Court: Past Performance Evaluations of Technically Unacceptable Offerors Not Required

A procuring agency was not required to consider the past performance of an offeror judged to be technically unacceptable, according to a recent bid protest decision of the U.S. Court of Federal Claims.

In The Alamo Travel Group, LP v. The United States, No. 12-764C (2012), the Court rejected an incumbent contractor’s argument that an agency could not properly exclude the incumbent’s proposal without first considering its past performance–which, the incumbent argued, would demonstrate its ability to successfully perform the contract.

The Alamo Travel Group bid protest involved a Defense Human Resources Activity solicitation for travel management services at a number of military installations.  Alamo Travel Group, LP was the incumbent contractor providing the same services at several of the installations covered by the solicitation.

The solicitation, which was issued as a total small business set-aside, called for the evaluation of three factors: technical, past performance, and price.  Technical was the most important factor, followed by past performance.  The solicitation stated that “any proposal with a Technical factor ranked as Unacceptable is ineligible for contract award, and will not be further evaluated.”

After evaluating Alamo’s technical proposal, the agency deemed Alamo’s approach unacceptable regarding two of the six areas covered by the solicitation.  The agency subsequently informed Alamo that it had been excluded from the competitive range for both areas.

Alamo filed GAO bid protests challenging the agency’s competitive range determinations.  The GAO denied both protests.  Alamo then filed a bid protest with the Court.

Alamo’s bid protest alleged that the agency had erred in considering only the technical part of Alamo’s proposal, and not considering its past performance.  Alamo argued that Section 1091 of the Federal Acquisition Streamlining Act of 1994 requires past performance to be considered in agency evaluations.  Alamo also argued that FAR 15.304(c)(3)(i) imposes a similar requirement.  Based on these authorities, Alamo contended that past performance must be included in every technical evaluation, and suggested that had Alamo’s past performance as the incumbent been considered, Alamo would not have received an unacceptable technical score.

Judge Victor Wolski disagreed with Alamo.  Judge Wolski wrote that the solicitation clearly stated that offerors with unacceptable technical scores would not be further considered.  In addition, the solicitation “treats past performance as distinct from the technical factor.”  Accordingly, Judge Wolski held, it was evident from the solicitation that the agency did not intend to incorporate past performance into its technical evaluations.

Because Alamo’s bid protest was, in essence, a challenge to these solicitation provisions, Alamo was required to protest it prior to the close of the bidding process.  Judge Wolski held that Alamo’s protest, filed well after the final due date for proposals, was untimely.

Judge Wolski could have stopped there, and if he had, the Alamo Travel Group case would merely be one of countless bid protest decisions involving similar timeliness issues.  However, Judge Wolski went further, and addressed the underlying issue raised by Alamo’s bid protest–namely, whether every offeror is legally entitled to an evaluation of its past performance, even if its technical proposal is deemed unacceptable.

Judge Wolksi first looked at the FASA, which Alamo argued required the consideration of every offeror’s past performance.  Judge Wolski noted that in adopting the statute, Congress stated that past performance “is one of the relevant factors that a contracting official of an executive agency should consider in awarding a contract.”  But, Judge Wolski wrote, “such a finding is far from binding, and calls for no more than consideration of past performance prior to award (rather than prior to exclusion from a competitive range).”

Turning to the FAR, Judge Wolski wrote that “Alamo fares no better.”  Judge Wolski noted that the solicitation was conducted as a commercial item solicitation under FAR Part 12.  But even assuming that FAR 15.304(c)(3) applied, that FAR provision states that “past performance shall be evaluated in all source selections . . ..”

Judge Wolski held, “to say a factor must be evaluated in a source selection is not the same thing as requiring that it be evaluated for all offerors, and nothing in this provision precludes federal agencies from using an approach that weeds out offerors under other non-cost factors before past performance is considered.”  The Court denied Alamo’s bid protest.

The Alamo Travel Group is important reminder that an incumbent can be deemed technically unacceptable, regardless of its success performing the incumbent contract.  Just like any other offeror, an incumbent should put together its strongest possible technical proposal, rather than relying on its past performance to carry the day.

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