Contractors often struggle to define a discriminating value proposition. While a value proposition is certainly comprised of your service or product solution, it also incorporates your past performance. A proposal demonstrates to the Government a company’s prospective ability to perform the work. How does the Government gain confidence in your prospective ability to deliver your solution at high quality and low risk? By examining your past performance, both on relevant contracts, as well as trends across time.
Past Performance Ratings Are Trending Towards Satisfactory
Past performance is almost always an evaluation factor whether you are bidding a competitive best value trade-off opportunity, Low Price Technically Acceptable (LPTA), sole source, or other procurement methods including Other Transaction Authority (OTA) contracts. Yet, recent analysis shows that more and more Contracting Officers (COs) are grading their contractors as Satisfactory in the Contractor Performance Assessment Reporting System (CPARS). Overall, from 2010-2017, the percentage of Satisfactory ratings has increased while the percentage of Exceptional ratings has decreased.
A Satisfactory rating means that the “performance meets contractual requirements.” Meeting requirements is definitely not a discriminator, but COs have little incentive to grade performance higher than Satisfactory as a higher rating requires that they substantiate performance exceeded requirements and state the benefits achieved. Writing the required substantiating comments potentially takes hours of work, perhaps involving the need to locate, review and analyze status reports or Monthly Progress Reviews (MPRs) for evidence. Even if the CO digests these reports, they may include little in the way of substantiating quantitative or qualitative proof.
Why Should You Care?
Past performance ratings impact your ability to win option years, recompetes and new business. In addition, the General Services Administration (GSA) has increased the importance of these ratings in Multiple Award Contract (MAC) vehicle procurements such as Alliant 2 and OASIS. In the current OASIS Small Business on-ramps, bidders may include up to five past performances. The difference between five Satisfactory ratings and five Exceptional ratings is 450 points per project, or a total of 2250 points which could certainly represent the difference between a win and a loss.
Let’s look at another example. Suppose you are bidding a best value trade-off opportunity where you are proposing a discriminating technical solution. With Satisfactory CPARS ratings, it will be difficult to prove you perform high quality work with excellent results. If your price is the same or slightly higher than competitors, the CO will not be able to justify the benefits of awarding to your firm.
What actions can you take to improve interim and final CPARS ratings? These five tips will help you discriminate your past performance and your future proposals.
#1 Define How to Exceed Requirements
For contracts with quantitative performance measures, Service Level Agreements (SLAs) or Acceptable Quality Levels (AQLs), how to exceed requirements is clear. However, many contracts are not so clearly performance-based and/or lack quantitative quality measures. At project kick-off, add to the action item list developing clear definitions of meeting versus exceeding requirements. The more quantitative measures you can identify, the better in the long run for proving that you exceeded requirements. Along with these definitions, articulate the resulting benefits. Did exceeding requirements reduce costs, increase quality, improve customer satisfaction, reduce risk?
Once the management team identifies these measures, make sure that the entire team is incentivized to exceed requirements where possible. On the spot awards recognitions, and kudos as well as more formal bonuses and promotions will drive the project team to excel. The more the team excels, the more you can ultimately drive past performance ratings upward.
#2 Train Project and Program Managers (PMs) to Gather Proof
It is very difficult to gather solid evidence months or years into contract performance. PMs have a lot on their plate, and when we ask them to research and document a year’s worth of proof, we create a large unbillable task. If instead we train PMs how to gather evidence of achievements that exceed requirements as well as written and oral kudos from customers, it will take minutes of each day. Instruct the PMs on the importance of substantiation for status reports and performance reviews as well as the future recompete and other related bids. Create a searchable repository of different types of proof points to mine for future use.
#3 Show PMs How to Write Better Status Reports
Most status reports and MPRs report on completed and planned work. Once you have defined how to exceed requirements and taught PMs to gather evidence, add a section to your standard reports and progress meetings to discuss ways the team exceeded expectations and the resulting benefits to the Government. Where possible, ensure the PMs include quantitative proofs, and always highlight verbal and written customer kudos. At year’s end, you can quantify these qualitative measures of your performance; for example, we received 52 emails expressing satisfaction with our work. Include in your best practice repository examples of “gold standard” status reports for PMs to emulate.
What happens if you have a problem on the contract? You can still achieve an Exceptional CPARS rating as long as corrective action effectively solved the problem. FAR 42.15 states that as long as the “contractual performance of the element or sub-element being evaluated was accomplished with few minor problems for which corrective actions taken by the contractor were highly effective,” an Exceptional rating is warranted. Therefore, instruct PMs to document these effective corrective actions in status reports.
#4 Proactively Write CPARS
COs often do not deliver CPARS ratings above Satisfactory because of the time and effort involved. For each rating factor and the overall rating, prepare both your desired rating and the substantiating reasons with resulting benefits. According to FAR 42.15, “To justify an Exceptional rating, identify multiple significant events and state how they were of benefit to the Government.” Write the CPARS justification using specific examples, gleaned from tips #1-#3, to demonstrate benefits to the project, the agency and the mission. In addition, identify problems and how your solved them with effective corrective as well as future preventive actions.
#5 Challenge Ratings With Proof
Contractors have the opportunity to review their CPARS rating and according to FAR 42.15 have “14 calendar days from the date of notification of availability of the past performance evaluation to submit comments, rebutting statements, or additional information.” Make sure you actually take this action as many contractors miss the deadline because their own Contracts shop did not report notification.
If you rebut with comments, and the CO does not change a rating, you do have further recourse, as agencies must provide for review at a level above the CO to consider disagreements regarding the evaluation. A final step may even be a legal challenge. But whether you rebut, ask for further review, or call in the lawyers, evidence is key to a successful challenge.
The worst course of action is to wait and hope for an Exceptional rating. Even if you rebut a rating per Tip #5, you may not be successful. Take a proactive stance to past performance ratings. With so many ratings trending towards Satisfactory, achieving an Exceptional is a big step forward in discriminating your value proposition. Work on a weekly basis to incrementally gather, analyze and report performance that exceeds expectations and benefits the Government.
By Lisa Pafe, Vice President at Lohfeld Consulting Group, CPP APMP Fellow and PMI PMP
Lohfeld Consulting Group has proven results specializing in helping companies create winning captures and proposals.
As the premier capture and proposal services consulting firm focused exclusively on government markets, we provide expert assistance to government contractors in Go-to-Market Strategy, Capture Planning and Strategy, Proposal Management and Writing, Capture and Proposal Process and Infrastructure, and Training. In the last 3 years, we’ve supported over 550 proposals winning more than $135B for our clients—including the Top 10 government contractors. Lohfeld Consulting Group is your “go-to” capture and proposal source! Start winning by contacting us at www.lohfeldconsulting.com and join us on LinkedIn, Facebook, and Twitter.