Is anyone aware of any case law that illustrates a successful way to implement FAR 15.305(a)(2)(iv), which states: "In the case of an offeror without a record of relevant past performance or for whom
information on past performance is not available, the offeror may not be evaluated favorably or
unfavorably on past performance."

OFPP Best Practices recommends to give an offeror half the points available for past performance (e.g., 10/20 points). However, I question how that doesn't treat him favorably compared, say to an offeror with relevant past performance who gets 9/20. Also, I wonder if there has been any case law substantiating their suggested practice.

My first inclination was to not evaluate an offeror in that factor at all, but that really makes an apples to apples comparison close to impossible.

Any comments are greatly appreciated.

Mike W

By Eric Ottinger on Tuesday, June 19, 2001 - 11:24 am:

Mike,

It would be fun to get some of the case law together because we had a long thread on this issue awhile back. You are going to find that the case law, the DoD Guide and the OFPP Guide are all pretty much in sync.

The objective is to give the new start a fair chance to win, but not to tilt the competition so far that the new start has an unreasonable advantage. It would be nice if there was a single formula to reach this result. But there is no single formula that will produce the desired result in every situation.

You will have to pick an approach that you expect will strike the right balance for your particular competitive situation.

You can give the new start the best rating. You can give the new start the average rating. You can give the new start no rating at all.

Personal Opinion: Your selection decision should be based as much as possible on an objective risk assessment. The new start can demonstrate low risk by hiring experienced managers or teaming with experienced subcontractors.

A new start that doesn’t demonstrate anything other than a total lack of experience shouldn’t expect to win unless there is very little competition. That is, all other things (like price) being equal, “neutral” should never beat “good” or “excellent.”

Here is bit of the transcript that I made from the Part 15 Rewrite team satellite broadcast. I think you will find that the case law is entirely consistent with the thoughts of the Rewrite team.

NEUTRAL PAST PERFORMANCE RATING:

LeAntha D. Sumpter: ““Neutral ratings” was probably one of the more controversial aspects. In fact, [it]…was one of the few changes that changed between the last proposed rule and the final rule. The biggest change was the recognition that the FAR Council and the team didn’t have all the answers. And that, what the statute requires is that no offeror either be disadvantaged or advantaged for the lack of past performance, that they receive some kind of equal treatment with other offerors. The nature of how “equal” is “equal” unfortunately we failed to define. So therefore, the specific nomenclature of “neutral” was removed from the rule and does not appear in the final rule. In fact, the statutory language appears in the final rule, in recognition of the fact that this is an area which we feel experience will probably fill in the gaps far better than those of us that try to predict the future.”

Nathan Tash: “…I have one thing to add to that. …We had a great deal of difficulty trying to define how you would work with a “neutral” past performance rating. Something the FAR does include for the first time, however, are ways you can come up [with] or evaluate an offeror based on past performance. Either use predecessor companies or, perhaps, the past performance of key personnel. There are a lot of ways you can come up with a past performance rating for an offeror, even a new entrant into the market, that will really abate the need for a neutral past performance rating.”

Melissa D. Rider: “The neutral past performance rating will really be given very rarely, if at all.”

David A. Drabkin: “That’s the whole idea that we will rarely find a case where there is an entrant into the marketplace that either as a company or a derivative company or as … when you look at their staff or their technical people that somewhere in there, there aren’t people who had some experience at doing business whether with the government or in the private sector. That’s important for everybody to understand, is that past performance is not just past performance with the government, its past performance with anyone in a business context that’s relevant to the source selection.”

Eric

By Kennedy How on Tuesday, June 19, 2001 - 12:07 pm:

I have to wonder why the evaluators would give somebody with relevant past performance only a "9" out of 20. There must be some reason why you would score somebody under half the points available. What you are saying, in this case, is that the neutral is a better choice than the person with relevant past performance.

In that case, I don't really see any problems. If the offeror with relevant past performance was a solid offeror in this area, they should get over "10", in which the issue goes away.

Kennedy

By Eric Ottinger on Tuesday, June 19, 2001 - 12:15 pm:

Kennedy,

Although it is important to keep the conceptual distinction between performance and experience in mind, most solicitations use a single factor, which encompasses both in some fashion; for instance: “past performance doing similar work.”

The offeror who receives 9 points out of 20 may have demonstrated substantial experience but mediocre performance.

Eric

By Mike W. on Tuesday, June 19, 2001 - 02:48 pm:

Eric's correct. In my example, the offeror with 9/20 points had relevant, but mediocre, performance.

When the FAR speaks about "relevant" past performance, I think that clearly indicates that experience is encompassed in past performance. I know there are conflicting court cases in this area, however, if "relevance" doesn't directly tie in experience what other meaning could it possibly have?

By Eric Ottinger on Tuesday, June 19, 2001 - 02:56 pm:

Mike,

I think you would have a hard time actually finding those "conflicting court cases."

Eric

By Mike W. on Tuesday, June 19, 2001 - 03:41 pm:

Eric,

Nash & Cibinic, in "Formation of Government Contracts" (Third Edition) state that, "...the cases are conflicting on the issue of whether experience is included within the assessment of past performance." This text states that in one GSBCA case (GSBCA 13272-P, 95-2BCA, the board states that " 'it is unreasonable to suggest that past performance does not encompass experience.'" However, in Comp Gen Dec. B-272526 the CompGen "indicated that experience was not included in the evaluation of past performance." N&C go on to state that, "Other cases appar to indicate that there is a good deal of confusion on this issue" and they reference other cases. (See page 736-737 of the paperback version of the above referenced text.)

By Vern Edwards on Tuesday, June 19, 2001 - 08:46 pm:

Mike W.

The best thing you can do for yourself is to research the GAO decisions. Go to http://www.gpo.gov, then click on Access to Government Information Products. Scroll down to General Accounting Office and click. Choose Comptroller General Decisions and when the search engine appears type <"past performance" AND neutral>. You will get a large number of decisions. Read the decisions in which neutral assessments are mentioned in the digest paragraphs. You will get many examples of successful implementation of FAR 15.305(a)(2)(iv).

You can also email me privately and I will give you some ideas.

By Eric Ottinger on Tuesday, June 19, 2001 - 09:37 pm:

Mike,

Yes. Sure.

This is pretty much the place that an ugly thread finished up a year or two ago.

I don’t doubt that you can find some cases like that if you go back far enough.

You aren’t going to find any recent cases (say over the last three years) that would cause you to question the guidance in the OFPP Guide (recently updated) and the DoD Guide.

There is no problem if you wish to address performance and experience with the same factor. It is done all of the time.

If you wish, I can cite any number cases to demonstrate that the advice in the OFPP Guide and the DoD Guide is OK with the courts and the Comp. Gen.

I’m not going to look for a case that contradicts this guidance because I don’t think there is one.

Perhaps, one of the “experts” who were so hard over on this issue, will undertake to find a recent case.

I shouldn’t have given you such an abrupt response. I’m pleased that you brought this issue up. It will be interesting to see what develops.

Eric

By Kennedy How on Friday, June 22, 2001 - 12:23 pm:

Well, yes, I can see where we've used past performance and experience as one combined factor. But, look behind what you just said. What you said, in relation to the 9/20 guy, is that he has lots of experience at mediocre performance. If that's what you want, you should score him higher. On the other hand, if mediocre performance ISN'T what you want, maybe it's time to try somebody else, then you might realistically want to score the neutral as a 10/20.

The point is this: You have somebody writing a source selection plan, that will allow to select the best offeror to provide what you require. In that sense, if you are satisfied with a historically mediocre performer, then that's what the plan should reflect. If you want to get away from this type of guy, then your plan should reflect the ability to pick somebody with less actual performance, but more potential.

I remember the days where we had a guy who was chronically delinquent, but always provided top-notch items. He was always low, but not by much. There was another guy who was a pretty good contractor, on time, but his products weren't as top notch, but met our "minimum requirements". But, since this guy was always 5-10% higher, we couldn't do anything about it. In a case like this, it'd be appropriate to evaluate the tradeoffs between cost, quality, and delivery.

Kennedy

By Anonymous on Friday, June 22, 2001 - 08:34 pm:

There's a consulting firm I know that does great technical work and the program offices love them. They get tons of business even though they charge high labor rates. Their gross margins are so high that they can afford to send 5 to 6 managers to meetings that one accounting technician could take care of. They get a lot of their work from my agency sole source (only one particular "expert" can do the job and he works for this company)or they win trade offs due to quality of work..

The firm's accounting and billing is so bad that I have spent 40 manhours trying to get one delivery order to balance with what was proposed while another company working an equivelent task order was done in 2 hours. Reports are late a good percent of the time but the program office just says that it is ok because "good work takes time".

The program office knows that the company is always late and trys to over bill, but the company is invited back over and over again.

This firm has three chrome and glass towers not due to great pricing, on time delivery, or ease of administration. They just have the program office personnel believing that they have the best "experts" in the field.

I have mentioned this to KO's from other agencies and they report that they dislike this firm for the same reasons but their program office's also insist on using them.

What is the purpose of my rant? It is just to say that in the trade off process, on time delivery, saving funds and good billing practices are usually not as important as credentials, good PR, and friends in high places.

By ex-fed on Saturday, June 23, 2001 - 12:43 pm:

One does sometimes wonder how much of this sort of "product quality" is due to smoozing and PR.

I've also seen firms with such reputations, higher cost and continued repeat business that I thought worth the price. They also took pride in being on time, providing accurate billing and made it clear that they saw quality as being pervasive.

I have to wonder about a firm's real quality when it allows such deficiencies in critical areas. I also have to wonder at government procurement that allows this to continue. It seems somewhat like continuing to patronize a restaurant with absolutely great tasting food, paying the high check, and all the time fully knowing the quality does not extend back into the kitchen on sanitation and may cause illness. No thanks.

As far as I am concerned the public employees allowing this to continue without penalty are negligent.

By Tellum on Sunday, June 24, 2001 - 07:05 pm:

Anonymous:

I'll bet that more often than not the contractor's reports are "late" and that it "overbills" because the program office makes changes to the work as the contractor performs, adding this or that requirement without telling you. I'll bet that's why the program office doesn't complain about late reports.

As you said, the contractor does "great technical work." (That's why it has the glass towers.) The program office couldn't care less about your problems.

And I'll also bet that your problems are due in part to the Government's ridiculous invoicing requirements and payment procedures. I'm a contractor who does work for both the Government and the private sector. When I bill my private sector clients a simple three line email will do; but to bill the #@%* Government I have to fill out EFT and other forms or register at half a dozen websites and submit my life history along with ten copies of the invoice. Then I get to wait three months to get paid after placing six calls to someone who is never at his or her desk and who, when finally reached, claims that they never received the invoice or heard of my company.

There are bad contractors and there are lousy customers.

By Anonymous on Sunday, June 24, 2001 - 07:30 pm:

Tellum has a point about excess government invoicing requirements. On the other Tellum is off base by a mile. A government contractor responding to modified requirements that increase cost by the PO without having the contracting office in the loop is just plain stupid. I even doubt large companies would pay a "three line email" invoice under the equivalent circumstances.

The government system is no secret. The PO is constrained by law and regulation. It is almost as if a private corporation published clear guidelines and made them part of all contracts that it had a particular chain of command with respect to contracts, that people outside that chain had no authority to modify contracts and payment would not be made for work done outside the recognized and authorized process. I think Tellum would have a bit of difficulty with that e-mail if it turned out the delay and overbill was the result of disregarding clear ground rules.

Some companies may be so foolish as to leave the door open to every employee having contract direction authority. Most do not as seen in almost all printed "customer agreements." The government has similar rules and if anything overpublishes them. Only if the PO and contracting shop are negligently flouting those rules would I have any sympathy for the contractor in the situation Tellum describes in the first paragraph. The contractor is knowingly "at risk."

By Tellum on Monday, June 25, 2001 - 02:25 pm:

Anonymous:

If contractors waited for the contracting office to get into the loop before responding to changes in Government requirements, nothing would get done. Contractors respond to the customer, which means the program office. We do it now; we have always done it; and we always will do it, contracting officers be damned. We do it because the program offices are the ones with the need and the money. In your case, as you say, it doesn't seem to hurt the contractor. Although a good CO can be a real help to everybody and can make things happn, most of them are pains in the you-know-what and contribute little value-added. If you don't believe me, ask government program personnel.

Plenty of private sector clients pay on the basis of three line emails! Problems are sorted out by telephone between the contractor and the client. Some big companies are bureaucratic and pay slow, but I've never run into one as bureaucratic or as slow-paying as the Government.

When dealing with the private sector I don't have to mess around with "contracting officers." I just finished $25,000.00 job for a large, well-known firm, and I got paid before I even saw the purchase order. The invoice was an email to the customer's project manager. No problem. I did a $12,000.00 job for a Government agency in strict accordance with the rules and they were so confused about their own payment procedures that it took me six months to get paid. (They paid three months worth of interest.)

Complex change order rules, invoicing instructions, and payment procedures are typical of the Government, not the private sector. Contractual relations in the private sector are based on trust and the long-term view, not on lengthy contract documents and invoicing instructions. The main exception is Government prime contractors; some of them have been infected by their big customer.

And don't blame the regs. I know the FAR and the DFARS better than most of the COs that I deal with and the regs are not nearly as bad as they say they are. I wish I had nickel for every CO that I've had to educate.

By Linda Koone on Monday, June 25, 2001 - 04:02 pm:

Tellum's educating COs while admitting that he doesn't take direction under a contract from the CO.

A nickel for every CO that Tellum educated?

If he's educated 5,000 of them, that's only $250.00, so it makes me wonder if Tellum is solely responsible for the current state (with respect to education) of the federal contracting corps?

By Tellum on Monday, June 25, 2001 - 04:46 pm:

$250 may not sound like much, but I need the money to eat while I'm waiting for payment from DFAS.

By Anonymous on Tuesday, June 26, 2001 - 07:59 am:

You're right ,its not the regs...its people such as yourself that generate the most problems for COs.Contractors and program officers generate changes which require additional funding for example but neither bother to inform the contract admin folks and then you wonder why you cannot just present an invoice and get paid. Its nice you're so responsive to the governments needs...but one does so at ones risk.

By Anonymous on Tuesday, June 26, 2001 - 10:30 am:

I have a feeling Tellum would have the same problem with private industry if he and a lower level manager conspired to bust the budget and corporate got an unexpectedly large bill for a delayed gold brick product. At the least he'd find himself "off the list" and the manager would be pounding pavement. Tellum would also find there is no appeals process or "fairness" whining because once he gets on the wrong side of those who really control budget in industry he's dead meat. At worst he'd be in court having real fun.

Since the Program Offices in government do not really control the budget (Congress does) as Tellum mistakenly states and only manage their allocation Tellum and the Program Offices in collusion need a swift kick from an IG and possibly a Prosecutor's office. We've been winking at this garbage too long and believing it is only "efficiency." It is actually inefficient as it allows these little (and not so little) side deals to go on with damage to the larger picture.

As an example, I've known programs that had to slow down because another had gotten in similar trouble and soaked anticipated budget. Tellum's "solution" is not business. It is how to raid the public purse and grab a chunk with selfish disregard of any public interest.

An efficient program will communicate and coordinate with internal government and external contracting people to solve the problems within the system without the reckless collateral damage actions such as Tellum describes cause. What Tellum describes is more similar to the big hog crawling into the trough for more feed. Frankly, some stripes, not pin stripes, sound good here.

By Anonymous on Tuesday, June 26, 2001 - 11:41 am:

ANON 10:30
Amen

By Vern Edwards on Tuesday, June 26, 2001 - 12:24 pm:

Anonymous--

I think you went over the top in the way you've reacted to Tellum, what with your references to IGs and prosecutors. I re-read Tellum's comments and while I think that he/she has been needlessly provocative, I didn't see any description of anything illegal on his/her company's part. I think Tellum is describing what is probably a pretty routine way of doing business under government contracts. The program office wants something done and asks the contractor to do it before telling the contracting officer about its plans. The contractor tries to be responsive to its "customer," knowing that there is some risk, but not too much.

In any event, Tellum's company is not breaking any law by simply doing what the program manager asks it to do without first checking with the contracting officer. It's just taking a chance that it won't get paid. I don't know of any standard clause that forbids contractors from doing that, and contracting officers usually just warn contractors that they do it at their own risk. In my nearly thirty years of experience I've come to believe that's not much of a risk.

Tellum did not say that program offices control the "budget"; what Tellum said was that they control the "money," which I assume means the money that has already been appropriated. If so, then Tellum is right. If the program manager has the money and wants to pay the contractor for the work, then the contractor will get paid for the work. The most the contracting officer can do is hassle them.

Moreover, the government program manager may not be violating any statute by making an unauthorized commitment. An unauthorized commitment is not necessarily a violation of the Anti-Deficiency Act, and I don't know of any statute that provides for criminal penalties for making unauthorized commitments.

Tellum's comments should lead us to ask why program managers and contractors violate the rule that says only a contracting officer may obligate the government. I believe that many of them violate that rule routinely. Perhaps the rule is not well-adapted to practical realities and so people do what they always do--they adapt, they improvise, they overcome. I believe that some of them do it with the tacit approval of the contracting officer. Most of them don't do it with any criminal intent; they do it because they think they need to in order to get things done. They continue to do it despite warnings and threats because they do not perceive the warnings and threats to be credible.

Responding to comments like Tellum's with threats of IG investigations and criminal prosecutions simply further isolates contracting officials from program officials and contractors without solving the underlying problem. Besides, I don't think you have a snowball's chance in Hades of getting a Federal prosecutor to take action on the kind of thing Tellum has described.

By formerfed on Tuesday, June 26, 2001 - 12:40 pm:

I completely agree with Vern's comments. What Tellum describes is reality. There are COs that show genuine interest in their programs. Most program managers are thankful for that kind of CO support. However, in too many cases, CO's don't want to get concerned in technical and program details and can't spare the time. It's the old "that's not my job" attitude, and that leads to the routine situation Tellum describes - the work gets done, changes are made by programs and the contractor, and the CO gets involved after everything is worked out.

By Anonymous 10:30 on Tuesday, June 26, 2001 - 01:15 pm:

Perhaps IG and Prosecutor action is wishful thinking and "over the top" but something needs to be done to stop the rogue processes Tellum describes and apparently others at least endorse by turning a blind eye and justifying as "business like." In reality it is not a contracting officer problem. It is a management problem. The real solution lies in the hands of the top management and links right up the chain to the Cabinet heads. The agency manager should not tolerate this. If so, the next level up should not.

What Tellum describes is a tree view with disregard for the forest. Projects and programs are interrelated. They may be tightly related with unfortunate schedule and budget dependencies. They may be very loosely related with the only consequence being a sucking up of funding needed by other efforts to meet the unexpected needs of Tellum's little games with his/her PM. In either case it is a disease that spreads throughout the agency. I've seen, and I expect others have too, a number of efforts who ran this sort of private gaming so that the agency's mission was degraded by multiple schedule and budget problems. Everybody got sick due to a few careless or loose dealing efforts with contractor and government teams acting as if they were the only effort in town.

In the first case Tellum's technique solves one project's problem at the expense of the overall program's schedule and budget. Part of this is the government's own fault in not adequately isolating the full program under one strong Program Manager who wouldn't tolerate for a minute these rogue projects.

In the second case the technique has no direct schedule effect on other programs. It has an indirect effect. The agency is reluctant to take the hard and correct legal path of exercising discipline on its own rogue players and facing court action to deny payments to the cooperative contractor. It then "reallocates" resources to pay the bill. As a result well managed programs find current or out year reserves vanishing. They may even be ordered to scrub their own schedules to squeeze out funding for the sick program. I've seen it. I'm sure others have seen it as well. The result is not private industry efficiency, it is a generally sick set of efforts injuring the agency's mission.

No private company who expects to stay out of Chapter Seven or Chapter Eleven will tolerate such behavior. Payments may be streamlined and there may be no money colors (R&D, O&M, etc.), but any manager running off with their contractor to cause such havoc will not last long. The contractor won't be invited back and there is no Congressman to run to for assistance. Dead meat without appeal is a good description. I've seen that too.

An "excellent product" delivered at cost of overall chaos is not an excellent product. It is a well oiled, self serving disease organism in the corporate body. Efforts can be efficient and react to unexpected needs without such rogue action. It takes discipline. Continued acceptance of what Tellum describes in government is a true "waste, fraud and abuse."

By Anonymous on Tuesday, June 26, 2001 - 01:54 pm:

ANON 10:30
AMEN AGAIN.

By Vern Edwards on Tuesday, June 26, 2001 - 02:10 pm:

Anonymous--

What Tellum has described does not come anywhere close to being fraud, waste and abuse.

Program officials decide whether or not to spend money and how, not contracting officers. If they mismanage their money it does not matter whether they did it through unauthorized commitments or authorized commitments.

Unauthorized commitments are not good things. But you won't prevent them by charging well-meaning people with fraud, waste and abuse. Prevention will requirement a more thoughtful analysis of the problem.

By Eric Ottinger on Tuesday, June 26, 2001 - 03:01 pm:

All,

I agree with Vern.

We should be nice to Tellum. Anyone willing to speak so frankly in this chat room should be welcome.

I don't know what kind of statement of work he has. It may be very general with a lot of room for interpretation.

I don't know anything about his PCO.

I don't know whether the direction and redirection that he receives from his technical counterpart results in any significant cost impact.

One thing that I learned early on is not to jump to any large conclusions until I have all of the facts.

On the other hand, no contracting officer, who knows what he/she is doing, is going to agree that anyone should be giving significant technical direction without the contracting office in the loop.

Tellum knows this. That is why he is having so much fun poking us.

Eric

By Anon2U on Tuesday, June 26, 2001 - 05:50 pm:

As I promoted in a different string, the program manager should be the "business manager" since he controls his budget and he should be held responsible for good business decisions. The contracting officer should be the specialist that helps him make better decisions by informing him of the regulations and the law. I even suggested contracting officers should get law degrees versus MBAs.

Program office personnel almost always have more market research information than contracting personnel because they specialize and are constantly researching the equipment, supplies and services that pertain to their small area of expertise. KO's, in most cases, cannot specialize and are constantly trying to diversify in order to get the broad knowledge needed for promotion. I feel the technician is not doing his job of being an expert in his field if I know about the market than he does.

By Anon2U on Tuesday, June 26, 2001 - 05:52 pm:

P.S. It seems we've strayed a long way from the "neutral rating for past performance" that started this.