Contractor past performance information (PPI) in source selection: a comparison study of public and private sector

Abstract

The following article is taken as an excerpt from the proceedings of the annual Acquisition Research Program. This annual event showcases the research projects funded through the Acquisition Research Program at the Graduate School of Business and Public Policy at the Naval Postgraduate School. Featuring keynote speakers, plenary panels, multiple panel sessions, a student research poster show and social events, the Annual Acquisition Research Symposium offers a candid environment where high-ranking Department of Defense (DoD) officials, industry officials, accomplished faculty and military students are encouraged to collaborate on finding applicable solutions to the challenges facing acquisition policies and processes within the DoD today. By jointly and publicly questioning the norms of industry and academia, the resulting research benefits from myriad perspectives and collaborations which can identify better solutions and practices in acquisition, contract, financial, logistics and program management. For further information regarding the Acquisition Research Program, electronic copies of additional research, or to learn more about becoming a sponsor, please visit our program website at: www.acquisitionresearch.org. For further information on or to register for the next Acquisition Research Symposium during the third week of May, please visit our conference website at: www.researchsymposium.org.;The Federal Acquisition Regulation (FAR) mandates the use of contractor past performance information (PPI) as an evaluation factor in all source selections involving negotiated procurements above $1,000,000. Different agencies within Federal Government have lowered the dollar threshold to as little as $100,000 depending on the type of contract action. Using PPI as a factor in all source selections was a tactic modeled after industry best practices. The Office of Federal Procurement Policy (OFPP) envisioned that industry PPI collected by Federal agencies would eventually be automated, maintained on secure databases, and available to all Government agencies for source-selection purposes. This practice would eventually lead to efficiencies similar to those in the private sector. However, along the way, Government and private-sector industry have begun to disagree about how PPI is collected and how PPI is used. Industry prefers a passive system of collecting delivery and quality data during contract performance, while Federal government uses both a passive system (similar to industry) as well as an active system of pulling PPI during contract performance. Industry uses PPI to establish and maintain a preferred vendor list from which to solicit bids, quotes or proposals, while government uses PPI to assess risk and establish vendor responsibility in a full and open competition environment. Contract award cycle-time within the Federal Acquisition process is more than double that of the private sector due to an evaluation process that is cumbersome, time-consuming, and lacking the efficiencies enjoyed by private industry. Government (the DoD in particular) has recently become more curious regarding industry best practices and how those practices can be implemented in the government--in particular, as a possibility of diminishing the Government Contracting Officer's and the Source Selection team's added burden. This paper will explore through field research the current PPI collection and evaluation process used by the DoD and by those employed in industry. The goal behind such research is, again, industry best practices and improving the DoD's use of PPI as a tool in the acquisition processes.