Past Performance Need Not Be Prologue in Government Contracts

By Alan Chvotkin
PSC EVP and Counsel

May 30, 2019

Evaluating a contractor’s past performance is an essential element of all significant government solicitations. Such evaluations are also used by government officials to make determinations of incentives earned during contract administration. With past performance being such an essential element of federal contracting, isn’t it in the government’s best interest to have timely and accurate contractor performance assessment reporting systems (CPARS) ratings and for contractors to ensure that they are recognized for their work? Now contractors have more control over their own ratings and how the Government uses those ratings.

The Federal Acquisition Regulation (FAR) spells out in detail the five past performance ratings and their definitions. In addition, when past performance is used in a proposal, it is considered a best practice for agencies to advise offerors that it intends to consider the relevance of a firm’s past performance examples it submits, and their comparable size, scope and complexity, to the work covered by the solicitation. In addition, agencies typically announce that they reserve the right to look beyond the specific past performance examples that an offeror submits in response to a solicitation and may consider information it knows or obtains directly from other agencies. Like in so many other areas, agencies are given wide discretion in developing and scoring these evaluation criteria. 

Why are these ratings important? Just look at the OASIS competition, including both the original source selection and the on-ramping now in progress. GSA put a significant weighting factor to “outstanding” past performance ratings and a full 40 percent of the entire proposal scoring potential is tied to past performance. An offeror who does not have an outstanding rating on at least five prior contracts has no chance of amassing enough “points” to get an award. 

Yet a survey by GovConRx of the significant trends in CPARS rating between fiscal years 2014 and 2018 showed a dramatic decrease in the percentage of “exceptional” ratings issued by agencies—the highest rating—and a dramatic increase in the “satisfactory” ratings agencies issued. In addition, they concluded that “Satisfactory” is now the most frequently used CPARS rating. As I tell our PSC members, regrettably, “three is the new five” in contractor past performance ratings. But it doesn’t have to be that way.   

One initiative PSC completed over two years ago was to develop a uniform past performance questionnaire to aid agencies and contractors in tracking past performance references. We also designed a standard format for federal agencies to use when requesting that other government agencies complete a reference check on a contractor’s past work. We evaluated past performance requests from dozens of federal agencies and found that information was not asked for in a consistent way, there was no electronic “fillable” form that companies could use to compile and store the information, and there was no uniformity in the nomenclature. We developed a standard past performance questionnaire (PPQ) and a “fillable” past performance information template. These improvements could be adopted without any change to the statutes or regulations. We presented our findings to the FAR Council, which liked the ideas but has not taken any further action on them—yet.

Contractors have a great deal of influence over their past performance ratings and the examples they choose to submit in response to solicitations. But they have to also be diligent in monitoring agency action when it is time for a past performance evaluation to be completed and, importantly, when a draft is provided. There are strict and unforgiving timelines for a contractor to comment on an agency-prepared draft past performance evaluation.

First, of course, contractors control their performance on every contract. Rule number one here is perform, perform, perform. Rule number two is to be sure that your contracting officer and COR are aware of and share your view of your (exceptional) performance; don’t wait until the end of the performance period to find out. Rule number three is to request a timely and complete past performance evaluation of your work. Monitor that agency submission through the CPARS/PPIRS database and always comment on your rating. 

Second, if you are surprised by your CPARS rating, don’t hesitate to challenge the agency’s determination. Use the opportunity during your review of the draft rating in CPARS to explain your concerns. During that same period, don’t hesitate to request in writing a meeting with the “Assessment Official” who is responsible for your rating. If still unsatisfied, there may be an opportunity to “protest” a past performance rating, but the forum, and the basis for that challenge, are only recently being clarified. 

Finally, maintain a strong internal database of all of your past performance records—including those listed in the government’s past performance database and those for which you have exemplary recommendations. When responding to solicitations, you have the first opportunity to identify the examples you determine to be relevant to the new work and indicative of your capabilities. Time and again contractors have lost out because they failed to submit quality examples of their past performance. 

Where you have strong past performance, you want the world to know it. But a less than stellar past performance rating does not have to be the prologue when competing for and performing future government contracts.