As I've relayed in the past, when the GAO looks into the effectiveness and costs of private contractors, they often find that these contractors cost more than government employees covering the same jobs. Nonetheless, we continue to use private contractors, both out of necessity (e.g. we don't maintain a government concrete pouring agency when we can just use Bechtel) and out of less reasonable ideas, including padding pockets and the irrational belief that private industry is always cheaper.
One would hope that we'd track past performance of private contractors as one way of evaluating their likelihood of bringing in projects on specification and within budget. Conveniently, half a decade ago the PPIRS (Past Performance Information Retrieval System) was instituted to let contracting officers track just that. Less conveniently, use of this system by those contracting officers has been neither complete nor thorough, both in terms of tracking past performance and using that past performance to evaluate future bids.
In a report titled Federal Contractors - Better Performance Information Needed to Support Agency Contract Award Decisions, the GAO evaluates the tendency of contracting government agencies to actually record performance data on private contractors and whether or not that information is used.
To give you an idea of the scope of the situation, take a look at the contractors employed and money spent on them in 2007:
Now, let's take a look at the percent of contracts receiving an assessment in that same year:
So what does that tell us?
Well, first of all, it tells us that even the top performer in terms of filing performance reports on contractors, DOD, averages about a 36% reporting rate. Air Force is the top reporter out of DOD, accounting for 47% of all performance assessments in 2007, and 75% of all reports to date. NASA performs somewhat worse than DOD, with the Department of Energy being even worse. The Department of Homeland Security, however, was dismal, clocking in at a mere 13%.
Naturally, DHS complained about GAO's assessment. On reviewing their complaints, however, GAO determined that their assessment was sound; DHS really is just barely turning in more than a tenth of its required reports. Thus, the evidence base for estimating the likelihood of good future performance just isn't there.
GAO also found that, reasonably enough, the technical approach (the 'how we'll do this') aspect of a contractor's proposal or bid was the most-cited "top" factor in contract decisions. That said, past performance was the top factor in 38% of contracts. All things considered, it makes a great deal of sense to consider both the stated technical approach and the contractor's performance history. This second aspect has become more common lately, as we saw when KBR lost a bid partially because it had a history of overcharging on similarly structured bids.
GAO found that contracting officers who did not use the PPIRS system as a source of evidence in making award decisions cited a lack of relevant information as their reason for not doing so. In other words, all those missed performance reports make the system less useful.
The report also points out that there's significant overlap in contractors between all these agencies (as is clear if you work with one or more of them yourself). Given that, the problems at NASA and DOE and the outright failures at DHS negatively impact even those who are relatively responsible in their filing practices, such as the Air Force.
We have the technology to allow this kind of uniform tracking of government contractors. Given the significant sums involved and the need to choose the most cost-effective providers, it's certainly worth our time as taxpayers to let the right people know that DHS and friends need to get on the ball and track contractor performance.