In evaluating a WOSB joint venture’s past performance, the procuring agency considered each joint venture member’s contemplated percentage of effort for the solicitation’s scope of work, and assigned the joint venture past performance ratings based on which member was responsible for particular past performance.

The GAO held that the agency had the discretion to evaluate joint venture past performance in this manner–although it is unclear whether a relatively new SBA regulation (which apparently didn’t apply to the solicitation) would have affected the outcome.

The GAO’s decision in TA Services of South Carolina, LLC, B-412036.4 (Jan. 31, 2017) involved an Air Force solicitation seeking services supporting Air Force Information Network operations.  The solicitation was issued on March 13, 2015 and was set aside for WOSBs.

The solicitation called for the award of a fixed-price contract (with a few cost reimbursable line items) for a 12-month base period and four potential option years.  The Air Force was to evaluate proposals on a best value basis, considering technical, past performance, and price factors.

The successful offeror was to perform work in five Mission Areas.  Under a “staffing/management” technical subfactor, offerors apparently were required to provide information regarding the anticipated breakdown of work between teaming partners (or joint venture partners) for each Mission Area.

With respect to past performance, the solicitation stated that offerors should submit past performance information on up to eight recent, relevant contracts performed by the offeror, its subcontractors, teaming partners, and/or joint venture partners.  The solicitation stated that “past performance of either party in a joint venture counts for the past performance of the entity.”

TA Services of South Carolina, LLC was an 8(a) mentor-protege joint venture between Technica, LLC, a woman-owned small business, and AECOM, its large mentor.  TAS submitted a proposal in response to the Air Force solicitation.  TAS provided three past performance contracts performed by AECOM, but none by Technica.

TAS proposed that Technica would provide the majority of the staffing (between 55% and 70%) on four of the five Mission Areas.  AECOM would provide the majority of the staffing on the fifth Mission Area.

In the course of its evaluation, the Air Force independently identified a fourth AECOM contract, but no Technica contracts.  The Air Force concluded that the four AECOM contracts “provided meaningful past performance to enable a confidence level to be determined for the Joint Venture.”  However, “while Technica proposed the majority of staffing in all areas except [one], they demonstrated no past performance.”  The Air Force assigned TAS a “Satisfactory Confidence” past performance rating.  The Air Force awarded the contract to a competitor, which proposed a higher price but received a “Substantial Confidence” past performance score.

TAS filed a GAO bid protest challenging the evaluation.  TAS argued, in part, that the Air Force’s past performance evaluation was inconsistent with the terms of the solicitation.  TAS contended that the solicitation required AECOM’s experience to be treated as the joint venture’s experience, and did not allow the Air Force to assign a lower confidence rating merely because Technica, the lead joint venture member, had not demonstrated relevant experience.

The GAO wrote that, “[a]s a general matter, the evaluation of an offeror’s past performance, including the agency’s determination of the relevance and scope of an offeror’s performance history to be considered, is a matter within the discretion of the contracting agency.”  In this case, “the RFP’s reference to the past performance of a JV partner counting for the mast performance of the JV does not mean the agency could not consider which JV partner was responsible for past performance.”  The GAO continued:

In the case of the protester, despite the fact that one JV partner had relevant past performance of exceptional quality in all mission areas, it remains the case that the other JV partner, which was proposed to perform the majority of staffing in four of the five mission areas, had no relevant past performance.  Given the latter circumstance, we fail to see that satisfactory confidence was an unreasonable performance confidence rating for the JV.

The GAO denied the protest.

The evaluation of a joint venture’s past performance is something I’m asked about frequently–and an area where the FAR provides little guidance.  However, is worth noting that last summer, the SBA overhauled its joint venture regulations, including those applicable to the WOSB program.  The WOSB regulations now provide, at 13 C.F.R. 127.506(f):

When evaluating the past performance and experience of an entity submitting an offer for a WOSB program contract as a joint venture established pursuant to this section, a procuring activity must consider work done individually by each partner to the joint venture, as well as any work done by the joint venture itself previously.

Nearly-identical language was added to the SBA’s regulations governing joint ventures for small business, 8(a), SDVOSB and HUBZone contracts.

The new regulation took effect more than a year after the solicitation was issued in March 2015, and wasn’t discussed in GAO’s decision.  But had it been effective, would it have changed the outcome?  That’s not entirely clear (and won’t be until a case comes along interpreting the new rule), but my best guess is “no.”

The regulation, by its plain language, specifies that the procuring agency must consider the past performance of individual joint venture members.  The SBA’s Federal Register commentary indicates that the reason SBA adopted this regulation was to prevent agencies from outright ignoring the past performance of joint venture members, and assigning undeserved “neutral” ratings to JVs comprised of experienced members.

In TA Services, of course, the agency did consider AECOM’s past performance, and didn’t assign TAS a “neutral” rating.  The new regulation doesn’t directly require any more than that, although I imagine there will be bid protests in the future about whether the underlying policy prohibits the sort of weighing that occurred here (i.e., is it fair to “penalize” a mentor-protege JV simply because the protege has little relevant experience?)

We’ll have to wait to see how the GAO and Court of Federal Claims resolve these issues in the future.  For now, TA Services of South Carolina seems clear: at least prior to the adoption of the new SBA regulations, and absent a solicitation provision to the contrary, there is nothing wrong with the agency considering each JV partner’s level of effort as part of the past performance evaluation.