance, fair and effective past performance data could now be realized and disseminated across Government. Industry would still have the opportunity to challenge adverse reviews, but at least the review would be fair and defendable. I think that is not the case currently, and the contracting community feels they do not have the time and inclination to challenge industry, or possibly bring to light poor management by the Government. It is easier to just not update PPIRS, since accountability is currently not enforced or even an issue.

I think my view was brought to light in the current account of continued issues with the Defense Contract Audit Agency, during a billing system review of one of the largest contractors in Iraq. According to the GAO investigators, an auditor stated he did not perform detailed tests (paralleling why past performance data was not updated), "because the contractor would not appreciate it." Since when are government operations dictated by offending contractors?

Like many issues involving poor acquisition outcomes, leadership is crucial to turning the corner on poor performance. I hope that the push to integrate past performance data will be a positive step to hold contractors and programs accountable for execution and adhering to cost, schedule, and performance objectives.


  1. Reporting on past performance is critical. I think anyone with a modicum of acquisition experience has to agree on that.

    But I view that as the output of the actual contract oversight and execution. Past performance is what happens after the product or service is procured. Therefore, I think past performance information should come from the oversight tool/s used during the real acquisition.

    Montly reporting, financials etc. Those are done during the acquisition as required government activities. And they automatically create the past performance. No special action or reporting required. Actual performance during the contract period creates the actual past performance.

  2. Past performance is a continuous feedback loop, and is a product of the life-cycle of a contract. It is created during contract execution, and refined and used for future awards. The issue here is twofold: past performance data needs to be created and documented, resulting from effective contract oversight. Second, this data should be a primary driver of awarding contracts. The status quo is acquisition personnel do not update past performance data, have poor skills in oversight and management, and thus do not have or use any effective past performance data or methodology to confirm performance. Technical and management solutions drive best value (again reality where cost is usually the primary driver), and “best value” becomes elusive. Most of us know that for COTS solutions and services, there is not that big of a differentiator there, other than past performance. Therefore price becomes the factor, and the Government cheats itself. Not a very effective way to administer or award contracts.