Joint Ventures and Past Performance: Agency May Consider Experience of JV Members

Joint ventures seem to be an increasingly popular vehicle for pursuing federal contracts, but the FAR and agency solicitations usually are not written with joint ventures in mind.  As a result, confusion can sometimes arise over how a joint venture’s proposal should be evaluated.

Case in point: past performance.  A joint venture is often a new legal entity, so should it receive a “neutral” past performance score?  Not necessarily.  According to a recent GAO bid protest decision, it is perfectly acceptable for a procuring agency to consider the relevant experience and past performance of the individual joint venture members.

The GAO’s decision in HydroGeoLogic, Inc., B-406635 et al. (July 25, 2012) involved a U.S. Army Corps of Engineers procurement for environmental services.  The solicitation called for a “best value” evaluation, in which several factors, including past performance, would be considered.  The Corps made five awards under the multiple-award solicitation, including an award to Plexus-PARS JV, LLC.

HydroGeoLogic, Inc., an unsuccessful competitor, filed a GAO bid protest.  HGL alleged in part that in evaluating past performance, the Corps considered past performance questionnaires submitted on behalf of each of the members of the joint venture, instead of questionnaires submitted for the joint venture as an entity.  HGL argued that this was contrary to the solicitation, which called for the offeror itself to submit the past performance questionnaires.

The GAO denied HGL’s protest.  Citing prior GAO case law, the GAO wrote, “[a]n agency may consider the relevant experience and past performance history of the individual joint venture partners of the prime contractor in evaluating the past performance of a joint venture, so long as doing so is not expressly prohibited by the RFP.”  Here, the GAO found, “the RFP did not prohibit considering the past performance of individual joint venture partners in evaluating an offeror’s past performance.”  Accordingly, the GAO held, it was perfectly acceptable for the Corps to consider the past performance questionnaires submitted on behalf of the individual members of the Plexus-PARS JV, as opposed to questionnaires submitted by the joint venture itself.

In today’s government contracting world, where teaming is important–and perhaps essential–to success for many small businesses, the GAO’s decision in the HydroGeoLogic GAO bid protest makes good sense.  After all, most joint ventures are new or relatively new entities without a long history of past performance in their own right.  Without the ability to consider the past performance of the individual joint venture members, procuring agencies would be forced to give “neutral” or low past performance scores to most joint ventures–even if the joint venture members were highly experienced.

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