Past Performance Big Wins Wind Around Work History

By Nick Wakeman



Anyone who doubts the government is serious about using past performance to award contracts need only look to the General Services Administration's Millennia contract.

Past performance accounted for a weighty 80 percent of the evaluation in the $25 billion, 10-year professional services procurement. Price counted for 20 percent in the evaluation that led to the April 28 multiple award contract that went to 12 companies.

"Not that many years ago, the percentages would have been reversed," said Howard Ady, program manager for one of the winning companies, OAO Corp. of Greenbelt, Md.

"It is essential that we prominently feature past performance, because we want to do business with the best," said Kenneth Buck, assistant to the commissioner of GSA's Federal Technology Service.

Company officials are seeing the weight given past performance rising. On most contracts, past performance counts for 40 percent to 60 percent of overall scores.

For Millennia, GSA went beyond simply asking for a list of references that could vouch for the contractors' abilities. Instead, companies bidding on the contract had to submit references that fit specific criteria, such as the project's size and value and even under which agency's contract the work was done.

"Past performance is probably the single most important factor we see now on contracts," said J. Patrick Ways, senior vice president of business development for Computer Sciences Corp.'s civilian business.

In addition to CSC of El Segundo, Calif., and OAO, other Millennia contract winners are: Boeing Information Services Inc. of Vienna, Va.; Booz-Allen & Hamilton Inc. of Vienna; DynCorp of Reston, Va.; Lockheed Martin Corp. of Bethesda, Md.; Logicon Inc. of Herndon, Va.; Litton-PRC Inc. of McLean, Va.; Science Applications International Corp. of San Diego; SRA International Inc. of Fairfax, Va.; and Unisys Corp. of Blue Bell, Pa.

The Millennia contract, which covers a broad range of information technology services and is designed for large task orders, is a follow on to FedSIM 9600. That $1.6 billion contract was awarded in 1996 to several companies.

The use of past performance in awarding contracts is evolving, said Ed Hogan, vice president of marketing for Unisys Federal. "We are seeing more use of past performance as a criteria to being allowed to bid," he said.

Before the winners were allowed to even bid on Millennia, they had to get through a "pass/fail" gate that was based solely on past performance, said Bernie Cohen, director of corporate business development at SRA International.

Companies could not bid on the contract if they could not provide 21 separate projects that met GSA's criteria. Three of the projects had to be worth more than $8 million a year to the bidders; the remaining projects had to be worth $1 million a year. Work by subcontractors did not count.

"If you couldn't come up with 21 projects, you couldn't bid," Cohen said.

Once the bid was submitted, the 21 projects were not graded equally, said Jim Weatherbee, corporate vice president of SAIC's information systems division. That is because GSA awarded more points to those projects done under a GSA indefinite delivery, indefinite quantity contract. Fewer points went to non GSA IDIQs, and even less were allotted to single award contracts, he said.

"You had to give a lot of careful scrutiny to the projects you picked," Weatherbee said.

One reason for the emphasis on experience with GSA contracts is that the agency wants to work with companies that know how GSA operates, he said.

"They especially wanted companies that could respond quickly to task orders," Weatherbee said.

There was more pressure. Each project used as a reference by the potential bidders had to be summed up in two pages. In the end, the 21 past performance references accounted for 42 pages of a bid proposal that was limited to 50 pages.

As GSA's Buck said, the agency needs reliable performers because its reputation also is on the line. If GSA's contracts don't satisfy the agencies using them, they will turn to other procurement vehicles, he said

Most companies are greeting the emphasis on past performance with open arms. The growth of past performance requirements "puts a lot of pressure on us, but past performance is the best gauge of future performance," Ady said.

With the stakes so high, many companies are adjusting their internal business processes to step up their efforts to monitor performance and address problems more quickly.

CSC, for example, has a past performance office that tracks performance and makes report to upper management, Ways said.

Companies such as Unisys and Logicon have gone so far as to hire outside organizations to conduct surveys on customer satisfaction.

"You cannot afford a black mark or a series of black marks, because it will be fatal to your business," Hogan said.

Logicon has more than 300 contracts, so "it is important for us to continually evaluate our performance," said Jim Perriello, president of Logicon's systems and services business unit. "Our growth is tied to customer satisfaction."

As agencies demand more and more past performance data, companies have to worry about bothering their clients for references.

"If you have a satisfied client, you tend to go back to them for a reference, and some of them are getting tired of that," Weatherbee said.

Some industry officials even question the accuracy and value of using references to measure past performance, because so much of the data is subjective.

When references are used, as in the case of Millennia, the contracting agency sends surveys to the references to verify claims made in bid proposals. The responses to the agency survey are given a numerical value, and a score is established.

"We are seeing past performance used more and more, but the metrics system [for measuring performance] hasn't improved at all," said Avon James, president of Robbins-Gioia Inc., an Alexandria, Va., provider of program management services.

The problem with the surveys is that once they are sent out, the contracting agency has little control over who fills them out, he said. Plus there is the problem of trying to award points to subjective answers, James said.

A better approach would be to create a governmentwide database to which contracting officers and program managers file reports, James said. However, it likely would take legislation to establish this type of database, he said.

With such a governmentwide database unlikely anytime soon, agencies are establishing individual systems.

For example, the Army launched its Past Performance Information Management System in October 1997. The database is collecting information on contractor quality, ability to meet deadlines, cost control and customer satisfaction, said Thomas Coangelo, director of procurement initiatives, office of the assistant secretary of the Army for procurement.

"Right now, there are not a large amount of reports in the database," he said. The Army still relies heavily on conducting surveys of references, but as the database develops, it will aid in streamlining procurements, he said.

With the database, he said, "you don't have to do the surveys, you just go to your computer."

GSA tried to simplify the surveys it used for the Millennia effort to streamline the procurement. From the contractors' point of view, it worked. The FedSIM 9600 contract took more than a year to award from the time the request for proposals was issued through award of the contracts, Cohen said. But Millennia, which replaces FedSIM 9600, took just five and one-half months.

And while using references and surveys to evaluate a company's past performance is not perfect, the system is improving, Ways said. Contract and program offices take the surveys they receive "more and more seriously, because they use them, too," he said.