GAO: 8(a) Company Not Entitled To High Past Performance Score Based On Sub’s Experience

A procuring agency appropriately refused to give an 8(a) participant the highest-possible past performance score, despite the 8(a) company’s plan to subcontract to the successful incumbent contractor.

In a recent GAO bid protest decision, the GAO held that in evaluating past performance, the agency properly focused on the experience of the 8(a) prime, which was required to perform at least 51% of the contract work and manage the contract.

The GAO’s bid protest decision in Miracle Systems, LLC, B-407324.7, B-407324.8, B-407324.10 (Mar. 5, 2013) involved a Department of Transportation solicitation for information technology support services.  The solicitation was set-aside for 8(a) participants and included a provision requiring the 8(a) prime contractor to perform “at least 51% of the work.”   (The provision appears to vary slightly from the standard Limitation on Subcontracting restrictions under FAR 52.219-14 and the NDAA, but the distinction is irrelevant for purposes of this post).

In its evaluation of competitive proposals, the DOT assigned a “medium” past performance score to the proposal of Miracle Systems, LLC.  The DOT noted that Miracle proposed to subcontract to the incumbent prime contractor, which had received high ratings for its performance.  However, the DOT determined that Miracle itself did not possess significant relevant experience.  The DOT awarded the contract to a competitor.

Miracle filed a GAO bid protest, alleging in part that the DOT had erred by failing to award it a high past performance score.  Miracle asserted that it was entitled to the highest possible past performance score based on the strength of its subcontractor’s experience on the incumbent contract.

The GAO disagreed.  It noted that “while the record reflected relevant and highly-rated past performance” by Miracle’s subcontractor, Miracle itself “proffered past performance that was considerably less in value.”  Because “[t]he prime contractor itself is responsible for performing at least 51 percent of the contract, and will have ultimate responsibility for the overall performance of the contract,” the GAO saw “no basis to question” the DOT’s assignment of a medium rating.  The GAO denied Miracle’s protest.

When it comes to evaluating past performance, procuring agencies have broad discretion.  Often, agencies will treat a subcontractor’s experience no differently than the experience of the prime.  However, the Miracle Systems case shows that when it comes to set-aside contracts, there is no guarantee that this will be the case.  As happened in Miracle Systems, the agency may choose to weigh the experience of the small prime most heavily, since the prime will be responsible for managing the contract and performing a certain percentage of the overall work.

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