A tool for transparency

Federal transparency initiatives have grown rapidly to provide government officials, businesses and the publics with greater access and insight into transactions, including contracts. A key development for the contracting community is the Federal Awardee Performance and Integrity Information System (FAPIIS), designed to “significantly enhance the government’s ability to evaluate the business ethics and quality of prospective contractors competing for federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources.”¹

FAPIIS provides unprecedented insight into a prospective contractor’s record of business conduct and performance on government contract and grant awards. Before FAPIIS, reported actions were filed in individual contract records, with no sharing among agencies or even within the agency taking the action. Now every contracting officer can access this information in order to learn of actions and decisions made by other agencies and to make more informed judgments regarding the prospective contractor’s responsibility. Both government users and prospective contractors need to understand the data FAPIIS contains, how government officials will use the data, contractor rights and responsibilities, and future plans to expand FAPIIS and increase access, including to state and local governments.

FAPIIS contains information from contracting officers, grants officials, suspension and debarment officials, related government systems, contractors and grantees. All except the nonprocurement items are operational. FAPIIS retains information for five years and archives it for one more. The information in FAPIIS includes (or will include):

• Determinations of nonresponsibility
• Administrative agreements
• Terminations for default or cause
• Defective pricing
• Termination for material failure to comply (nonprocurement)
• Recipient not-qualified determination (nonprocurement)
• Criminal, civil and administrative proceedings (Offerors self-report adverse judgments connected with the award or performance of a federal contract or grant, or are subject of a proceeding at the federal or state level.)
• Flag and link to Past Performance Information Retrieval System (PPIRS) records
• Flag and link to Excluded Parties List System (EPLS) records
• Contractor comments. (FAPIIS provides text fields for a contractor to post comments on any information entered by the government.)

A determination of responsibility requires sound judgment to weigh the relevance of FAPIIS information and how it relates to the present acquisition. Factors to consider when reviewing FAPIIS data include, but are not limited to:

• Level of detail
• Severity
• Frequency
• Currency
• Mitigating circumstances
• Extent of difference from present acquisition

If the contracting officer proceeds with a determination of nonresponsibility, and if the information forming the basis for that decision appears appropriate, he or she must notify the suspending or debarring official. This helps to avoid de facto debarment. If one contracting officer after another determines an offeror nonresponsible based on its FAPIIS record, they effectively exclude the offeror from business with the government. Suspension and debarment procedures provide due process, giving the offeror an opportunity to present its position in a quasi-judicial proceeding.

In addition to determinations of responsibility, FAPIIS information is used to assess past performance. FAPIIS information on terminations for default or cause and defective pricing supplement information in PPIRS.

The government is considering additional sources of information, including state-level information related to the award or performance of a contract or grant with a state government. Collecting this information poses challenges, such as establishing a consistent reporting format across state governments. The government will also explore the feasibility of including local government information. Further, the government is “considering lowering the threshold for covered actions that trigger FAPIIS reporting from $500,000 to the simplified acquisition threshold and (2) expanding the current scope of reporting to include other violations of laws, as opposed to violations only in the context of federal contracts and grants.”²

The most critical development is the passage of the Supplemental Appropriations Act, 2010 (Pub. Law 111-212). Section 3010 makes FAPIIS information publicly available, excluding past performance reviews (i.e., detailed PPIRS evaluation reports). Several issues surround its implementation, including protection of proprietary offeror and contractor information. Public interest groups and other parties will be able to perform their own analyses and assessments. Questions that arise include:

• Will public interest groups and others who access the information understand the context and intent of the information?
• Will contractors take positive actions to avoid the situations that get entered, improving overall performance and benefits to the government and taxpayers?
• Will contractors be more likely to escalate formal challenges to contracting officers’ decisions because they will be more public, creating a disincentive to reaching accommodation less formal accommodation?

Conclusion

The new sources of information in FAPIIS will help the government make smarter decisions regarding contract awards and improve best value for taxpayers. The benefits will increase if state and local governments also gain access. However, as contracting officers’ decisions become more visible, they will be subject to greater scrutiny and “second-guessing.” Contracting officers must ensure their decisions are sound, fair and well-documented.

Endnotes

1. FAR Case 2008-027, Federal Awardee Performance and Integrity Information System, Federal Register, Volume 75, No. 55, p. 14059 (75 FR 14059), March 23, 2010.

2. FAR Case 2008-027, Federal Awardee Performance and Integrity Information System, Federal Register, Volume 75, No. 55, p. 14060 (75 FR 14060), March 23, 2010.

About the author

Gloria Sochon, CPCM and National Contract Management Association (NCMA) Fellow, is senior procurement analyst with the Department of Homeland Security. The views expressed in this article are those of the author and do not reflect the views or position of the Department of Homeland Security.