GAO: Past Performance Evaluation Not Required In LPTA Set-Aside Competition

An agency was not required to evaluate past performance under an SDVOSB set-aside solicitation that contemplated making award to the lowest-price, technically-acceptable offeror.

According to a recent GAO bid protest decision, a past performance evaluation in the context of an LPTA set-aside is essentially duplicative of the agency’s evaluation of responsibility, meaning that a separate past performance evaluation isn’t necessary.

GAO’s decision in Data Monitor Systems, Inc., B-415761 (Mar. 6, 2018) involved an Air Force solicitation for base operations and support services at Grissom Air Reserve Base.  The solicitation was set-aside for SDVOSBs, and called for award to the lowest-price, technically acceptable offeror.

Under the solicitation, the Air Force would evaluate two factors: technical merit and price.  The solicitation did not include past performance as an evaluation factor.

In a contemporaneous Determination and Findings, the Air Force found that evaluating past performance would not provide any significant benefit.  In its D&F, the Air Force noted that, under an LPTA evaluation, offerors with limited or unknown past performance cannot be evaluated unfavorable, meaning that such offerors are entitled to an “acceptable” rating.  Additionally, because the acquisition was an SDVOSB set-aside, any “unacceptable” past performance score would need to be referred to the SBA under the Certificate of Competency program, increasing the potential administrative burdens of conducting the acquisition.

Data Monitor Systems, Inc. filed a pre-award bid protest challenging the terms of the solicitation.  DMS argued, in part, that failing to include past performance as an evaluation factor was unreasonable and improper.

The GAO wrote that “the FAR provides that past performance need not be evaluated if the contracting officer documents the reason past performance is not an appropriate evaluation factor for the acquisition.”  And, in the context of a LPTA set-aside competition, the GAO “has previously questioned the value of including past performance as a separate evaluation factor precisely because the past performance evaluation is ultimately reduced to a matter of the firm’s responsibility, which will be evaluated, in any case, after source selection.”  This is particularly true “given the difficulties associated with how to consider a neutral rating in the context of a pass/fail evaluation, which as noted by the agency’s D&F in this case, is the rating required for firms without any past performance record or where the record is not available.”

The GAO concluded: “[i]n sum, we see no basis to disturb the agency’s conclusion that performing a past performance evaluation in the context of a lowest-priced, technically-acceptable procurement, which is set aside for small businesses, is essentially duplicative of the agency’s responsibility determination . . ..”  The GAO denied the protest.

Past performance is, of course, an extremely common evaluation factor.  But as the Data Monitor Systems case demonstrates, procuring agencies are not required to consider past performance in every acquisition.  Where, as here, the acquisition will be set-aside for small businesses and award made on an LPTA basis, an agency may have good reason to forego an evaluation of past performance.

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