CONTRACTOR PERFORMANCE ASSESSMENT REVIEWS – CPARS, PPIRS, and FAPIIS TIDEWATER GOVERNMENT INDUSTRY COUNCIL www.tasc-tgic.org TGIC TRAINING PROGRAM August 18, 2015 Christopher T. Page Terence Murphy Kaufman & Canoles Kaufman & Canoles 757.259.3847 757.624.3178 ctpage@kaufcan.com tmurphy@kaufcan.com

IMPORTANT NOTE The contents of this presentation are intended for general information only and should not be construed or relied upon as legal advice nor as a legal opinion on any specific facts or circumstances.

Introduction Statutory Requirements CPARS PPIRS FAPIIS Use of Past Performance Questionnaires Challenging Past Performance Evaluations Past Performance Protests

Confusion Continues Past Performance Evaluation “alphabet soup” has proven frustrating to industry

Past Performance Requirements Federal Acquisition Streamlining Act of 1994 (“FASA”) Requires agencies to evaluate contractor past performance – in competitively negotiated awards Designed to mirror private industry practice of awarding companies based on past performance Office of Federal Procurement Policy (“OFPP”) promulgated regulations re: contractor performance information in FAR Subpart 42.15

Evaluation Thresholds FAR Subpart 42.15 Agencies generally required to evaluate performance on contracts valued in excess of $150,000 $30,000 for architect / engineer $650,000 for construction contracts IDIQ contracts considered together for threshold In special circumstances – contracts below threshold may be evaluated (extraordinary good or bad performance) However, content of evaluations largely left to agency discretion

CPARS Overview The FAR requires agencies to submit past performance information for use in future source selection purposes to a centralized database called the Contractor Performance Assessment Reporting System (“CPARS”). FAR 42.1502(a).

CPARS Overview Web-based system that collects individual automated contractor performance assessment ratings (“CPARs”) – akin to contractor “report cards” CPARS process establishes procedures for collection and use of Past Performance Information (“PPI”) for all contracts exceeding the applicable thresholds Available to government source selection officials Available to contractors to review and comment on information contained therein NOT available to public

CPARS Objectives Support best value source selection decisions – award proven performers (FAR Part 15) Up to date documentation of contractor’s ability to meet requirements (FAR Part 42) Motivate improved contractor performance Communication between government and contractor series of checks-and-balances to facilitate the objective and consistent evaluation of contractor performance Determine prospective contractor responsibility (FAR Part 9)

CPARS Access Granted through government Focal Points (government employees tasked with entering contract information into CPARS) By definition, CPARS information is Sensitive But Unclassified (“SBU”) To protect the security of CPARS information, all actual data entered into and retrieved from the application is encrypted Treated as “Official Use Only / Source Selection Information” (for FOIA exemption purposes)

CPARS Access Disclosure of CPAR data to any contractor, including advisory and assistance contractors, other than the contractor that is the subject of the report, or other entities outside the Government, is strictly prohibited

CPARS Responsibilities Agency Oversee implementation and use of CPARS Department Point of Contact Obtain Department Point of Contact access to CPARS Assign Agency Points of Contact Agency Point of Contact Coordinate w/ Department POC to obtain Agency access to CPARS Provide metrics for management Contracting Office Establish procedures for CPARS implementation CPARS Focal Point Register all new contracts/orders

CPARS Roles Focal Point Assessing Official Representative (AOR) Overall support for the CPARS process for a particular organization, to include registering contracts, set up and maintenance of user accounts, and general user assistance Assessing Official Representative (AOR) Manually registering contract information for specific contracts/orders within 30 calendar days after award Providing a timely, accurate, quality, and complete narrative Assessing Official (AO) responsible for contracting or overall program execution and is responsible for preparing reviewing, signing, and processing the CPAR

CPARS Roles Designated Contractor Representative Receive the Government evaluation from the AO Review/comment/return the evaluation to the AO within 60 calendar days Request Reviewing Official review Reviewing Official (RO) Provides check – and – balance where disagreement between AO and contractor Review and sign evaluation when contractor indicates non-concurrence w/ CPAR Provide narrative comments to supplement AO

CPARS Workflow Timing Action Contract Registration Enter proposed ratings Validate proposed ratings Contractor Comments Days 1-14 – CR may submit comments Day 15 – Eval sent to PPIRS; marked “pending” if no CR comments Day 61 – CR comment period ends; eval returned to AO Review contractor comments Updated in PPIRS when: AO modifies/sends to RO; RO closes Pending marking removed when AO/RO closes Reviewing official comments / Close

CPARS Timeline 30 days of contract award 335 days after contract award Basic contract information registered 335 days after contract award Evaluation appears on AOR/AO “To Do” List 365-485 days after contract award AOR/AO enters evaluation ratings and narratives AO sends evaluation to contractor

CPARS Timeline 7 days from contractor receipt of evaluation Contractor may request meeting to discuss CPAR Days 1-14 after evaluation sent to contractor Contractor may send comments If contractor sends comments and AO/RO closes – evaluation send to PPIRS Day 15 after evaluation sent to contractor Available in PPIRS w/ or w/o contractor comments Days 15-60 after evaluation sent to contractor Contractor may send comments if none previously provided

CPARS Timeline Day 61 after evaluation sent to contractor Evaluation returned to AO Contractor locked out and may not provide comments Day 61 after evaluation sent to contractor; day 120 after end of period of performance If contractor concurs, either: Close evaluation (updated in PPIRS) Modify and close evaluation Send evaluation to RO Modify and send to RO

CPARS Timeline Day 61 after evaluation sent to contractor; day 120 after end of period of performance If contractor does not concur, either: Send eval to RO (updated in PPIRS as pending) Modify and send to RO Prior to day 121 after end of period of performance RO provide comments and close evaluation Evaluation updated in PPIRS with pending marking removed

CPARS Interim Reports FAR 42.15 requires interim CPAR for all new contracts for all business sectors meeting applicable thresholds w/ period of performance greater than 365 days. Interim CPAR also required at least every 12 months throughout entire period of performance Not cumulative – only assesses performance since last evaluation Accessible by Contracting Officers

CPARS 2014 Merge Release July 1, 2014 - Single CPARS Module to evaluate all types of contracts Construction Previously Construction Contractor Appraisal Support System (“CCASS”) Architect-engineer Previously Architect-Engineer Contract Administration Support System (“ACASS”) Non-systems (services, operations support, IT) Systems

CPARS Merge Release Standardizes contractor past performance evaluation process across ENTIRE Federal government Single evaluation form Single set of evaluation areas Single workflow process FAPIIS Module still part of CPARS application

CPARS Evaluation Form Separate Tabs for: Contractor Name/Address Contract Information Miscellaneous Information Small Business Utilization Ratings Assessor Contractor Rep Original Ratings Modified Ratings Reviewer

CPARS Rating Areas Quality Product Performance Relative to Contract’s Performance Parameters Performance in Terms of Contract’s Quality Objectives Use Quantitative Indicators Wherever Possible Contractor’s Management of the Quality Control Program Quality of the Work or Service

CPARS Rating Areas Schedule Timeliness of Delivery Timely Completion of Contract/Order Milestones Timely Completion of Administrative Requirements

CPARS Rating Areas Cost Control Forecasting Cost Managing Cost Controlling Cost Overrun? Underrun? Not Required for Fixed Price Contracts/Orders

CPARS Rating Areas Management Integration and Coordination of Activity Problem Identification Corrective Action Plans Reasonable and Cooperative Behavior Customer Satisfaction Subcontract Management Program Management Management of Key Personnel

CPARS Rating Areas Utilization of Small Business Compliance with Terms and Conditions for Small Business Participation Achievement of Small Business Subcontracting Goals Good Faith Effort to Meet Small Business Subcontracting Goals

CPARS Rating Areas Proposed Rule: Implements regulations adopted by Small Business Administration in 2013 and amends FAR 19.704 and 52.219-9 Requires all small business subcontracting plans include assurances that “the offeror will make a good faith effort to acquire articles, equipment, supplies, services, or materials . . . from the small business concerns that the offeror used in preparing the bid or proposal, in the same or greater scope, amount, and quality used in preparing and submitting the bid or proposal.” If not – prime contractor must provide written explanation to CO w/i 30 days of contract completion Noncompliance also may be counted against the contractor “in any past performance evaluation of the Contractor.”

CPARS Rating Areas Regulatory Compliance Compliance with Regulations and Codes Financial Environmental Labor Safety Reporting Requirements

CPARS Grading Scale Rating Contract Requirements Problems Corrective Actions Exceptional Exceeds Many – Gov’t Benefit Few Minor Highly Effective Very Good Exceeds Some – Gov’t Benefit Some Minor Effective Satisfactory Meets All Marginal Does Not Meet Some -Gov’t Impact Serious: Recovery Still Possible Marginally Effective; Not Fully Implemented Unsatisfactory Does Not Meet Most Serious: Recovery Not Likely Ineffective

PPIRS Overview After information is entered into CPARS, agencies awarding new contracts are required to use the Past Performance Information Retrieval System (“PPIRS”) to access the past performance information that agencies previously uploaded to CPARS Central repository for CPARs including contractor comments Also receives other statistical information on smaller value contracts Used for source selection purposes

PPIRS Overview Houses adverse actions, including: (i) a non-responsibility determination; (ii) termination for cause; (iii) termination for default; (iv) defective pricing; (v) a determination of contractor fault; (vi) a determination that the recipient is not qualified; (vii) a termination for material failure to comply; and/or (viii) entry into an Administrative Agreement to resolve a suspension or debarment proceeding. Adverse actions in PPIRS are eventually made public through submission to FAPIIS

PPIRS Modules PPIRS – RC (Report Card) Federal regulations require that report cards be completed annually by customers during the life of the contract Query capability for authorized users to retrieve report card information detailing a contractor's past performance Accessible at www.PPIRS.gov

PPIRS Modules PPIRS – SR (Statistical Reporting) Provides past delivery and quality performance information for commodities including contracts under the thresholds established in the PPIRS report card system Criteria available at: https://www.ppirs.gov/pdf/PPIRS-SR_DataEvaluationCriteria.pdf Uses algorithm to compare data

PPIRS Access Restricted to individuals working on source selections, to include contractor responsibility determinations Contractors may view only their own data Contractor must be registered in the System for Award Management (SAM) system and must have created a Marketing Partner Identification Number (MPIN) in the SAM profile to access their PPIRS information PPIRS User Guide - https://www.ppirs.gov/pdf/PPIRS-Awardee_UserMan.pdf

PPIRS Recent Change As of July 01, 2014 ALL evaluations will be made available in the PPIRS for Source Selection Officials within 15 days from the date of delivery when the Government sends the evaluation to the Contractor for comment Available whether or not contractor comments have been submitted and whether or not they have been closed by the government The purpose of this change is to make past performance evaluations available to Source Selections Officials sooner and without the need for AO intervention or closure Contractors must stay on top of timing for submission of comments

PPIRS Recent Change CPARS will submit evaluations to PPIRS on a daily schedule. Evaluations will be submitted to PPIRS on: Calendar day 15 following the AO’s evaluation date; When Contractor comments are provided during the 60 calendar day timeframe; When the AO modifies the evaluation and/or sends it to the RO; When the AO/RO closes the evaluation. Example: If the evaluation was submitted to PPIRS on calendar day 15 without Contractor comments, and on calendar day 17 the CR entered comments and sent the evaluation to the AO, the Contractor’s comments would be reflected in PPIRS the next day.

FAPIIS Overview Federal Awardee Performance and Integrity Information System ("FAPIIS") Operational since April 2010 Consolidated database that centralizes and expands upon information regarding government contractors that is available to contracting officers when making responsibility determinations Designed to enhance the Government’s ability to evaluate the business ethics and quality of prospective contractors competing for Federal contracts

FAPIIS Overview FAPIIS, itself, is a distinct “module” located within the PPIRS Provides a “one-stop shop” for contracting officers to assess government contractor integrity and review past performance data Contains links to all information contained in the primary existing systems into which government contractor information is imputed: PPIRS, the Excluded Parties List System (“EPLS”), the Contractor Performance Assessment Reporting System (“CPARS”), and the Central Contractor Registry (“CCR”)

FAPIIS Overview Does not alter the type of information collected by those systems Collects and organizes this information from numerous sources: Contracting Officers who are to provide non-responsibility determinations and contract terminations Suspending and Debarring Officials who are to provide information on administrative agreements concerning the resolution of suspensions or debarments Agency Procurement Officials who are to provide information regarding contractor past performance Government Contractors who themselves are required to report information concerning “criminal convictions, civil liability, and adverse administrative actions

FAPIIS Scope (1) government contractor performance and past performance reviews; (2) contracting officer non-responsibility determinations and contract terminations for default or cause; (3) agency defective pricing determinations; (4) administrative agreements relating to the resolution of suspensions or debarments; and (5) civil, criminal, and administrative proceedings in which government contractors received adverse outcomes

FAPIIS Logistics Information Reporting Existing systems within the Government are linked to FAPIIS. These systems are continuously in receipt of new information from suspension and debarment and agency procurement officials Agencies to ensure information is reported directly to FAPIIS within 3 working days after a contracting officer issues a final termination for default for cause or default notice a final determination that a contractor has submitted defective cost or pricing date Conversion of termination for convenience to termination for default Suspension and debarment officials are to submit information regarding administrative agreements directly to the FAPIIS

FAPIIS Contractor Reporting Applies to an offeror “submitting a proposal on a Federal contract over $500,000 and having more than $10 million in active contracts and grants as of the time of proposal submission Contractors meeting criteria are required to: designate representatives responsible for the actual submission and receipt of FAPIIS information and submit directly to FAPIIS and ‘update on a semi-annual basis throughout the life of the contract’ information relating to criminal, civil or administrative proceedings occurring within the last five years relating to performance of a Federal contract or grant

FAPIIS Use of Information Any information in FAPIIS, including linked information, may be used to: Make responsibility determinations CO to consider all information in FAPIIS Evaluate offerors’ past performance FAPIIS incorporated into procedures addressing agency evaluations of past performance in FAR 42.1503 since there may be information in FAPIIS, such as terminations for default or cause and defective pricing assessments, that is not in PPIRS but still may be appropriately used, along with information in PPIRS to evaluate an offeror’s performance

FAPIIS Use of Information Imposes additional requirements that contracting officers must (1) “review the information in FAPIIS” when making responsibility determinations for contracts in excess of “the simplified acquisition threshold,” and (2) detail the manner by which the officer “considered” FAPIIS information in making such determinations

FAPIIS Use of Information Review: Contracting officers “shall consider all information in FAPIIS and other past performance information.” 75 Fed. Reg. 14065 (Mar. 23, 2010) However, the regulations provide little guidance as to the manner in which contracting officers should review information. The regulations merely indicates that contracting officers “shall use sound judgment in determining the weight and relevance of the information contained in FAPIIS . . . .” Results in broadened discretion

FAPIIS Contractor Rights Contractors are entitled to ‘timely notification’ when information about them is posted in the FAPIIS module Contractors registered with the SAM can post comments on any information that has been posted by the Government in the FAPIIS module Different than the rebuttal process for past-performance information as specified in FAR 42.1053(b) Remains part of FAPIIS record for 6 years (unless revised by contractor)

FAPIIS Contractor Rights When contracting office obtains information for purpose of making responsibility determination, contractor is entitled to submit additional information before the determination is made

FAPIIS Compliance Tips: Well crafted compliance program can minimalize risk of contractor information reporting error Crux of an effective compliance program is information management To ensure information reported to FAPIIS is accurate, as required, and submitted on time, contractors should assign specific individuals the responsibility of managing FAPIIS submissions Given that information in FAPIIS is available for public and competitor scrutiny, government contractors must be diligent in monitoring that the information submitted is accurate and not in excess of that which is required Must avoid disclosure of proprietary information

PAST PERFORMANCE QUESTIONNAIRES Agencies using Past Performance Questionnaires (“PPQs”) improperly Agencies have imposed the burden on contractors for obtaining additional past performance data through the improper use of PPQs Agencies do this by requiring small businesses to send out PPQs to Government customers that the contractor previously performed for and “ask” that customer to complete the PPQ and send it to the agency procuring the new contract Often prevents small businesses from obtaining contracts w/ government

PAST PERFORMANCE QUESTIONNAIRES If the business is not successful in having its past customer complete and send in the PPQ: proposal will receive a “neutral” rating in the evaluation of its past performance could result in the contractor not receiving the contract Small businesses only have a limited number of past contracts and customers to which they can turn to and ask (repeatedly) to fill out PPQs No statutory or regulatory authority to require customers to complete and submit PPQs

PAST PERFORMANCE QUESTIONNAIRES Use of PPQs as an alternate and/or additional way for agencies to gather past performance information about a contractor circumvents the CPARS system PPQs allow agencies to see past performance information obtained from a contractor’s customer without giving the contractor an opportunity prior to submitting its proposal to respond to a negative evaluation

Challenging Past Performance Evaluations Contractors rightfully concerned about contents and accuracy of evaluations Implications on agency source selection decisions Common Disputes Grading Scale Inflation Unsupported PPI Untimely PPI Lack of notice of unfavorable PPI Failure to document PPI sources Failure to consider relevant PPI Failure to follow evaluation criteria

Challenging Past Performance Evaluations Government Accountability Office (“GAO”) is common forum for protests However, review standard limited to evaluating CO discretion Negative responsibility determination reversed only in case of bad faith - In re M. Erdal Kamisli Co. Ltd. (ERKA Co. Ltd.), B-403909.2, 2011 CPD ¶ 63 If grounds for challenge exist –may file in Court of Federal Claims (“COFC”) or Board of Contractor Appeals

Challenging Past Performance Evaluations Disputes over performance evaluations can constitute a claim within the Contract Disputes Act of 1978 (“CDA”) Record Steel & Construction, Inc. v. United States, 62 Fed. Cl. 508 (2004) Colonna’s Shipyard, Inc., ASBCA No. 56940, 10-2 BCA ¶ 34,494 (2010) (finding that the claim was “relating to a contract” as required by the CDA)

Challenging Past Performance Evaluations CDA Claim Process: Demand submitted in writing to the contracting officer Be the subject of a final decision Need not seek monetary relief Cannot be a mere expression of frustration or disagreement with the agency’s evaluation Kemron Envtl. Servs., Inc. v. United States, 93 Fed. Cl. 74, 95 (2010)

Challenging Past Performance Evaluations Practical Guidance: Avoid premature claims upon receipt of draft evaluation containing negative information Contractor’s written response to PPI must be included in FAPIIS (available to public) Always submit response to “complete the record” in FAPIIS – even if contemplating further appeal

Challenging Past Performance Evaluations Relief Available: Unclear what relief is available to contractors at COFC or Boards of Contractor Appeals Both have declined to issue injunctions Colonna’s Shipyard, 10-2 BCA ¶ 34,494 Doe v. United States, 372 F.3d 1308, 1313-14 (Fed. Cir. 2004)

Challenging Past Performance Evaluations Relief Available: Todd Construction, L.P. v. United States, 88 Fed. Cl. 235 (2009) Contractor sought (1) determination that Air Force’s performance evaluation was unlawful and should be set aside and (2) order Air Force to remove the performance evaluation from the Construction Contractor Appraisal Support System (now available through FAPIIS) Court declined – holding neither form of relief was within its authority Could not cause performance evaluation to be changed or removed Subsequent cases held similarly to Todd Construction Colonna’s Shipyard, Inc., ASBCA No. 56940, 2010-2 B.C.A. ¶ 34,494 (2010) Versar, Inc., ASBCA No. 56857, 2010-1 B.C.A. ¶ 34,437 (2010)

Past Performance Evaluation Protests DKW Communications, Inc., B-411182, B-411182.2 (June 9, 2015) Agency unreasonably failed to consider protester’s positive past performance information that was “close at hand” Contractor alleged agency failed to consider positive information found in a CPARS report related to one of the past performance references submitted for its subcontractor Agency argued the past performance information in the CPARS report was consistent with a past performance questionnaire that the agency did consider as part of its evaluation Agency argued it had discretion not to consider CPARS Report

Past Performance Evaluation Protests DKW Communications, Inc., B-411182, B-411182.2 (June 9, 2015) Agency knew of and had access to evaluation Agency considered a past performance questionnaire relevant to the contract in question as part of its evaluation Contractor could not have included CPARS report as part of its proposal Information considered by agency evaluators was not consistent with evaluation found in CPARS report

Past Performance Evaluation Protests DKW Communications, Inc., B-411182, B-411182.2 (June 9, 2015) Court sustained protest regarding past performance evaluation on basis that “CPARS report is decidedly more positive than the questionnaire considered by the agency as part of its evaluation. Therefore, we do not find the agency’s position, that it considered all relevant information when it considered the past performance questionnaire, to be reasonable.”

KAUFMAN & CANOLES Christopher T. Page Terence Murphy 757.259.3847 757.624.3178 ctpage@kaufcan.com tmurphy@kaufcan.com