I see that the Defense Department's IG has issued a report discussing shortcomings in how DOD records past performance report cards. Many of the reports are filled out late (the later the report, the poorer people's memories and the sooner the information on them becomes outdated). In 82 percent of the cases, the ratings did not include sufficient narrative to justify why the contractor had been given the rating they had.

Considering past performance when making awards is one of the most powerful tools the government has available to encourage good contractor performance. It is central to how the free market system works on behalf of customers: If I get a bad haircut, for example, I don't go back to the same barber the next time. Government folks should not see past performance evaluations as a drill or an unpleasant obligation, but as a tool for doing their jobs and supporting their agency's missions.

So the inspectot general is right to be concerned about problems here.

The government folks have an excuse, sort of. The formal past performance report cards suffer from a bad case of undifferentiation -- government folks hesitate to boast too loudly about truly outstanding performance and, even more so, honestly to criticize performance that is mediocre or worse. Part of the reason for that is the unfortunate FAR provision (which I confess I signed on to as the Offce of Federal Procurement Policy administrator, against my better judgment at the time) that allows contractors who don't like a rating to get the rating reviewed a level up the chain (rather than the more sensible approach of letting the rating stand, but allowing the contractor to put their version of events in the file). This discourages honesty by sending the message that if you say anything negative, you subject yourself to endless meetings and justifications with your boss.

I also think that for major contracts, contracting policy officers should develop a capability to do oral interviews of contracting and programming officials, guiding them through the past performance report cards and asking probing questions to draw out more and more differentiated information -- rather than just leaving filling out the forms to the offices themselves. Trained interviewers can do a better job eliciting good information.

Readers of this blog know I'm not a big IG fan. But when they're right, they're right.

I also seem to be in good company. The FCW online story about the report noted that Shay Assad, the Defense Department's senior procurement policy official, and Charlie Williams, senior procurement person in the Air Force, agreed with the IG's recommendation. Maybe they can work on developing an interviewing capability for doing report cards on major contracts.

I would like to hear reader recommendations for how government can strengthen the past performance system. Post a comment on this blog (registration required) or send an e-mail to letters@fcw.com (subject: IG) and the FCW staff will post it for you.