NASA past performance ratings higher for cost plus contracts than fixed price

The more a company has a contractually risky relationship with NASA, the more likely it is that the agency will rate that contractor well during past performance evaluations, according to new research from INPUT, a Reston, Va.-based intelligence and analysis firm.

INPUT obtained information on NASA past performance evaluations through Freedom of Information Act requests, releasing a proprietary August 16 report supplied by the firm to FierceGovernmentIT.

Two months following every anniversary of a contract worth more than $100,000, NASA must evaluate its contractors on a 5-point scale based on attributes including quality, timeliness, price or control of costs, and other considerations.

Cost plus award fee contracts--the most common type of NASA contract, accounting for nearly 67 percent of all contractor spending, according to INPUT--earn on average a rating of 4.64, the report states.

Cost plus incentive fee contracts--the second most common contract at NASA, accounting for about 9 percent of contractual spending--earn on average a rating of 4.59, INPUT states.

Firm fixed price contracts--nearly 8 percent of contractor spending--merit on average a 4.32, a rating that's almost 7 percent lower than the cost plus award fee average.

The vast majority of contractors--94 percent, in all--receive a score of 3 or above in past performance evaluations, according to INPUT. Most NASA centers tend to rate their contractors similarly, with average scores ranging from 4.55 to 3.91. That low score comes from the Glenn Research Center in Cleveland, Ohio, the top score from the Dryden Flight Research Center located inside Edward Air Force Base, northwest of Los Angeles.

The Obama administration has criticized agency use of cost reimbursement contracts--calling them, in a memo issued March 4, 2009, potentially "wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer."

The memo, signed by President Obama, directs agencies to utilize cost-reimbursement contracts only when circumstances don't allow the agency to define its requirements sufficiently to allow for a fixed-price type contract.

Despite top-down pressure on agencies not to use cost reimbursement contracts, they nonetheless remain popular in no small part because they allow agencies to skirt around funding uncertainties caused when Congress fails to approve annual spending bills by the start of the federal fiscal year. Under those conditions, it's far easier to start work with a cost reimbursement contract to which money can be added incrementally, than with a fixed price contract

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