FAR 8.406-7—Contractor Performance Evaluation.
Plain-English Summary
FAR 8.406-7 addresses contractor performance evaluations for orders placed under Federal Supply Schedule and similar ordering procedures. It requires ordering activities to prepare performance evaluations at least annually and again when the work under an order is completed, but only for orders that exceed the simplified acquisition threshold. The section ties those evaluations to the governmentwide contractor performance reporting requirements in FAR 42.1502(c), which means the evaluation must be done in the prescribed performance assessment system and format, not informally or ad hoc. In practice, this section ensures that significant order-level performance is documented while the work is still fresh and that the record can be used for future source selections, responsibility determinations, and contractor past performance reviews. It also clarifies that the ordering activity, not the schedule contract holder or another office, is responsible for evaluating performance on the individual order. For contractors, this means order performance can affect future federal business even when the underlying contract is already in place.
Key Rules
Annual evaluation required
Ordering activities must prepare contractor performance evaluations at least once every year for each covered order. This prevents long gaps in performance documentation on orders that continue over multiple performance periods.
Final evaluation at completion
The ordering activity must also prepare an evaluation when the work under the order is completed. This final assessment captures the full performance record for the order and closes out the evaluation cycle.
Applies above threshold
The requirement applies only to orders that exceed the simplified acquisition threshold. Smaller orders are outside this specific evaluation mandate unless another rule requires documentation.
Must follow FAR 42.1502(c)
Evaluations must be prepared in accordance with FAR 42.1502(c), which means the agency must use the applicable past performance evaluation procedures and system requirements. The rule is not satisfied by a narrative memo or internal note that is not entered and processed as required.
Ordering activity is responsible
The office that placed the order must prepare the evaluation. Responsibility does not shift to the schedule contract administration office merely because the order was placed under an existing contract vehicle.
Responsibilities
Ordering Activity
Prepare contractor performance evaluations for each covered order at least annually and again when the order is completed. Ensure the evaluation is done in accordance with FAR 42.1502(c) and entered through the required past performance system or process.
Contracting Officer / Order Placer
Oversee compliance with the evaluation requirement, ensure the correct orders are identified as above the simplified acquisition threshold, and make sure evaluations are completed on time and properly documented.
Contractor
Perform under the order with awareness that performance will be evaluated periodically and at completion. Review evaluations when provided through the applicable process and use available procedures to respond to or comment on assessments as permitted by the governing system.
Agency Past Performance / Procurement Support Personnel
Support the ordering activity in using the required evaluation system, maintaining records, and ensuring evaluations are entered, tracked, and retained in accordance with agency and FAR procedures.
Practical Implications
This section matters most on longer or higher-value orders, because performance cannot wait until the end to be documented; agencies must capture it annually and at completion.
A common pitfall is missing the annual evaluation on a multi-year order, especially when the order is still active but no one is tracking the reporting cycle.
Another frequent mistake is assuming the schedule contract office handles the evaluation; under this rule, the ordering activity owns the task.
Contractors should expect that issues identified during performance may be recorded before final closeout, so problems should be addressed early rather than deferred.
For contracting officers, the key operational risk is failing to align the evaluation timing and process with FAR 42.1502(c), which can undermine the usefulness and validity of the past performance record.
Official Regulatory Text
Ordering activities must prepare at least annually and at the time the work under the order is completed, an evaluation of contractor performance for each order that exceeds the simplified acquisition threshold in accordance with 42.1502 (c).