GAO: Subcontract With Incumbent Didn’t Mandate High Past Performance Score

An offeror was not entitled to a high past performance score merely because it proposed a subcontracting relationship with the incumbent prime contractor.

In a recent bid protest decision, the GAO held that an agency had properly assigned the offeror a mere “Satisfactory” past performance score, despite a subcontracting relationship with the incumbent, because the prospective prime contractor had not sufficiently demonstrated its own relevant past performance.

The GAO’s decision in TechTrend, Inc., B-412009, B-412009.2 involved a Forest Service solicitation for human resources information technology and contract advisory and assistance services.  The solicitation was issued as an 8(a) set-aside.

The solicitation stated that award would be made on a best value basis, considering three factors: technical capability, past performance, and price.  With respect to the past performance factor, the solicitation provided that the Forest Service would assess the past performance of the prime offeror and its proposed subcontractors.  However, the solicitation stated that the experience of the prime offeror was more important than the experience of subcontractors.

TechTrend, Inc. submitted a proposal.  In the past performance portion of its proposal, TechTrend relied primarily on projects performed by its proposed subcontractors, including one of the incumbent prime contractors.

After evaluating initial proposals, the Forest Service rated TechTrend as “Very Good” on the technical capability factor and “Satisfactory” on the past performance factor.  The Forest Service gave TechTrend strengths for some of the past performance of its subcontractors, including the incumbent.  However, the Forest Service concluded that TechTrend lacked sufficient experience of its own.

Because the Forest Service had received 19 initial proposals, it elected to establish a competitive range.  In August 2015, the Forest Service notified TechTrend that its proposal had been excluded from the competitive range.  The exclusion noticed indicated that TechTrend’s exclusion was based on its past performance score.

TechTrend filed a GAO bid protest challenging its exclusion from the competitive range.  In its protest, TechTrend challenged the Forest Service’s assignment of a mere “Satisfactory” past performance score.  TechTrend argued that its proposed team demonstrated highly relevant experience for which the team had received excellent performance ratings.  TechTrend contended that it was improper for the agency to downgrade TechTrend’s past performance score simply because much of that experience came from TechTrend’s proposed subcontractors.

The GAO noted that the Forest Service had assigned TechTrend’s proposal strengths for certain experience of its subcontractors, including the experience of the incumbent.  However, “[t]he agency’s fundamental concern regarding TechTrend’s past performance stemmed from the fact that TechTrend, as the prime contractor, failed to sufficiently demonstrate its own relevant performance history . . .”

The GAO wrote that the consideration of the prime contractor’s past performance “was expressly contemplated by the solicitation where it advised offerors that establishing the capability and quality of the prime contractor’s past performance record was more important than establishing the record of proposed subcontractors.”  The GAO continued:

Such consideration is consistent with the general notion that an agency need not directly “credit” or otherwise substitute a subcontractor’s experience or past performance for a prime contractor that lacks sufficient past performance of its own.  Rather, an agency, as the Forest Service did here in determining the protester’s proposal to be satisfactory for past performance, may balance the prime contractor’s lack of stronger past performance against that of its proposed subcontractors.  An agency may reasonably determine that a prime contractor that lacks past performance of its own warrants a lower rating given that it would be the entity responsible for performing the contract, even where its subcontractor has considerable positive past performance.

The GAO denied the protest.

Small business offerors sometimes rely, in large part, on the past performance or experience of their proposed teammates.  But as the TechTrend case demonstrates, procuring agencies have broad discretion when it comes to evaluating such experience.  Where, as here, the prospective prime contractor does not demonstrate its own relevant past performance to the agency’s satisfaction, the agency ordinarily has the right to assign a middling past performance score–even if the proposed subcontractors have a great deal of relevant past performance.

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