In fiscal year 2007, about 160,000 contractors provided  support to federal agencies. Factors Other Than Past Performance Generally Drive Contract Award Decisions

Agencies considered past performance information in evaluating  contractors for the contract solicitations we reviewed, but many of the  officials we spoke with noted that past performance rarely, if ever, was the  deciding factor in their contract award decisions. Their reluctance to base  award decisions on past performance was due, in part, to their skepticism  about the comprehensiveness and reliability of past performance  information and difficulty assessing its relevance to specific acquisitions. Contracting officials also cited other challenges for not  relying more on past performance information including 1) difficulty  assessing relevance to the specific acquisition or offerors with no relevant  past performance information, 2) lack of documented examples of past  performance, and 3) lack of adequate time to identify, obtain, and analyze  past performance information. Regardless of the source used, contracting officials  agreed that for past performance information to be meaningful in contract  award decisions, it must be documented, relevant, and reliable. Challenges Hinder Systematic, Governmentwide Sharing of Past Performance Information

Our review of PPIRS data for fiscal years 2006 and 2007 found relatively  little past performance information available for sharing and potential use  in contract award decisions. Finally, lack of central oversight of  PPIRS has undermined efforts to capture adequate past performance  information. We estimated that the number of contracts that required a performance  assessment in fiscal year 2007 for agencies we reviewed would have  totaled about 23,000. A Lack of Standardized Evaluation Factors and Rating Scales Limits PPIRS Usefulness

Differing number and type of rating factors and rating scales agencies use  to document contractor performance limit the usefulness of the  information in PPIRS. Efforts to Improve PPIRS and the Sharing of Performance Information Have Made Little Progress

Since 2005, several efforts have been initiated to improve PPIRS and  provide pertinent and timely performance information, but little progress  has been made. Several broad goals for system improvement, established  in 2005 by an OFPP interagency group, have yet to be met. However, little progress has been made in addressing these goals. GSA officials who oversee acquisition related  systems, to include PPIRS, told us that as of February 27, 2009, efforts  remain unfunded and no further action had been taken to make needed  improvements. However, proposed changes to the FAR that  would clarify past performance documentation requirements and require  the use of PPIRS have been stalled. Establish policy for documenting performance-related information that is  currently not captured systematically across agencies, such as contract  terminations for default and a prime contractor’s management of its  subcontractors. Develop system tools and metrics for agencies to use in monitoring and  managing the documenting of contractor performance, such as contracts  requiring an evaluation and information on delinquent reports.
Why GAO Did This Study

In fiscal year 2007, federal agencies worked with over 160,000 contractors, obligating over $456 billion, to help accomplish federal missions. This reliance on contractors makes it critical that agencies have the information necessary to properly evaluate a contractor's prior history of performance and better inform agencies' contract award decisions. While actions have been taken to improve the sharing of past performance information and its use--including the development of the Past Performance Information Retrieval System (PPIRS)--concerns remain about this information. This report assesses agencies' use of past performance information in awarding contracts; identifies challenges that hinder systematic sharing of past performance information; and describes efforts to improve contractor performance information. In conducting this work, GAO analyzed 62 contract solicitations from fiscal years 2007 and 2008 and met with 121 contracting officials. While the solicitations represent a range of contracts and contractors, GAO's findings cannot be generalized to all federal contracts.

What GAO Found

Agencies considered past performance information in evaluating contractors for each of the 62 solicitations GAO reviewed. Generally, factors other than past performance, such as technical approach or cost, were the primary factors for contract award decisions. A majority of officials told us their reluctance to rely more on past performance was due, in part, to their skepticism about the reliability of the information and difficulty assessing relevance to specific acquisitions. Contracting officials agreed that for past performance information to be useful for sharing, it must be documented, relevant, and reliable. However, GAO's review of PPIRS data for fiscal years 2006 and 2007 indicates that only a small percentage of contracts had a documented performance assessment; in particular, we found little contractor performance information for orders against the General Services Administration's (GSA) Multiple Award Schedule. Other performance information that could be useful in award decisions, such as contract terminations for default and subcontract management, was not systematically captured across agencies. Some officials noted that a lack of accountability and lack of system tools and metrics made it difficult for managers to ensure timely performance reports. Variations in evaluation and rating factors have also limited the usefulness of past performance information. Finally, a lack of central oversight and management of PPIRS data has hindered efforts to address these and other shortcomings. Several efforts have been initiated to improve PPIRS, but little progress has been made. In 2005, an interagency work group established several broad goals for improving past performance information, including standardizing performance ratings used by various agencies. However, these goals have yet to be met, and no funding has been dedicated for this purpose. In April 2008, changes to federal regulations were proposed that would clarify past performance documentation requirements and require the use of PPIRS. However, as of February 2009, the proposed changes had not been finalized.