PRAG (Performance Risk Analysis Group)

What is PRAG (Performance Risk Analysis Group)?

The Performance Risk Analysis Group (PRAG) is a multi-disciplinary team assembled by a government agency to evaluate the risk associated with a contractor's ability to successfully perform the requirements of a specific contract. PRAGs play a critical role in informing source selection decisions and ongoing contract management.

Definition

A PRAG is essentially a risk assessment team that brings together various experts to evaluate a contractor's capabilities, past performance, financial stability, and other factors relevant to successful contract execution. Their analysis helps the Contracting Officer (CO) make well-informed decisions regarding contract award and ongoing monitoring. The process considers not just the lowest price but also the best value to the government, factoring in the likelihood of successful performance. The PRAG's findings are documented and provided to the CO to support their decision-making process, particularly in competitive procurements and situations where performance risk is a significant concern. This is especially vital in complex acquisitions or where the contractor proposes innovative or unproven approaches.

Key Points

• Purpose: To provide a comprehensive assessment of contractor performance risk.
• Composition: Multi-disciplinary team including contracting, technical, legal, and potentially financial or audit experts.
• Focus: Evaluation of past performance, technical capabilities, management approach, financial stability, and compliance history.
• Outcome: A formal risk assessment report to inform the Contracting Officer's award decision or contract management strategy.

Practical Examples

1. Source Selection for a Major IT System: During the procurement of a large-scale IT system, the PRAG evaluates the technical capabilities, past performance on similar projects, and financial stability of each bidder. Their assessment helps the CO determine which offeror presents the lowest risk of performance failure.
2. Contractor Performance Issues: A contractor begins to experience significant delays and cost overruns on a project. The PRAG is convened to assess the reasons for the poor performance, identify potential corrective actions, and advise the CO on whether to terminate the contract or implement a performance improvement plan.
3. Pre-Award Survey: Before awarding a contract to a small business for a critical service, the CO requests a PRAG review to ensure the company has the necessary infrastructure, personnel, and financial resources to meet the contract requirements. This provides reassurance and helps identify any potential support needed.