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Home News Archive Past Performance on Steroids? New GSA Database to be Used to Help Determine Contractor Responsibility

Past Performance on Steroids? New GSA Database to be Used to Help Determine Contractor Responsibility

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We have written time and time again about the Obama Administration’s direction to Executive Branch agencies to get serious about documenting contractor past performance information.  Generally speaking, this is a good thing.  The fact is that program execution cannot be mandated by contract terms and conditions; the customer cannot sue a contractor into performing.  The most one can get in such a situation is financial recompense.  And so it is right and proper for a record to be kept of contractor performance, and that record should be a factor in future contract award decisions.

This philosophy is reflected in recent direction from the OMB and FAR Case 2008-016, discussing how to use the Past Performance Information Retrieval System (PPIRS) and mandating that “clear, comprehensive, and constructive” evaluations be submitted for contract actions, so that they can guide future award decisions.  (We noted that the process by which a contractor might challenge its PPIRS evaluation was unclear.)  The proposed rule in FAR Cast 2008-016 would direct contracting officers to input reports into PPIRS whenever a contractor was terminated for default (T4D) or was determined to have submitted “defective” cost or pricing data when subject to the Truth-in-Negotiation Act (TINA).

On September 3, 2009 the FAR Councils issued another proposed rule (FAR Case 2008-027) to implement a requirement of Section 827 of the FY 2009 Defense Authorization Act.  The Act required the General Services Administration (GSA) to establish yet another database covering “integrity and performance” information of “covered Federal agency contractors and grantees for a period of five years.  The Act also required awarding officials to review the database information, and to consider other past performance information (such as that in PPIRS), “when making any past performance evaluation or responsibility determination.”  The Act further required that certain members of Congress will have access to the database, in addition to acquisition officials.  This new database is called the Federal Awardee Performance and Integrity Information System (FAPIIS).

FAPIIS appears to be past performance information on steroids.

The proposed rule deals with contract awards; the OMB’s Office of Federal Financial Management will propose similar guidance for grants and grantees in a future promulgation.  According to the proposed rule, FAPIIS will draw data from existing systems “where feasible.”  Existing systems that will provide data to contracting officers include:

  • The Excluded Parties List System (EPLS) will provide information on companies (and individuals) that are currently suspended or debarred from receiving Federal awards.  However, the rule notes that suspensions and debarments last for a maximum of three years—but since the statute requires that information be maintained for five years, contracting officers will need to access the EPLS archives as well as the current List of Parties Excluded.
  • The PPIRS and CPARS databases will provide data regarding contractor past performance.  If PPIRS works as proposed, contractors that are terminated for default or that are found to have submitted “defective” cost or pricing data will be reported into the database.  (See details in link above.)

The FAPIIS structure also encompasses new systems, including:

  • Contracting officers will report all determinations of non-responsibility and terminations for default “or cause”.
  • Suspension/Debarment Officials (SDOs) will report all administrative agreements.
  • Contractors with contracts and grants cumulatively valued at $10 million or more will report information related to all criminal, civil, and administrative proceedings directly into the system.

The following FAR revisions are part of the proposed rule:

  1. FAR 9.105-2(a)(3) will require contracting officers to enter data on all contract actions over the simplified acquisition threshold into FAPIIS, if the C.O. makes a determination that the otherwise successful offeror is not a currently responsible source because of the lack of a satisfactory performance record or lack of a satisfactory record of integrity and business ethics.
  2. FAR 9.104-3(d) will “clarify the relationship of the non-responsibility determination and the Certificate of Competency” when a small business is involved.
  3. FAR 9.406-3 will require that SDOs enter data about administrative agreements (which are alternatives to suspension or debarment) into FAPIIS.
  4. A new contract clause, identified as 52.209-XX, will require contractors to identify whether they meet the criteria for FAPIIS reporting – i.e., a cumulative contract/grant award value of $10 million.  The clause will be added to each contract expected to exceed $500,000.  If the contractor meets the requirement, it will be required to report information regarding legal proceedings directly into the FAPIIS database on a semi-annual basis.

To their credit, the FAR Councils report that they “are committed to avoiding de facto debarments” and have proposed some controls to prevent automatic determinations of non-responsibility.  For example:

  • There will be a point of contact for reports of system errors and a point of contact for each Government entity that enters information into FAPIIS.
  • Contactors will have the opportunity to post comments regarding information that has been entered by the Government, which will be retained along with the performance information for a period of six years (five years of active access plus one year of archiving).
  • The system will notify contractors automatically when new information is posted to the contractors’ records.
  • If the Contracting Officer obtains relevant (negative) information about an offeror, that CO must contact the offeror to permit it to provide additional information that might demonstrate its responsibility.  However, the CO must also notify the appropriate SDO if “the information appears appropriate for that official’s consideration” of whether to initiate suspension or debarment proceedings against that contractor.

Contractors will want to know what information they will need to report into FAPIIS.  The proposed rule requires current FAPISS information to be certified as being current, accurate, and complete.  It also requires a certification as to whether the offeror, and/or any of its principals, has, within the past five years, been involved in any civil or criminal proceeding, or any administrative proceeding, in connection with the award to or performance by the offeror of any Federal or State contract or grant, if the proceeding resulted in:

  1. a conviction (criminal proceeding)
  2. a finding of fault and liability that results in a payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more (civil proceeding)
  3. a finding of fault and liability that results in the payment of a monetary fine or penalty of $5,000 or more, or the payment of a reimbursement, restitution, or damages in excess of $100,000 (administrative proceeding)
  4. a disposition by consent or compromise with an acknowledgement of fault by the contractor, if the proceeding could have resulted in any of the foregoing outcomes.

Open items include whether this proposed rule will apply to commercial items and whether the rule will apply to Commercial-Off-the-Shelf (COTS) items.

This is clearly a significant proposed rule that may affect the ability of certain contractors to receive Federal contract or grant awards.  It is, however, mandated by public law.  As such, there may not be very much that contractors can do to affect it.  It should be noted that the FAR Councils cite President Obama’s March 4, 2009 Memorandum on Government Contracting as support for the proposition that responsible contractors are those that have “historically completed projects both effectively and cost efficiently.”  Rather than fight the proposed rule, contractors may be better served to develop communication protocols to ensure that their past performance information is accurate (or to provide comments when they believe the information is not accurate), and to ensure that they are accurately reporting information into the FAPIIS database(s) when required to do so. 

As always, strong performance and cost/schedule discipline, coupled with robust customer communication, is the best means of ensuring good evaluations by Government officials.

The proposed rule is here.

Comment on the proposed rule here.

 

Newsflash

Effective January 1, 2019, Nick Sanders has been named as Editor of two reference books published by LexisNexis. The first book is Matthew Bender’s Accounting for Government Contracts: The Federal Acquisition Regulation. The second book is Matthew Bender’s Accounting for Government Contracts: The Cost Accounting Standards. Nick replaces Darrell Oyer, who has edited those books for many years.