Report | May 9, 2017

Summary of Audits on Assessing Contractor Performance: Additional Guidance and System Enhancements Needed DODIG-2017-081


In this report, we summarize systemic problems with the preparation of contractor performance assessment reports (PARs) and identified potential improvements for the Contractor Performance Assessment Reporting System (CPARS) and its guidance, based on a series of audits we conducted on DoD officials’ evaluation of contractor performance.


The purpose of a PAR is to provide source selection officials with information on contractor past performance. Government officials prepare PARs in CPARS.

In FY 2008, the DoD Office of Inspector General (OIG) reported on DoD officials not complying with past performance reporting requirements.  In 2010, the Senate Armed Services Committee requested that the DoD OIG perform a followup audit. To address the Committee’s request, we performed a series of audits on DoD officials’ compliance with past performance requirements. This is the capstone report for our audits.

In total, we audited 18 offices across the DoD—5 in the Navy, 4 in the Air Force, 5 in the Army, and 4 Defense organizations. At the 18 offices, we nonstatistically selected and reviewed 1,264 contracts, valued at $168.2 billion, and 238 PARs prepared for those contracts, valued at $18.0 billion.


Navy, Air Force, Army, and Defense organization officials generally registered, or had a valid reason for not registering, contracts and generally prepared PARs for contracts that required an evaluation. However, DoD officials did not consistently comply with requirements for evaluating contractor performance when preparing PARs from May 2013 through May 2016.  Of the 238 PARs we reviewed, DoD officials prepared 83 PARs an average of 73 days late. In addition, DoD officials did not prepare 200 of the 238 PARs in accordance with the Federal Acquisition Regulation and the Guidance for the Contractor Performance Assessment Reporting System (CPARS Guide). Specifically, DoD officials did not:

  • prepare written narratives sufficient to justify the ratings given,
  • rate required evaluation factors, and
  • prepare sufficient contract effort descriptions.

These conditions occurred because:

  • assessors were not adequately trained and organizations lacked effective procedures for timeliness and reviews of the PARs; and
  • there was a lack of internal controls within CPARS—no system requirement to write a narrative and insufficient explanations for the different ratings—and the CPARS Guide did not contain sufficient information related to the utilization of small business.1

As a result, Federal source selection officials did not have access to timely, accurate, and complete past performance assessment information needed to make informed decisions related to contract awards.  In addition, unreliable data in CPARS may lead to awarding a contract to a poorly performing contractor.  


We recommend that the Under Secretary of Defense for Acquisition, Technology, and Logistics:

  • issue guidance to emphasize the importance of PARs—specifically, the quality of written narratives;
  • issue guidance to remind DoD organizations that they are required to develop procedures to implement CPARS;
  • propose system enhancements to CPARS  to:
    • require a written narrative for each evaluated factor and
    • improve the information in CPARS on the rating definitions and the requirements for the written narrative; and
  • propose an update to the CPARS Guide and the system to improve the clarity of the utilization of small business sections.

Management Actions

During the audit, we informed officials from the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]) that DoD officials were not consistently complying with requirements for assessing contractor performance.  We identified guidance that the USD(AT&L) could issue to improve compliance. We also identified system enhancements to CPARS and its guidance to improve compliance.

The USD(AT&L) initiated steps to issue guidance.  A senior procurement analyst in the Office of the USD(AT&L) stated that he plans to draft a memorandum that the Director, Defense Procurement and Acquisition Policy, USD(AT&L), will issue to implement the recommendations. He anticipates issuing the memorandum within 60 days after we publish this report.   The management actions, once completed, should address all specifics of the recommendations; therefore, these recommendations are resolved but will remain open. We will close these recommendations once we verify that the Director, Defense Procurement and Acquisition Policy, issued the memorandum.

In addition, the USD(AT&L), in coordination with the Government-wide Past Performance Systems program manager proposed the recommended system enhancements. The proposed enhancements were approved on April 27, 2017.

The management actions addressed all specifics of the recommendations; therefore, the recommendations are closed.

USD(AT&L) officials, CPARS Program Office officials, and the Government-wide Past Performance Systems program manager, reviewed a discussion draft of this report, reviewed updated report language throughout the report process, provided unofficial comments, and reviewed the recommendations. The officials agreed to implement the recommendations.  The officials agreed to issue a memorandum and provided the audit team with a timeframe for issuance. The officials proposed system enhancements and the system enhancements were approved. As a result, we do not require a written response and we are publishing this report in final form.

1  The CPARS system includes a “Small Business Utilization” section where the assessor identifies whether a subcontracting plan is required and a “Utilization of Small Business” evaluation factor where the assessor rates small business use in the contract.

This report is a result of Project No. D2017-D000CF-0044.000.