Hearing of the Subcommittee on Government Management, Organization, and Procurement - Federal Contracting: Poor Performers Keep Winning?

Statement

Hearing of the Subcommittee on Government Management, Organization, and Procurement - Federal Contracting: Poor Performers Keep Winning?

Good afternoon. Let me first commend Chairman Towns for holding a hearing on this important acquisition issue. Maintaining a high-performing, ethical contractor base is critical to the integrity of the acquisition system and to our nation's governance.

We meet today to discuss the challenges of using "past performance" information to ensure federal contracts are awarded to the best performers. This is a complex issue which involves the careful use of business judgment so contractors can be held accountable for their performance and conduct, while at the same time ensuring we have an active competitive market available to the government.

Past performance is used in two distinct ways during the acquisition process. First is to determine a contractor's eligibility to contract with the government - either in the context of a particular acquisition under the concept of responsibility or more broadly across the government under the debarment and suspension process. This is a "pass/fail" assessment of a contractor's history of business integrity and ethics. The second use is as an evaluation factor for comparing competing firms' proposals for award selection.

I am sure there is room for improvement in the government's use of past performance information. However, the complexity of the issues raised does not lend itself to a "one size fits all" solution - we must avoid draconian "enforcement" by simply deciding to eliminate from the government market all firms which have had performance issues or which have been accused of some ill-defined "misconduct."

I'm afraid recently introduced legislation borders on that; under the guise of preventing contractors from "fleecing taxpayers," the bill is actually a black list that would defame and degrade companies merely accused of wrongdoing. Not convicted; accused. It is critical to maintain the discretion afforded to contracting officials in making informed business decisions in order to award contracts to firms submitting the most favorable offers - taking into account the factors which are particular to each acquisition. For example, if a firm has had issues concerning "questioned costs" under a cost type-contract, that issue should not necessarily weigh heavily in an evaluation for the award of a fixed-priced contract.

While I agree even a single contract award to a firm with an extensively bad performance record is one too many, we need an accurate view of the magnitude of the challenges we face. I fear this hearing may not be structured to do that. Taking a few carefully selected "horror stories" out of the thousands of annual contract actions may be great for grabbing headlines, but does not lend itself to producing an accurate picture of the issue. I hope I am being "over cautious" - I hope the testimony we hear today will help bring focus to the challenges faced by our acquisition professionals in holding contractors accountable by the appropriate use of past performance information in the evaluation of proposals and when determining the responsibility of prospective contractors.

Thank you, Mr. Chairman.

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