Government Contracts Monitor

New “Performance and Integrity” Database to Impose Additional Reporting Requirements on Government Contractors

September 11, 2009

By: Eric Whytsell

A proposed regulation would amend the Federal Acquisition Regulation (FAR) to require government contract offerors with over $10 million in federal grants and contracts to provide information relating to criminal convictions, civil judgments and administrative proceedings directly into a new information system maintained by the government.

Under §872 of the 2009 Defense Authorization Act, the General Services Administration (GSA) must establish and maintain the new system, to be known as the Federal Awardee Performance and Integrity Information System ( “FAPIIS”), which will become a centralized source for contractor past performance and integrity information. The new system will contain up-to-date information on:

• Certain criminal, civil and administrative proceedings in connection with the award or performance of a government contract;
• Terminations for default or cause;
• Determinations of non-responsibility because the contractor lacks a satisfactory performance record or a satisfactory record of integrity and business ethics; and
• Suspensions and debarments, to include information regarding an “administrative agreement” reached to resolve a suspension. 

Under the new regulation, contractors with greater than $10 million in federal grants and contracts will be required to certify that their FAPIIS profile is accurate and complete when bidding on any contract over $500,000, and awardees will be required to update such information semi-annually. Contractor profiles will include information related to whether the offeror or its principals, in relation to a government contract, has within the last five years (a) been convicted in a criminal proceeding; (b) paid $5,000 or more as the result of a civil proceeding; or (c) paid a $5,000 or more penalty or paid restitution, reimbursement or damages in excess of $100,000 as a result of an administrative hearing.

All FAPIIS data will be accessible for a period of five years – meaning that suspensions or debarments that have since expired will remain visible to contracting officers. Only federal government employees will be permitted to access FAPIIS, though contractors may view their own profiles and post comments regarding the content.

The new system will draw upon existing systems such as the Excluded Parties List System (EPLS), the Past Performance Information Retrieval System (PPIRS), and the Contractor Performance Assessment Reporting System (CPARS). These systems have often been criticized for lacking complete and up-to-date information and contracting officers frequently neglected to use the past performance systems. 

Under the proposed new FAR 9.104-6, prior to awarding any contract over the simplified acquisition threshold (currently $3,000), contracting officers must review FAPIIS and consider past performance information when making any past performance evaluation or responsibility determination. 

Although contracting officers will be warned that past performance information does not necessarily reflect upon a contractor’s present responsibility, the system will make negative performance histories more accessible to contracting officers. This makes it more important than ever to implement compliance procedures designed to prevent the occurrence of criminal conduct, terminations for default, and administrative penalties.

In addition, like any new reporting requirement, the new FAPIIS reporting obligation necessitates new compliance measures to ensure that information submitted to FAPIIS is complete and accurate. 

The FAR Councils are accepting comments on the proposed rule until October 5, 2009.  

 

Written by Sam Jack, Eric Whytsell, and Hopewell Darneille.