Attention Contractors: You Will Be Graded!

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2 Attention Contractors: You Will Be Graded! Past in Government Contracting Breakout Session #: A07 Mark Blando, JD, Partner, Eckland & Blando LLP Date: Monday, July 25 Time: 11:15am 12:30pm

3 Agenda 1. Past Information (PPI) Basics 2. How Does It Work? 3. Challenges & Strategies 4. Cases & Recent Developments ABC Bids on an RFP ABC Bid is Evaluated ABC Wins the Contract ABC Contract Initiation ABC Contract Intermediate ABC Contract Completion ABC Bids on a New RFP ABC Bids is Evaluated with PPI Contractor Review & Rebuttal Assessment CPARS CPAR Contractor Review & Comment System for Award Management (SAM) CCR ORCA FPDS EPLS PPIRS/FAPIIS FedBizOpps APMRS (Delivery) EDRS (Quality) T4D List (Terminated Contracts) Other Systems, TBD

4 What is PPI?

5 Past Information FAR (a) Past performance information (including the ratings and supporting narratives) is relevant information, for future source selection purposes, regarding a contractor s actions under previously awarded contracts or orders. It includes, for example, the contractor s record of: 1. Conforming to requirements and to standards of good workmanship; 2. Forecasting and controlling costs; 3. Adherence to schedules, including the administrative aspects of performance; 4. Reasonable and cooperative behavior and commitment to customer satisfaction; 5. Reporting into databases; 6. Integrity and business ethics; and 7. Business-like concern for the interest of the customer.

6 Past Information FAR (a) Past performance information (including the ratings and supporting narratives) is relevant information, for future source selection purposes, regarding a contractor s actions under previously awarded contracts or orders. It includes, for example, the contractor s record of: 1. Conforming to requirements and to standards of good workmanship; 2. Forecasting and controlling costs; 3. Adherence to schedules, including the administrative aspects of performance; 4. Reasonable and cooperative behavior and commitment to customer satisfaction; 5. Reporting into databases; 6. Integrity and business ethics; and 7. Business-like concern for the interest of the customer.

7 PPI History: Origins (FASA) Office of Federal Procurement Policy (OFPP) Policy Letter 92-5: Established requirements for evaluating contractor performance and for using past performance information in the contractor selection process. Federal Acquisition Streamlining Act of 1994 (FASA) 41 U.S.C. 405 Established the PPI System Directed OFPP to establish policies and procedures that encourage the consideration of the offerors past performance in the selection of contractors.

8 FAR Clauses FAR and -2: Evaluation of past performance when ordering under Federal Supply Schedules FAR : Contracting officer shall consider relevant performance information when making a determination of responsibility FAR Use of past performance for commercial items FAR and -2: Contracting Officer may use past performance as a basis for award under simplified acquisition procedures FAR and : Past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold (includes construction) FAR : Past Shall be included as an evaluation factor for twophase design-build source selections FAR : Agency must consider offeror past performance in selection of firms for architect-engineer contracts FAR : Definition of Past Information FAR and : Agencies shall prepare an evaluation of contractor performance and submit to PPIRS

9 PPI History The Problems 2008 DOD IG Report: Contractor Past Information CPARS Examined 68% had overdue past performance assessments reports 39% of systems contracts registered more than 1 year late 82% of past performance reports were deficient Unusable: Contracting Offices lacked sufficient PPI to make informed decisions in source selection

10 PPI History The Problems 2009 GAO Report of Federal Agencies Use of Past Estimated Contracts Requiring an Assessment That Had an Assessment in FY 2007 Dept/Agency Est. Contracts Requiring Assessment Contracts with an Assessment Percent Air Force 2,795 1,300 47% Navy 3,879 1,622 42% Army 6,145 1,971 32% Other DoD 1, % Homeland Security 4, % NASA 3,706 1,093 29% Energy % Total 22,904 7,007 31% Source: Better Information Needed to Support Agency Contract Award Decisions, GAO Highlights (April 2009).

11 PPI History The Fixes July 2009 OFPP Memo Reporting required into common database (PPIRS) Establish internal agency procedures Assign responsibility within Agency Consider Small Business Subcontracting Plan Compliance review by OFPP May 2010 OFPP Memo CPARS is the only PPI reporting system to be used to collect and transmit performance evaluations to PPIRS No new systems will be built CPARS Contractor Assessment Reporting System (originally a DOD system only)

12 PPI The Progress June 2013 GAO Report to Congressional Committees, Contractor : DOD Actions to Improve the Reporting of Past Information Strong improvement in reporting and timeliness, still working through backlog PPIRS compliance: increased from 56 percent in 2011 to 74 percent in 2013 January 9, 2014 Review Dept/Agency Est. Contracts Requiring Assessment Contracts with an Assessment Percent Air Force 12,980 11, % Navy 19,632 16, % Army 39,921 31, % Total DOD 79,745 65, % Source: Richard Ginman, Memorandum re: Contractor Past Assessment Reporting 1 st Quarter FY 2014.

13 How Does It Work?

14 ABC Contract Initiation Contractor Review & Rebuttal CPARS CPAR ABC Bids on an RFP ABC Bid is Evaluated ABC Wins the Contract ABC Contract Intermediate ABC Contract Completion ABC Bids on a New RFP Assessment Contractor Review & Comment System for Award Management (SAM) CCR FPDS ORCA EPLS APMRS (Delivery) EDRS (Quality) T4D List (Terminated Contracts) ABC Bids is Evaluated with PPI PPIRS / FAPIIS FedBizOpps Other Systems, TBD

15 How it used to be... APMS (Delivery) EDRS (Quality) ABC Contract Initiation Contractor Review & Rebuttal CPARS T4D List (Terminated Contracts) CPAR PPIRS ABC Competes on an RFP ABC Contract Intermediate Assessment ACASS PPIRS-RC (Report Card) PPIRS-SR (Statistical Report) ABC Proposal is Evaluated ABC Contract Completion CCASS ABC Wins the Contract ABC Bids on a New RFP Contractor Review & Comment SAM - CCR FAPIIS - ORCA ABC Bids is Evaluated with PPI - FPDS etc.

16 In The Beginning... No Past Information: If a contractor is truly a new entity and none of the company principals ever performed relevant work for others, the company is considered to have no past performance. This may not be used as a factor against you. HOWEVER - Responsibility Determinations In making a responsibility determination, the contracting officer shall consider relevant past performance information. FAR (c) This information can include: ABC Bids on an RFP ABC Bid is Evaluated Commercial Sources Publications Suppliers Subcontractors Customers Financial Institutions Government Agencies Business and Trade Organizations ABC Wins the Contract

17 Assessment Report Cards: [A]ssesses a contractor s performance and provides a record, both positive and negative, on a given contract for a specific period of time. Reporting Thresholds: Above Simplified Acquisition Threshold: $150K Architect/Engineer: $35k Construction: $700k ABC Contract Initiation Contractor Review & Rebuttal Teaming, Joint Venture Partners, and Subcontractors: No separate ratings. All comments on Non-Prime Contractor performance are included on the Prime s evaluation. ABC Contract Intermediate ABC Contract Completion Assessment

18 Evaluation FAR (b)(1) The evaluation should include a clear, non-technical description of the principal purpose of the contract or order. The evaluation should reflect how the contractor performed. The evaluation should include clear relevant information that accurately depicts the contractor s performance, and be based on objective facts supported by program and contract or order performance data. The evaluations should be tailored to the contract type, size, content, and complexity of the contractual requirements.

19 Evaluation Factors FAR (b)(2) Evaluation factors for each assessment shall include, at a minimum, the following: (i) Technical (quality of product or service). (ii) Cost control (not applicable for firm-fixed-price or fixed-price with economic price adjustment arrangements). (iii) Schedule/timeliness. (iv) Management or business relations. (v) Small business subcontracting (as applicable, see Table 42-2). (vi) Other (as applicable) (e.g., late or nonpayment to subcontractors, trafficking violations, tax delinquency, failure to report in accordance with contract terms and conditions, defective cost or pricing data, terminations, suspension and debarments).

20 Evaluation FAR (b)(3),(4) (3) Evaluation factors may include subfactors. (4) Each factor and subfactor used shall be evaluated and a supporting narrative provided. Each evaluation factor, as listed in paragraph (b)(2) of this section, shall be rated in accordance with a five scale rating system (i.e., exceptional, very good, satisfactory, marginal, and unsatisfactory). The ratings and narratives must reflect the definitions in the tables at 42-1 or 42-2 of this section.

21 Ratings Exceptional (5): meets and exceeds many contract requirements to the Government s benefit Very Good (4): meets contractual requirements and exceeds some to the Government s benefit Satisfactory (3): meets contractual requirements Marginal (2): does not meet some contractual requirements Unsatisfactory (1): does not meet contractual requirements and recovery is not likely in a timely or cost effective manner Source: FAR Table 42-1 Evaluation Ratings Definitions.

22 Mandatory Reporting Intermediate Reports Required: Every 12 months Milestones: Timed to coincide with options exercised, award fee determinations, and program milestones. Scope: Only performance since the last report was taken is evaluated Final Report Initial Report Required: If performance period is <365 days Scope: Only covers up to 12 months of actual performance Contract Completion: Required Contract Termination: Required Scope: Only performance since the last report was taken is evaluated

23 Out-Of-Cycle Reports Optional Reporting Triggered: By significant changes in performance Optional: May be requested by contractor in writing or written at the government s discretion Maximum: One per year Addendum Report Always an Option: While exceeding the SAT mandates a PPI report, an agency may also submit a report for a contract below the SAT. (FAR ) Scope: Evaluation of contract close-out, warranty performance, performance of other administrative requirements Optional: Written at government s discretion

24 Assessment Right to Review and Comment: Upon CO signature, Report Card is sent to Contractor. Delivery: provided to contractor as soon as practicable after completion of evaluation Response Time: 14 day review period Rebuttal and Review FAR (d): Contractor may seek review one level above the CO ABC Contract Initiation ABC Contract Intermediate ABC Contract Completion Contractor Review & Rebuttal Assessment

25 Report Cards & CPARS Contract Assessment Reporting System CPARS: [A] web-enabled application that collects and manages a library of automated contractor report cards CPARS Contract Assessment Reporting System : A web-enabled application that collects and manages a library of automated contractor report cards. CPAR Contract Assessment Report : The module ( report card ) that is processed in PPIRS. CPARS CPAR - Agencies prepare and submit all PPI evaluations into CPARS - Evaluations are automatically transmitted to PPIRS within 14 days after contractor is notified of availability to comment. - Updates to the information in PPIRS, based on any contractor comments, are made within 14 days of receipt. - Agency response is updated to PPIRS within 14 days of its receipt

26 PPIRS Past Information Retrieval System PPIRS is a web-enabled, enterprise application that provides timely and pertinent contractor past performance information to the Department of Defense and Federal acquisition community for use in making source selection decisions. PPIRS-RC: Report Card -Contracts of at least $150K -Used in formal source selection evaluation Rumors of my death have been greatly exaggerated PPIRS-SR NG: Statistical Reporting Next Generation -Contracts under $150K -Less formal, minimal data

27 FAPIIS Federal Awardee and Integrity Information System Information Consolidation System: Contains specific information on the integrity and performance of covered federal agency contractors and grantees. Includes last five years of information: PPI Evaluations Civil, Criminal, and Administrative Proceedings Suspensions and Debarments Non-Responsibility or Recipient Not-Qualified Determinations Termination for Default, Cause, or Material Failure to Comply Defective Pricing Determinations Administrative Agreements Issued in Lieu of Suspensions and Debarments PPIRS Accessibility: Through PPIRS PPIRS- RC FAPIIS

28 Future Contracts & PPI Competitive Negotiations: Evaluation factor for contracts exceeding $150,000 Requirements for all Executive Agencies: Unless: CO documents that PPI not relevant to that acquisition Responsibility Determinations, for both: Sealed Bidding and Competitive Negotiations Limited Use: expires after three years Exception: Six years PPI can be used for Construction and Architect-Engineer contracts. ABC Bids on a New RFP ABC Bids is Evaluated with PPI

29 ABC Contract Initiation Contractor Review & Rebuttal CPARS CPAR ABC Bids on an RFP ABC Contract Intermediate Assessment Contractor Review & Comment ABC Bid is Evaluated ABC Wins the Contract ABC Contract Completion ABC Bids on a New RFP System for Award Management (SAM) CCR FPDS ORCA EPLS APMRS (Delivery) EDRS (Quality) T4D List (Terminated Contracts) ABC Bids is Evaluated with PPI PPIRS / FAPIIS FedBizOpps Other Systems, TBD

30 Challenges & Strategies

31 PPI is Critical Next to being able to perform the work, past performance is probably the most important factor to consider when submitting a proposal. Every single past performance evaluation has the ability to make or break their future. Not only should contractors ensure that they do everything possible to achieve positive past performance evaluations, they should fight negative evaluations through the appropriate channels.

32 Common Complaints In report cards: Unjustified evaluation Grade Inflation In award decisions: Ambiguous Criteria/Arbitrary Evaluation Informal PPI Source

33 Proactive Strategies Quality : Review the criteria and make sure they are all met. Communication is Key: How well you deal with others is an express factor. So, seek input from the agency, and proactively address issues Choose your partners carefully: PPI of partner of subcontractor (if will perform a substantial portion of the contact ) will be evaluated too. Post-Award Debriefings: Attend, learn, improve. Request Discretionary Evaluations: Monitor Your PPI!

34 Accessing PPI via PPIRS PPIRS Government Access: Restricted to persons working on source selections and contractor responsibility determinations PPIRS Contractor Access: Restricted to viewing only your own data Central Contractor Registration (CCR) Marketing Partner Identification Number (MPIN)

35 Challenging Evaluations FAR Initial Review: Immediately upon signature of a performance assessment, the CO will provide the contractor with a copy of the report. The contractor has fourteen days in which to submit comments, rebutting statements, or additional information One Level of Review: to be provided by the Agency ABC Contract Initiation Contractor Review & Rebuttal Final Determination: Agency has the final say on the performance assessment ABC Contract Intermediate Assessment CPARS ABC Contract Completion

36 FAPIIS Remarks FAR (c)(2) Rebuttal of Negative Info: Contractors are allowed to submit responses rebuttals or explanations for negative information. (No time limit.) Preservation: Contractor submissions are retained in FAPIIS for six years FOIA: Contractor can assert, within 7 days after information posted, that it s protected from disclosure under FOIA. Info then will be removed within 7 days.

37 Caselaw and Recent Developments

38 Judicial Review Court of Federal Claims (COFC) and Boards of Contract Appeals (ASBCA and CBCA) Jurisdiction: The COFC has jurisdiction to hear a challenge to an unsatisfactory performance evaluation Contracts Dispute Act: Challenge to performance evaluation qualifies as a claim under the Contracts Disputes Act Todd Construction v. United States, 2008 WL (Fed. Cl. Dec. 9, 2008) BUT: Courts remain unclear about what relief is available.

39 GAO Bid Protest Annual Report to Congress for FY 2015 Our review shows that the most prevalent reasons for sustaining protests during the 2015 fiscal year were: (1) unreasonable cost or price evaluation; (2) unreasonable past performance evaluation; (3) failure to follow evaluation criteria; (4) inadequate documentation of the record; and (5) unreasonable technical evaluation. December 10, 2015

40 Challenge to Proposal Evaluation The critical question in our review of an agency s past performance evaluation is whether the evaluation was conducted fairly, reasonably, and in accordance with the solicitation s evaluation scheme, and whether it was based on relevant information sufficient to make a reasonable determination of the offeror s past performance. The Emergence Group, GAO B , February 29, 2012.

41 Fair and Impartial Treatment In a case where: 1. Contractor was held to a higher standard than other bidders; 2. It was only ambiguously explained in the solicitation documents as to how PPI would be used; and 3. Evaluations were performed arbitrarily and capriciously : The Court granted plaintiff s motion for declaratory relief and permanent injunction enjoining contract performance BayFirst Solutions, LLC v. United States, 102 Fed. Cl. 677 (2012)

42 Braseth Trucking, LLC v. United States 124 Fed.Cl. 498 (Dec. 4, 2015) Facts: Protestor had no PPI; awardee did have PPI but the PPI was not all favorable. - Cannot penalize the offeror without any PPI - Agency should have assessed whether the risks associated with dealing with an entity with no performance record at all outweighed the benefits of choosing one that could be rated satisfactory but still had known weaknesses. Once all the bidders have the same adjectival rating, in order to reasonably and rationally rank them, the [CO] must go beneath those ratings to show specifically where it finds advantage in one offer over another offer, notwithstanding the sameness of the ratings.

43 FFL Pro LLC v. United States 124 Fed.Cl. 526 (Dec. 16, 2015) - Facts: Post award bid protest alleging that the evaluation of past performance information did not include an evaluation of applicable criteria. Narrative summary provided by the Technical Evaluation Team in support of its exceptional rating was little more than a copy-and-paste of the solicitation s definition of exceptional. - Held: The evaluation and rating of proposals, when challenged, must be supported by a coherent and reasonable explanation of the agency s exercise of discretion. The agency s action must evince rational reasoning and consideration of relevant factors.

44 Claims History Right to Challenge: A bidder cannot be downgraded by an agency for having a history of filing claims 1 Exception: If the agency shows that the claims process has been abused. No Incentivizing: A bidder cannot be upgraded by an agency for having a history of not filing claims Nova Group, Inc., B , 99-2 CPD 2. Id.; OFPP Memorandum April 1, 2002

45 Questions? Mark J. Blando Eckland & Blando LLP 800 Lumber Exchange Building 10 South Fifth Street Minneapolis, Minnesota 55402