The challenge of past and future performance

The past performance system is in shambles and no one seems surprised but an efficient and transparent system will make the acquisition process better for agencies and contractors alike.

A new inspector general report has taken the Army to task for its poor, well, performance on past performance reporting.

The IG looked at past performance records for over a range of product, technology and services acquisitions totaling $1.5 billion and found that the records were routinely late in being posted, unclear and incomplete. Often, the reports were so limited that it was impossible to even tell precisely what work was performed, let alone how well.

As a result, GAO has recommended that the Army review and update its training of its contracting workforce to ensure that they are more properly and completely prepared.

Few people are surprised by the report, which probably explains why it has received only modest attention. Indeed, there are few who believe the past performance system is functioning as designed and as it should, which itself is a disservice to the American taxpayer because done right, past performance is the single most significant indicator of future performance.

Some even argue that well structured and documented past performance reports are sometimes the only factor a buyer needs to take into account when making a decision.

But we actually should be outraged that more than 20 years after the laws and regulations were changed to make past performance reporting mandatory for any procurement of a certain size and to make it a significant evaluation factor on any significant procurement, this problem still remains.

And make no mistake about it; while this report focuses on the Army, this is a problem across the government.

It’s really not that complicated. Contracting officers should, in concert with the end user customer, and as a matter of routine, be filing periodic reports on performance; and contractors, as an equal matter of routine, should be both reviewing and taking the opportunity to comment on reports involving their work.

We do this every day in so many other areas of work, including personnel evaluations, that it is disturbing to recognize that it is not yet adequately embedded in our acquisition culture. Given the central role acquisition plays across virtually every government organization and mission, there simply is no excuse.

In addition to process challenges identified by the IG, there are other areas of concern that need to be promptly and meaningfully addressed. 

First, too much time has been spent arguing over whether companies should have the right to comment on their own past performance reports (not change; comment) and how quickly they should be required to do so.

Clearly, fairness mandates that they get that opportunity; and it also dictates that they be given reasonable time to assess whatever commentary is included by their customers. This too should not be all that complicated; but it has nonetheless been a flashpoint.

Second, a number of people have raised concerns about grade inflation; the practice of simply giving a contractor high performance ratings to avoid any controversy.  That clearly happens. But the opposite also happens; many companies have discovered past performance reports entirely at odds with the facts of their performance and driven as much by personality or other conflicts as anything else.

If we are to have a system that values, measures and rewards performance, then we need a past performance system that reflects those same tenets. And if the overall past performance system were better run and executed, it would generate the kind of credibility and confidence that is needed to enable candid, useful reporting.

Finally, as the IG report suggested, there are clear, sometimes extensive, processes for rating past performance that are not being followed. But it is also true that those processes sometimes result in the government missing opportunities. Here, as with so much else in acquisition, we risk allowing form and process to dominate over substance and outcomes.

As an example, and as a result, we see too many cases in which companies that do not have government performance histories, or performance histories within the given requiring agency, are simply disqualified from competing.

That too is absurd. Do we really want the system to be closed merely because the "process" makes it tough to open it up?

We should take the IG report very seriously and use it as a cudgel to drive and demand that agencies rapidly improve their reporting and use of past performance records and meaningfully address the issues raised in the report as well as the ones I've outlined above.

We need a system that is transparent, efficient, and clear. But that does not mean it has to be overly complicated or time consuming.  Instead, it should be routine, understood by all parties, and fact based

That we are even having this discussion in 2016 is disturbing. But that doesn’t lessen the importance of aggressively dealing with the issue.