Federal Acquisition Regulation; Documenting Contractor Performance, 37704-37706 [2011-16169]

Agencies

• General Services Administration
• National Aeronautics and Space Administration
• DEPARTMENT OF DEFENSE

[Federal Register Volume 76, Number 124 (Tuesday, June 28, 2011)]
[Proposed Rules]
[Pages 37704-37706]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16169]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 8, 12, 15, 42, and 49

[FAR Case 2009-042; Docket 2011-0087; Sequence 1]
RIN 9000-AM09


Federal Acquisition Regulation; Documenting Contractor 
Performance

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to provide Governmentwide standardized 
past performance evaluation factors and performance ratings, and to 
require all past performance information be entered into the Contractor 
Performance Assessment Reporting System (CPARS), the Governmentwide 
past performance feeder system.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat at one of the addressees shown below on or 
before August 29, 2011 to be considered in the formation of the final 
rule.

ADDRESSES: Submit comments in response to FAR Case 2009-042 by any of 
the following methods:
     Regulations.gov: https://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by inputting ``FAR Case 
2009-042'' under the heading ``Enter Keyword or ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``FAR Case 2009-042.'' Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``FAR Case 2009-042'' on your attached document.
     Fax: (202) 501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 7th 
Floor, Washington, DC 20417.
    Instructions: Please submit comments only and cite FAR Case 2009-
042, in all correspondence related to this case. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Curtis E. Glover, Sr., Procurement 
Analyst, at (202) 501-1448 for clarification of content. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAR Case 2009-
042.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR because the 
Office of Federal Procurement Policy (OFPP) requested that FAR parts 8, 
12, 15, 42, and 49 be revised to include recommendations from the 
Government Accountability Office Report GAO-09-374, Better Performance 
Information Needed to Support Agency Contract Award Decisions and 
OFPP's memorandum dated July 29, 2009, Improving the Use of Contractor 
Performance Information. These changes provide Governmentwide 
standardized evaluation factors and rating scales for the evaluation of 
contractor performance in the FAR. The FAR change also incorporates 
policy guidance outlined in OFPP's memorandum dated January 21, 2011, 
Improving Contractor Past Performance Assessement: Summary of the 
Office Of Federal Procurement Policy Review, and Strategies for 
Improvement. Up until September 30, 2010, agencies had the option of 
using various past performance reporting feeder systems such as the 
Department of Health and Human Services (DHHS), National Institutes of 
Health's (NIH) Contractor Performance System (CPS), the Department of 
Defense's Contractor Performance Assessment Reporting System (CPARS), 
and other agency systems to report their evaluations into the 
Governmentwide Past Performance Information Retrieval System (PPIRS), 
each of which included different evaluation factors and rating scales. 
With the need to standardize past performance reporting practices and 
to enhance reporting metrics, the Government transitioned to one past 
performance feeder system, CPARs. DHHS/NIH, OFPP, and the DoD CPARS 
program office reached a decision not to revamp the CPS and to 
officially end service to all customers on September 30, 2010. See 
NIH's complete message on their Web site at https://cps.nih.gov. 
Agencies using CPS transitioned to CPARS. Agencies currently using 
other systems must prepare to transition to CPARS in the near future. 
Agencies' migration to CPARS, one feeder system into PPIRS, presented 
an opportune time to standardize the evaluation factors and rating 
scales for the evaluation of contractor performance.
    The proposed FAR revisions include the following:
    (1) Addition of language in FAR 42.1501 to provide for the use of 
CPARS as the Governmentwide past performance information feeder system 
into PPIRS.
    (2) Revision of FAR 42.1502 to move the language in paragraph (a) 
``The content of the evaluations should be tailored to the size, 
content, and complexity of the contractual requirements'', to FAR 
42.1503(b).
    (3) Addition of language in FAR 42.1503 to provide for 
Governmentwide standard evaluation factors and a five scale rating 
system, which reflects the rating definitions contained in the CPARS 
Policy Guide. Also, incentive-fee and award-fee contract performance 
ratings will be entered into CPARS.
    (4) References to FAR part 42 changes in FAR part 8, 12, and 15.
    This proposed rule is a follow on to two previous FAR rules FAR 
Case 2006-022, Contractor Performance Information (74 FR 31557) 
published July 1, 2009, and FAR Case 2008-016, Termination for Default 
Reporting (75 FR 60258) published September 29, 2010. FAR Case 2006-022 
established thresholds for contractor performance assessments. FAR Case 
2008-016 required the submission of contractor performance assessments 
for defective cost or pricing data and terminations for default or 
cause.

[[Page 37705]]

II. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

III. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this proposed rule to have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq., because the proposed rule codifies in the FAR existing guidelines 
and practices. The evaluation factors and rating system language 
proposed are currently that which are used by Federal agencies. There 
are no new requirements on small businesses.
    Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. DoD, GSA, and NASA invite comments from small business 
concerns and other interested parties on the expected impact of this 
rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2009-042), 
in correspondence.

IV. Paperwork Reduction Act

    The proposed rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 8, 12, 15, 42, and 49

    Government procurement.

    Dated: June 22, 2011.
Millisa Gary,
Acting Director, Federal Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 8, 12, 
15, 42, and 49 as set forth below:
    1. The authority citation for 48 CFR parts 8, 12, 15, 42, and 49 
continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES


8.406-4  [Amended]

    2. Amend section 8.406 by removing from the last sentence of 
paragraph (e) ``42.1503(f)'' and adding ``42.1503(h)'' in its place.


8.406-7   [Amended]

    3. Amend section 8.406-7 by removing ``evaluation'' and adding 
``annual evaluation'' in its place.

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.403  [Amended]

    4. Amend section 12.403 by removing from the last sentence of 
paragraph (c)(4) ``42.1503(f)'' and adding ``42.1503(h)'' in its place.

PART 15--CONTRACTING BY NEGOTIATION


15.407-1  [Amended]

    5. Amend section 15.407-1 by removing from the fifth sentence of 
paragraph (d) ``42.1503(f)'' and adding ``42.1503(h) in its place.

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES


42.1500  [Amended]

    6. Amend section 42.1500 by removing from the last sentence 
``However,'' and adding ``See subpart 16.4. However,'' in its place.
    7. Revise section 42.1501 to read as follows:


42.1501  General.

    (a) Past performance information (including the ratings and 
supporting narratives) is relevant information, for future source 
selection purposes, regarding a contractor's actions under previously 
awarded contracts. It includes, for example, the contractor's record 
of--
    (1) Conforming to contract requirements and to standards of good 
workmanship;
    (2) Forecasting and controlling costs;
    (3) Adherence to contract schedules, including the administrative 
aspects of performance;
    (4) History of reasonable and cooperative behavior and commitment 
to customer satisfaction;
    (5) Reporting into databases (see subparts 4.14 and 4.15, and 
reporting requirements of 9.104-7);
    (6) Integrity and business ethics; and
    (7) Business-like concern for the interest of the customer.
    (b) All past performance information shall be entered into the 
Contractor Performance Assessment Reporting System (CPARS), the 
Governmentwide assessment reporting tool for all past performance 
reports. Instructions for submitting assessments into CPARS are 
available at https://www.cpars.gov/.
    (c) Agencies shall monitor their compliance with the past 
performance reporting requirements in 42.1502.
    8. Amend section 42.1502 by--
    a. Removing the last sentence from paragraph (a);
    b. Revising paragraph (b);
    c. Revising the first sentence of paragraph (c);
    d. Removing from paragraph (d) the words ``task order and delivery 
order'' and adding ``task-order and delivery-order'' in its place; and
    e. Removing from paragraph (i) ``42.1503(f)'' and adding 
``42.1503(h)'' in its place.
    The revised text reads as follows:


42.1502  Policy.

* * * * *
    (b) Except as provided in paragraphs (e), (f) and (h) of this 
section, agencies shall prepare, at a minimum, an annual evaluation of 
contractor performance for each contract that exceeds the simplified 
acquisition threshold.
    (c) Agencies shall prepare an annual evaluation of contractor 
performance for each order that exceeds the simplified acquisition 
threshold placed against a Federal Supply Schedule contract, or under a 
task-order contract or a delivery-order contract awarded by another 
agency (i.e. Governmentwide acquisition contract or multi-agency 
contract). * * *
* * * * *
    9. Revise section 42.1503 to read as follows:


42.1503   Procedures.

    (a) Agency procedures for the past performance evaluation system 
shall generally provide for input to the evaluations from the technical 
office, contracting office and, where appropriate, end users of the 
product or service. Agency procedures shall identify and assign past 
performance

[[Page 37706]]

evaluation roles and responsibilities to those individuals responsible 
for preparing interim and final performance evaluations (e.g., 
contracting officer representatives and program managers). If agency 
procedures do not specify the individuals responsible for past 
performance evaluation duties, the contracting officer will remain 
responsible for this function. Those individuals identified may obtain 
information for the evaluation of performance from the program office, 
administrative contracting office, audit office, end users of the 
product or service, and any other technical or business advisor, as 
appropriate. Interim evaluations shall be prepared on an annual basis, 
in accordance with agency procedures.
    (b)(1) The evaluation report should reflect how the contractor 
performed. The report should include clear relevant information that 
accurately depicts the contractor's performance, and be based on 
objective facts supported by program and contract performance data. The 
evaluations should be tailored to the contract type, size, content, and 
complexity of the contractual requirements.
    (2) Evaluation factors for each assessment shall include, at a 
minimum, the following:
    (i) Technical or Quality.
    (ii) Cost Control (as applicable).
    (iii) Schedule/Timeliness.
    (iv) Management or Business Relations.
    (v) Small Business Subcontracting (as applicable).
    (3) These evaluation factors, including subfactors, may be 
tailored, however, each factor and subfactor shall be evaluated and 
supporting narrative provided.
    (4) Each evaluation factor, as listed in paragraph (b)(2) of this 
section, shall be rated in accordance with a five scale rating system 
(e.g., exceptional, very good, satisfactory, marginal, and 
unsatisfactory). Rating definitions shall reflect those contained in 
the CPARS Policy Guide available at https://www.cpars.gov/.
    (c)(1) When the contract provides for incentive fees, the 
incentive-fee contract performance evaluation shall be entered into 
CPARS. (See 16.401(f).)
    (2) When the contract provides for award fee, the award fee-
contract performance adjectival rating as described in 16.401(e)(3) 
shall be entered into CPARS.
    (d) Agency evaluations of contractor performance, including both 
negative and positive evaluations, prepared under this subpart shall be 
provided to the contractor as soon as practicable after completion of 
the evaluation.
    (e) Agencies shall require--
    (1) Performance issues be documented promptly during contract 
performance to ensure critical details are included in the evaluation;
    (2) The award fee determination, if required, align with the 
contractor's performance and be reflected in the evaluation;
    (3) Timely assessments and quality data (see the quality standards 
in the CPARS Policy Guide at https://www.cpars.gov/) in the contractors 
past performance evaluation; and
    (4) Frequent assessment (e.g., monthly or quarterly) of agency 
compliance with the reporting requirements in 42.1502, so agencies can 
readily identify delinquent past performance reports and monitor their 
reports for quality control.
    (f) Agencies shall prepare and submit all past performance reports 
electronically into the CPARS at https://www.cpars.gov/. These reports 
are transmitted to the Past Performance Information Retrieval System 
(PPIRS) at https://www.ppirs.gov. Past performance reports for 
classified contracts and special access programs shall not be reported 
in CPARS, but will be reported as stated in this subpart and in 
accordance with agency procedures. Agencies shall ensure that 
appropriate management and technical controls are in place to ensure 
that only authorized personnel have access to the data and the 
information safeguarded in accordance with 42.1503(b).
    (g) Agencies shall use the past performance information in PPIRS 
that is within the last three years (six for construction and 
architect-engineer contracts) and information contained in the Federal 
Awardee Performance and Integrity Information System (FAPIIS), e.g., 
termination for default or cause.
    (h) Other contractor performance information. (1) Agencies shall 
ensure information is reported in the FAPIIS module of CPARS within 3 
working days after a contracting officer--
    (2) Agencies shall establish CPARS focal points who will register 
users to report data into the FAPIIS module of CPARS (available at 
https://www.cpars.gov/, then select FAPIIS).
    (3) The primary duties of the CPARS focal point is to administer 
CPARS and FAPIIS access. Agencies must also establish PPIRS group 
managers. The primary duties of the PPIRS group managers are to grant 
or deny access to PPIRS. The CPARS Reference Material, on the Web site, 
includes reporting instructions.

PART 49--TERMINATION OF CONTRACTS


49.402-8  [Amended]

    10. Amend section 49.402-8 by removing ``42.1503(f)'' and adding 
``42.1503(h)'' in its place.

[FR Doc. 2011-16169 Filed 6-27-11; 8:45 am]
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