JUN 29 1995

Procurement Memorandum 95-21

June , 1995

ACTION

Federal Acquisition Circular (FAC) 90-26 changed the Federal Acquisition Regulation (FAR) to establish the following requirements as of July 1, 1995:

To assist agencies in implementing these new requirements, the Office of Federal Procurement Policy (OFPP) has issued A Guide to Best Practices for Past Performance, interim edition, May 1995. A copy of the guide is attached. It provides excellent guidance for agencies and we recommend that you use it in implementing the requirements in your respective offices.

The following are some highlights of the FAR coverage and the guide, and some additional guidance specific to Department of Commerce acquisitions.

Past performance has most often been used to determine that an offeror is a responsible prospective contractor. In that context it is part of a "go/no go" decision that may be subject to review by the Small Business Administration under the Certificate of Competency process. Responsibility determinations must still be made pursuant to FAR 9.1 before award of any contract, and contractors having records of unsatisfactory contract performance should be screened out of the selection process as part of the responsibility determination. Contractor performance information prepared and maintained pursuant to FAR 42.15 may be used in making those determinations.

However, past performance assumes an added dimension on those acquisitions on which it must now be used as an evaluation factor in source selection. In such acquisitions, it should be included in the solicitation as a factor against which offerors' relative rankings will be compared. It should not be characterized as a minimum mandatory requirement. If a contractor's past performance record passes the responsibility determination, then its record should be compared to the other offerors to determine the offeror that provides the best value to the government. In this context it is a discriminating factor which compares the past track records of competing contractors to help identify which one, relatively speaking, is offering the best value.

Evaluations will be performed at the completion of all contracts in effect on July l, 1995. If the contract period will exceed one year, interim and final evaluations will be performed as follows:

Performance evaluations (including the time allowed for contractor review) will be completed within 60 days after completion of each evaluation period, as specified above. The contracting officer is responsible for initiating the performance evaluation at required periods during contract performance and at contract completion. The development of the performance evaluation is the combined responsibility of the contracting officer and the technical/program office representative. Where the contract provides products or services to end users (persons outside the requiring technical organization), those customers should periodically be surveyed and a summary of their ratings included in the performance evaluation. Examples of contracts on which customer surveys might be used would be-those for information technology, janitorial services, cafeteria operation, health services, etc.

Performance evaluations are not required for contracts awarded under FAR 8.6 (Federal Prison Industries) and FAR 8.7 (NIB/NISH).

Evaluations on construction contracts will be made in accordance with FAR 36.201, and SF 1420 is to be used for those evaluations. Evaluations on architectural and engineering (A&E) contracts will be made in accordance with FAR 36.604, and SF 1421 is to be used for those evaluations.

Although OFPP is not prescribing a standard government-wide performance evaluation system, they are encouraging voluntary development of a uniform government-wide format for ease of use by source selection officials from a variety of federal organizations. OFPP has asked, however, that any system that is used be translatable into five basic ratings: excellent, good, fair, poor and unsatisfactory; and one exceptional rating: excellent plus. The best practices guide includes a suggested format which was developed as a result of an interagency effort. In the interests of ease of exchange of information among agencies, we encourage you to use the format for evaluations and the rating system contained in Appendix 3 of the guide.

At this time no Department-wide information system will be developed. We anticipate that this requirement will eventually be incorporated into DOC Express. In the meantime, Heads of Contracting Offices (HCO) are responsible for maintaining a system of evaluation information on the contracts in their offices and for disseminating such information in response to requests related to their contracts. These systems of information shall include appropriate management and technical controls to ensure that only authorized personnel have access to the data. Evaluations of contractor performance shall not be retained for more than three years after final contract completion.

When a contractor submits a rebutting statement for any of the ratings of a performance evaluation and an agreement on the ratings cannot be reached between the contractor and the contracting officer, the HCO is authorized to make the final decision on the evaluation. The HCO's decision must be in writing. The contractor's statement and agency review must be attached to the performance evaluation report and must be provided to source selection officials requesting a reference check.

The past performance requirements covered in this memorandum will eventually apply to all contracts in excess of $100,000. They will be phased in on the following schedule:

If you have questions to which an answer is not provided either in this memorandum or the best practices guide or if you have suggestions for additional areas of guidance related to past performance, please contact Joyce Cavallini by e-mail or on (202) 482-0202.

Attachment

TABLE OF CONTENTS

APPENDIX 1. PAST PERFORMANCE PLEDGE AND AGENCY CONTACT POINTS

APPENDIX 2. SAMPLE QUESTIONNAIRES

Bureau of Prisons
U.S. Army Information Systems Selection and
Acquisition Agency

APPENDIX 3. CONTRACTOR PERFORMANCE REPORT FORM AND INSTRUCTIONS