FAR 42.1503(e) says: "The past performance information shall not be retained to provide source selection information for longer than three years after completion of contract performance."

A person wrote to Ask A Professor and said that he/she "have seen this interpreted to mean that PPI can only be used if it is less than 3 years old. This seems to be an unnecessarily restrictive interpretation." He/she then asked this question: "Can PPI be used from contract performance that occurred more than 3 years prior?"

I would have said, yes. I have always interpreted FAR 42.1503 to apply to the retention of past performance information collected by Federal agencies about performance on their contracts. Reading FAR literally, it says nothing about limits on the age of information that can be when evaluating past performance during source selection. But the "professor" said, "No."

How do others interpret FAR 42.1503? Does it limit the age of past performance information that can be used for evaluation purposes, or does it just state a limit on past performance records retention?

By Kennedy How on Tuesday, August 29, 2000 - 12:25 pm:

Interesting question!

I agree that the professor's reply would appear to be unreasonable, inasmuch as I, the contracting officer, would have a hard time certifying a contractor as being "responsible" if that contractor defaulted on, or was grossly delinqent on, contracts older than 3 years prior to. Speaking for myself, our own internal recordkeeping will go back farther than 3 years, and if we were to discard that knowledge, absent any redeeming contractual performance subsequent to the negative information, I would be hard pressed to award a contract to that offeror. Especially if the negative past performance in question was expressly germane to the current contract action.

I would go with record retention, as it should be a part of the contract file (solicitation evaluation), so when the file is destroyed, it should be destroyed with it. Though I do rememeber that our contract files were held for six years after final payment......

By Linda Koone on Tuesday, August 29, 2000 - 02:05 pm:

Vern:

I think you have the CompGen on your side.

Take a look at the Oregon Iron Works decision (Oregon Iron Works, Inc., B-284088.2, June 15, 2000). The CompGen makes a distinction between retaining past performance information and using past performance information when evaluating proposals. While there may be a restriction on how long you may retain PPI, there isn't a similar restriction when it comes to evaluating PPI.

Perhaps the 'Professor' got hung up on the FAR reference in the question, which doesn't relate to the actual question.

Here's a thought, however. What if another federal agency, bound by the restriction at FAR 42.1503, provides you with PPI on a federal contract that is more than three years old?

Should you use it or ignore it?

Suppose it's positive information that would benefit an offeror (i.e., raise its PP rating)and its use or non-use directly affects the award decision?

By Scott on Tuesday, August 29, 2000 - 02:09 pm:

Contractor A loses to Contractor B…Contractor B performs for 5 years (1yr base, 4 options 1yr. each) time to re-procure (same service), Contractor As' past performance on the prior contract would not be useable in a source selection because it would have been more than 3 years? I am not sure I would agree with that statement. If Contractor A had "outstanding" performance they would not either. If they had "poor" performance they may not want me to consider it, but I'll bet their proposal would be filled with how much they have improved!!

Regulation is poorly written….

By joel hoffman on Tuesday, August 29, 2000 - 02:22 pm:

The FAR 42.1503 reference only specifically applies to Government retention of PPI records for use in source selections. In a source selection, we can allow Offerors to present other PPI sources/ information. Of course, on Government peculiar/ unique contracts, there may not have been any other relevant projects/sources.

I haven't followed the FAR Supplements through, yet. But the DOD "Guide to Collection and Use of PAST PERFORMANCE INFORMATION" expands somewhat, indicating that the end of any warranty period is to be considered in determining the final date of performance.

By the way, construction and A-E contract PPI are to be "retained" for 6 years after "the date of the report" See FAR 36.201(c) and 36.604(c). This data retention requirement has been around a lot longer than the relatively recent "Past Performance Information." The Part 36, "Brooks Act", A-E selection procedures are distinct from the FAR 15 source selection procedures. A-E's are usually only evaluated under the Part 15 source selection procedures when the solicitiation is for Design-Build or when the A-E firm's involvement in the prime contract is for incidental services. Because we prepare another A-E evaluation upon completion of construction of the previously designed project, A-E performance information can cover a span of MANY years!!

The construction and A-E performance evaluation data, up to 6 years after the date of the report, is supposed to be used in support of a contractor responsibility determination.

So, for construction contracts, reading both FAR 42 and 36 together, it appears to me that policy discourages us from using any Government information older than three years from date of final (including warranty period) performance if we are in a competitive, Part 15, best value source selection. So wouldn't this be the policy for Service and Supply contracts, too?

Regardless of the requirements and age restrictions, I always state in my (Part 15 type source selection) RFP proposal submission requirements and past performance/recent experience evaluation criteria that we won't consider any projects older than three years from the date of the solicitation, unless the offeror can demonstrate relevancy to the instant project through participation and experience of the proposed key personnel or by some other means. Why? Some examples:

1. A company's experience or past performance is only as good as that of current employees. If everyone with the relevant experience and good past performance is gone, there is probably no corporate experience or memory, except perhaps in the contents of company training manuals.

2. In the high tech arena or any evolving technology, "old" experience or performance is almost meaningless, period.

3. With the acceleration of mergers and acquisitions, most companies have completely different characteristics, cultures, locations, workforces, skills, products, corporate leadership, procedures, etc. than they did a few years earlier. I get a kick out of firms which try to ride the coattails of some distant affiliate or division or a firm they absorbed a few years earlier.

4. Manufacturing plants are routinely closed or relocated to areas or countries with cheaper labor or less restrictive rules and regulations. Old information probably wouldn't even be relevant to current manufacturing.

5. If companies could continue to be positively evaluated on old success stories, then to be consistent, they must be judged on their old failures or less than stellar contracts, too. Anyone should see that such an that idea is foolish. A company must overcome old failures and improve to be successful.

I would be suspect if my evaluators are influenced by "old" project experience, without being intimately familiar with a firm and its corporate history.

Happy Sails! Joel

By Scott on Tuesday, August 29, 2000 - 02:51 pm:

Joel:

Your response makes sense. I normally, go 5 years, I can see why in some cases 3 years makes sense.

Scott

By Ramon on Tuesday, August 29, 2000 - 08:32 pm:

Here we go with the regulation writing problem again. What does "three years after completion of contract performance" mean? Is "completion" used in the sense of closing with the act of rating momentary performance during a contract? Is "completion" used with the meaning of final performance taking the result, the delivery, into consideration? My memory may be fooling me, but I think some of the guidance during the reform days did make it three years from contract closure.

To be worth much it needs to be the latter in my view. Those looking at PP information snapshots during execution will not have benefit of knowing the outcome. Those having the advantage of knowing the outcome should have the full story.

A great midpoint evaluation might end in disaster. Judgments made on that incomplete information may not be particularly informative. They are a compromise with not having complete results -- sort of like betting on a horse before the final stretch. Think of the advantage of having the snapshots and the result. Analysis of the full picture might show a trend of glowing "honeymoons" followed by bad outcomes or, better, a contractor who occasionally stumbles and always pushes to win the race.

But that assumes substance over form, that people want the result of analysis and not just a scoring mechanism to meet selection requirements.

I also somewhat disagree with Joel, though I understand what he means and agree in general. Assuming no buy by a lousy company and generally the same corporate culture I don't think success becomes obsolete. For example, the database technology of three years ago may be relatively meaningless, the lessons learned and how the problems are attacked and solved is not. Again, making sense of all that would take analysis and work. Then, for a few million or hundred million that might be a good investment.

By Eric Ottinger on Friday, September 01, 2000 - 11:54 am:

All,

I think we are making this too complicated. The three year rule applies to a piece of paper. It doesn't mean that we are obliged to dump the information that we carry around in our heads or purge our contract files of information related to bad performance.

Of course, if the bad behavior is really egregious, it is still relevant after three years.

Eric

By joel hoffman on Friday, September 01, 2000 - 01:51 pm:

Eric - based on the number of protests involving past performance evaluations, I think too many people oversimplify "this". If they really understood past performance or what they are doing, there might not be so many. Happy Sails! Joel

By Eric Ottinger on Friday, September 01, 2000 - 11:19 pm:

All,

I think the three year rule means that after three years you don't send the PPI document out to other buying offices. It doesn't mean anything more or anything less than this.

Joel,

I don't really disagree. But it seems to me that many of us make these issues more difficult by thinking too much.

Ramon,

You need to understand that the people who write the regulations are under tremendous pressure to use absolutely the minimum number of words. This doesn't always allow for the greatest clarity.

Eric

By Vern Edwards on Tuesday, September 05, 2000 - 10:08 am:

Eric:

I don't buy your defense of the reg writers. They do a very poor job. The number of words that they're allowed to use doesn't have anything to do with it.

Vern

By Kennedy How on Tuesday, September 05, 2000 - 10:18 am:

Part of the problem is that the intent of the reg writers is hard to discern after a period of time. Everybody who has read the provision may well have a different take on just what it means. This also brings up the question regarding who read the reg if/when it was issued for comments, and if this issue came up during the comments period. If so, did it do any good?

Personally, I've learned to "Dick and Jane" a lot of things in clauses and scopes of work over the 17 years I've done contracting. I try not to leave much to the interpretation if I can help it; after going through a ton of claims because of poorly written contracts and having grown into a somewhat adversarial relationship with my Prime Contractor, I've decided to minimize my exposure to litigation.

Kennedy

By Vern Edwards on Tuesday, September 05, 2000 - 11:41 am:

FAR 42.1503(e) says:

"The past performance information shall not be retained to provide source selection information for longer than three years after completion of contract performance." (23 words)

The question is, what does that mean?

Here's the same sentence, rewritten in the active voice:

Do not retain past performance information for use in source selection for longer than three years after completion of contract performance. (21 words)

My sentence is shorter and, I think, less awkward. But it keeps the vagueness associated with the phrase "completion of contract performance." Some agencies make a distinction between "physical" completion and administrative completion. Here's a clearer way of putting it:

Do not keep contract past performance information for use in source selection for more than three years after final payment. (20 words)

Some might argue that my sentence would allow agencies to keep the information longer. Maybe. It depends on what you mean by "completion of performance." "Final payment" is less vague.

In any event, this much should be clear: The FAR sentence does not say that agencies cannot evaluate past performance information that is more than three years old. It says that agencies must not keep past performance information for more than three years "after completion of contract performance." The words in quotes are very important.

Suppose that an agency awards a contract in Oct 2000 that has a one year basic period of performance and four one-year options to extend the term of the contract. Suppose that we define "completion of performance" as meaning "physically complete," but not administratively complete, and that the contractor physically completes the work on Sep 30, 2005. The agency can retain the past performance information about the year Oct 2000 - Sep 2001 "to provide source selection information" until Sep 30, 2008 -- a total of seven years. Think about award term contracts with 15 year performance periods, of which there are now several. Agencies can retain information about the first year of performance for 17 years. The end of each year does not "complete" contract performance, because options extend the term of the contract. Read the option clause at FAR 52.217-9.

The emphasis in the sentence is on limiting the period of retention of information. Agencies must not keep certain information for certain purposes for more than three years after a certain point in time. Obviously, if they do not keep it, then they will not have it, and thus cannot evaluate it. However, the sentence does not say that agencies cannot use older information that they receive from others, and any such interpretation is a figment of someone's imagination.

If the FAR Council had meant to prevent agencies from using past performance information that is more than three years old, then they should have written:

Do not evaluate past performance on contracts for which final payment was made more than three years before issuance of the solicitation. (22 words)

Fewer words than in FAR 42.1503(e), but clearer and more precise.

By Ramon Jackson on Tuesday, September 05, 2000 - 12:36 pm:

Thank you Vern! Eric's news was a true revelation to me. I'd never have guessed that to be the case. May the Deity protect us from what would be if they were not under this pressure!

The FAR seems improved since my first exposure, but is still full of gobbledygook, usually compounded with a tangle of cross references. I sometimes wonder if it is written to provoke ambiguity and avoid a definitive stand, probably the natural product of writing by committee. When I looked up the cite Joel gave in another thread I ran across a nearby paragraph that struck me as being overfilled with fragments treated as sub, sub, sub paragraphs. Few seemed to capture a unique idea. One almost needed a flow chart to determine intact relationships.

In 1981 the Office of the Chief of Naval Operations issued (not "promulgated") a nice little guide, Just Plain English, that would be an asset in any office. My writing improves each time I refresh my memory with it. Your example could be from that little paper.

FAR needs a strong editorial staff devoted to plain English. Following Kennedy's advice in making efforts to minimize interpretation in simple language (my interpretation of "Dick and Jane") could go far in increasing performance by reducing bickering and confusion.

By joel hoffman on Tuesday, September 05, 2000 - 12:55 pm:

Yes, it would be nice to know what the FAR Council really intends.

Due to a myriad of client concerns about poor warranty response, the Corps of Engineers has recently put increased emphasis on "warranty performance." Typical warranty periods are one year after acceptance of or benefical occupancy of a facility or part of the facility. This might occur before or after final payment. USACE has mandated that poor warranty service be reflected in a performance evaluation.

As I mentioned previously, FAR 36 mentions retention and use of the construction and A-E contractor evaluations for periods much longer than the FAR 42.1503(e) three year limit for use in source selections (FAR 36.2 and 36.6). Those requirements are the same in my January 1, 1997 FAR version as in the current one. Another apparently uncoordinated conflict by the FAR council. Are there intended exceptions?

The Part 36 requirements specifically refer to use in making construction contractor "responsibility determinations" and for use in reviewing A-E "qualifications data" (Brooks Act, pre-qualifications procedures - the alternate source selection method used for A-E contracts). Why would 'old' data be required or even useful for determining if a contractor is minimally qualified (responsible - go/no-go)but not allowed for use in comparable best value evaluations???? Happy Sails! Joel

By Vern Edwards on Tuesday, September 05, 2000 - 01:07 pm:

Ramon:

There's a wonderful little book that I recommend to everyone who struggles to write clearly. It's called, Clear and Simple as the Truth, by Francis-Noel Thomas and Mark Turner (Princeton University Press, 1994).

Here's a quote from the first page:

"Why is American prose as bad as it is, even though we have more writing programs than ever? Our answer is that writing is an intellectual activity, not a bundle of skills. Writing proceeds from thinking. To achieve good prose styles, writers must work through intellectual issues, not merely acquire mechanical techniques."

It often seems to me that the people who write the FAR have not struggled sufficiently with the intellectual issues of policy-making. It's as if they haven't thought clearly about what they want to require or prohibit. Is the limit on record retention in FAR 42.1503(e) a means to an end or an end in itself? If it is a means to an end, to give offerors a clean slate after the passage of a certain amount of time, then why not simply say, "Don't evaluate past performance information that is more than three years old?"

Nowhere is the FAR Council's intellectual confusion more evident than in FAR 15.306, the rules about "exchanges" during source selection.

By Ramon Jackson on Tuesday, September 05, 2000 - 02:41 pm:

Vern, I agree such confusion is the root of many problems. This is often what I have in mind when I mention "engineering" in the context of the contracting itself.

Contracts are as, sometimes more, complex than some of the engineering efforts we buy with them. Equal care seems appropriate. Many of the engineering processes we expect applied to our projects can apply to engineering the context for the project. A well engineered contract can only enhance execution. I think the same applies to the regulatory framework within which contracts exist.

Still, it is almost shocking to take a FAR paragraph and look only at the writing. Many having no intellectual issues are probably twice or more in length than need be and several times as complex in structure. That latter seems to be the result of a drive to parse word strings without obvious purpose. Perhaps we can't stop our Legislative people from writing in obtuse legalese, but (as far as I know) they have passed no law requiring the resulting regulations be as poorly worded.

Oh well, I suppose we are getting off into another one of those "should be" areas where "deity" is involved. Hmmmm. Wonder if Bob would consider a new area dedicated to FAR paragraph candidates recommended for logical surgery, extreme diets and slim down exercises. I wonder if he has server space?

By Kennedy How on Wednesday, September 06, 2000 - 12:42 pm:

Vern,

After reading your various iterations, my question becomes: How is past performance information defined?

I ask this question because historically, our contract production specialists keep detailed records of contractor performance. I believe that the various DCMCs also keep records. These are used to generate delivery capabilities, and pre-award survey information. Limiting past performance INFORMATION would seem to be limiting this; not to mention the loss of any institutional knowledge of a particular contractor.

I think your comment about evaluating the information is valid, but without records to back up your evaluation, it may be difficult to win a protest by the aggrieved contractor. You seem to define past performance information in two different ways, which will get us into trouble. Perhaps if we delineate past performance information with past performance evaluation report.....

Kennedy

By Vern Edwards on Wednesday, September 06, 2000 - 01:58 pm:

Kennedy:

FAR 42.1501 defines past performance information in detail. (I won't quote it here because it is a long definition.)

FAR 42.1503(e) limits the retention of past performance information "to provide source selection information." It does not limit its retention for other purposes.

I am not aware of having defined past performance information in two different ways. I have looked back at my posts, but I don't see what you apparently see. I have always intended to define it as it is defined in FAR 42.1501.

Vern

By C MERCY on Wednesday, September 06, 2000 - 03:34 pm:

The completed assessments, including any contractor response or rebuttal, and agency reviews above the Contracting Officer, should be filed in the contract file, in a separate file, or automated database where they can be readily accessible by contracting office personnel. Automated databases should be accessible by source selection teams in other agencies through use of a secure system. Interim assessments should be retained for the duration of the contract and included with the final assessment in the file. The interim assessment allows source selection teams to analyze performance trends during the contract.


Assessments may not be retained to provide source selection information for longer than three years after completion of contract performance. The assessment storage system used should provide individual contractor access to only that contractor"S assessments.THE FOREGOING ARE THE WORDS OFPP PRODUCED IAW PL TO DEAL WITH THIS ISSUE. AS EVERYBODY HAS HIT SOME PART OF THIS NAIL ON THE HEAD MAY I SUGGEST THAT THE 3 YEAR CLOCK BEGINS ON THE DATE OF THE FINAL ASSESMENT. I ALSO THINK THE 3 YEAR RETENTION IS A NOD TO THE MEMORY CAPACITY OF THE AUTOMATED DATA SYSTEMS THAT PP ARE ENCOURAGED TO BE PLACED UPON.

By Kennedy How on Thursday, September 07, 2000 - 12:18 pm:

Vern,

I read the definition in 42.1501, and it pretty much summarizes what I consider to be past performance information. The same type of info I cited in my last post.

In your post, you write:

>>>>>In any event, this much should be clear: The FAR sentence does not say that agencies cannot
evaluate past performance information that is more than three years old. It says that agencies must
not keep past performance information for more than three years "after completion of contract
performance." The words in quotes are very important. <<<<<

I guess my question is "exactly what are you going to evaluate the offeror's past performance on?" If you don't have the information any longer TO evaluate, or to back up your position (positive or negative, but more negative), how can you rebut your offeror's rebuttal?

Earlier on, we had a discussion over relevant past performance information; I think we used the example of welding aluminum towers. Let's say the offeror had a previous contract that was a disaster, he was totally out of his league. Let's say the contract closed back in '96. Since then, he has had other contracts, not anywhere near that complex, and performed successfully. Let's say he decides to bid again to pretty much the same kind of contract as the disaster. The reg says after 3 years, we don't have the information documenting the disaster any longer, but we all know how bad it was. We can evaluate him in the negative, but if he protests, or we get a Congressional, how are we going to document our decision? I would be hesitant to advocate a negative rating unless I had the documents to back it up. A positive rating, it's easier to take.

To me, not having the information is tantamount to resetting the past performance to zero; as long as the contractor waits long enough for the "statute of limitations" to run out. We had this problem back in the early '80s, we had a number of fraud cases, with losses up to $100K over a bunch of small contracts. Justice Dept refused to prosecute, the contractor closed up shop and started a new company. Same guy, same crook. But, because we had NO history of the company, we had problems denying award.

That was hard to swallow, but we got over it eventually. But now, it appears to me that as long as the contractor is patient, he doesn't even have to change names.

Maybe I'm missing something in all of this.

Kennedy

By C MERCY on Thursday, September 07, 2000 - 03:49 pm:

PERHAPS ITS THAT PAST PERFORMANCE INFO IS USED IN TWO MANNERS. NOT ONLY IS IT USED IN BEST VALUE ASSESSMENTS BUT ALSO AS RESPONSIBILITY DETERMINATES. THERE IS NO STATUE OF LIMITATIONS ON PART 9 DETERMINATIONS.

By Charlie Dan on Thursday, September 07, 2000 - 06:10 pm:

Kennedy asks "exactly what are you going to evaluate the offeror's past performance on? If you don't have the information any longer TO evaluate, or to back up your position (positive or negative, but more negative), how can you rebut your offeror's rebuttal?"

It's been my experience that past performance comes from a variety of sources. In fact, I have yet to acquire such information from the databases established pursuant to the relatively new requirements of FAR 42.15. Since the mid-80s at least, I've required offerors on major procurements to provide a list of references, including appropriate points of contact. Most of the time, when I request past performance information directly from such points of contact they are responsive. The most interesting of these, by the way, was a glowing recommendation from General Colin Powell (I'd say that one carried a bit more weight than the others!)

With the current requirements I would be obliged to provide an offeror the opportunity to comment on any negative past performance information that came from such a source. But the fact that the offeror provided the point of contact would be significant to me. It's one thing to get bad feedback from a Government-identified source, quite another when an offeror identifies the reference and point of contact. If these are the best references they can come up with, and they're negative, what does that tell you? It happens more often than I thought it would.

(By the way, Bob, this is the first time I've posted a message to your new forum. I was surprised to encounter the Spell-check feature. Now I wonder exactly how much that feature contributes to the general impression of a very intelligent set of participants!)

By bob antonio on Thursday, September 07, 2000 - 07:32 pm:

Charlie:

How is everything at the Flats? I'm happy everyone is enjoying the forum.

By Joel Hoffman on Friday, September 08, 2000 - 08:37 am:

Kennedy, the Government's database is just one source of past performance information. As Charlie said, you may and should ask the offerors to provide referenced project information. I have a form for this exact purpose, which I put in the RFP, so I get uniform formats and the same info from everyone. I tailor the form to provide RELEVANT information about the project and the offeror's specific role in that project and ask for a reference.

You may think that offerors only provide the "honey" projects but I've found that the references will give straight answers - sometimes to the offeror's dismay. By the way, mailed out reference responses are almost uniformly shallow and meaningless to me. I CALL the references with a checklist of questions and have a frank discussion with them. More work but really worth it.

As I said earlier in this discussion, I state the limit of time in the RFP that I will consider as relevant past performance, unless an offeror can demonstrate relevance to the instant project.
Happy Sails! Joel
P.S. Charlie, somtimes I forget to wear my glasses while finger pecking. I notice typos in my posts and apologize for that!

By Vern Edwards on Friday, September 08, 2000 - 12:31 pm:

Kennedy:

Charlie and Joel hit the nail on the head. FAR 42.1503(e) limits the government's retention of its own records. There are many sources of past performance information besides government agencies.

By Kennedy How on Friday, September 08, 2000 - 02:15 pm:

I suppose my outlook on this issue is colored by the fact that I work within the Army community, and that most of my contractors are Government only. They don't do much in the way of commercial work. Most source selection contacts I have are from evaluators looking for information regarding the performance of said contractor. If I asked, I'm not sure what kind of non-Government source of information a UDLP would give me.....

Maybe it's too narrow or unique an outlook, but that's the community I'm in! On the other hand, I can certainly see getting private industry references for somebody who does work for both.

Kennedy

By Joel Hoffman on Friday, September 08, 2000 - 06:18 pm:

The Contractor can cite the Contract and provide references. Unless the only live references are Military types who moved on, someone can be contacted to provide you the customer feedback. You aren't limited to some Government file on a contract. Happy Sails! joel

By Eric Ottinger on Monday, September 11, 2000 - 10:36 pm:

All,

Here is the answer out of the DoD Past Performance Guide.

“Performance assessment reports shall not be retained longer than three years after completion of the contract performance (except for Construction and Architect-Engineering which are to be retained for six). The performance period is not complete until the end of the warranty period. The completion of the contract, not the age of the annual contract reports determines the retention period for those reports.…”

I don’t believe there is any requirement to destroy records. Under certain circumstances that would be highly imprudent. “Don’t retain” means retire the files or put them somewhere where they will not be accessed for source selection purposes.

In this case the Professor would have done better to have referred directly to the excellent DoD Guide. (Which the reader can easily access using Wifcon. Thanks Bob.)

The Profesosor recommends doing a deviation.

http://askaprof.deskbook.wpafb.af.mil/normal/qdetail.asp?cgiQuestionID=6286&Search_Text=PPI

I would suggest that it would be much simpler to gather the relevant information from other places in the contract file or interview persons directly involved with contract performance.

There is no requirement that we purge our brains or purge other documents in the file.

C

Past Performance and responsibility are related but different (albeit related) issues. Of course criminal or really stupid behavior that would result in a negative responsibility determination would still be relevant after three years.

Eric