A bidder on a government contract opportunity may rely on the past performance of an affiliated company–but only when the bidder’s proposal demonstrates that the resources of the affiliate will be provided or relied upon for contract performance.
This rule was recently at issue in a GAO bid protest decision, in which the GAO held that the agency improperly credited a joint venture with the past performance of affiliated companies, even though the joint venture’s proposal did not indicate that those companies would play a role in contract performance.
The GAO’s decision in IAP World Services, Inc; EMCOR Government Services, Inc., B-407917.2 et al (July 10, 2013) involved a Navy procurement for base operating support services. The solicitation stated that award would be made on a “best value” basis. The five non-price factors to be considered were corporate experience, technical/management approach, past performance, small business utilization, and safety.
For the past performance and corporate experience factors, offerors were to provide information for no more than four contracts of similar size, scope and complexity performed within the lat five years. Under the past performance factor, offerors were also required to submit completed past performance questionnaires for the same contracts.
J&A World Services LLC submitted a proposal. J&A’s proposal explained that it was a joint venture comprised of J&J Worldwide Services, the managing partner, and Alutiiq Global Solutions, LLC. Two of the projects J&A identified under the past performance and corporate experience factors were performed by Alutiiq-Mele and Alutiiq Management Services, LLC, both of which were separate corporate subsidiaries of Alutiiq Global’s parent company, Alutiiq, LLC.
After evaluating competitive proposals, the Navy assigned J&A an “Acceptable” score for corporate experience and a “Substantial Confidence” score for past performance. J&A also proposed the lowest evaluated price. The Navy made award to J&A.
Two competitors filed GAO bid protests challenging the award. Both protesters alleged, in part, that the Navy had unreasonably credited J&A with the corporate experience and past performance of Alutiiq-Mele and Alutiiq Management Services. The protesters alleged that J&A’s proposal did not “evidence any commitment on the part of Alutiiq-Mele and Alutiiq Management Services to perform any part of the contract or to provide personnel or resources.”
The GAO wrote that “[a]n agency may attribute the experience or past performance of a parent or affiliated company to an offeror where the firm’s proposal demonstrates that the resources of the parent or affiliate will affect the performance of the offeror.” In this analysis, “[t]he relevant consideration is whether the resources of the parent or affiliated company–its workforce, management, facilities, or other resources–will be provided or relied upon for contract performance such that the parent or affiliate will have meaningful involvement in contract performance.” The GAO continued, “[i]t is inappropriate to consider an affiliate’s record where that record does not bear on the likelihood of successful performance by the offeror.”
Reviewing J&A’s proposal, the GAO wrote, “[n]either of the two corporate subsidiaries were identified anywhere in J&A’s technical proposal, except to the extent that J&A identified contracts awarded to the subsidiaries for which J&A requested corporate experience and past performance credit.” Although the proposal stated that resources could “possibly” be drawn from other companies, “there is nothing in the proposal–or anywhere else in the contemporaneous record–that shows that either Alutiiq-Mele or Alutiiq Management Services will be meaningfully involved in performance of the contract.” The GAO sustained the protest.
The IAP World Services GAO bid protest decision demonstrates that mere corporate affiliation is insufficient to permit an offeror to rely on the affiliate for past performance or experience. In order for such reliance to be permitted, the proposal must demonstrate that the affiliated company will have meaningful involvement in contract performance. Proposal writers, take note.