Past performance is a key ingredient in most competitive government procurements. Even if a contractor’s overall past performance record is excellent, a single blemish can damage the contractor’s chances of award.
In a recent GAO bid protest decision, the agency relied on a single adverse past performance reference to assign the contractor a poor past performance rating–even though the contractor strongly disagreed with the adverse reference. The GAO held that there was nothing wrong with the agency’s past performance evaluation.
The GAO’s decision in Johnson Controls Government Systems, LLC, B-404654 (Mar. 17, 2011) involved a GSA procurement for medical treatment facilities maintenance services. The solicitation was issued on a “best value” evaluation basis, including four technical factors and price.
Past performance was the most important of the four technical factors. The solicitation stated that past performance would be evaluated on how well the offeror had performed similar contracts. The solicitation called for the offeror to submit three past performance references, and also allowed the agency to examine other past performance information outside the proposal.
Johnson Controls Government Systems, LLC submitted a proposal. During the evaluation process, one member of the source selection evaluation board informed the panel that JCGS had significant negative performance at Nellis Air Force Base. According to the Air Force, JCGS had failed to properly maintain three boilers at Nellis, which had failed prematurely.
The GSA asked JCGS to explain the negative past performance reference at Nellis. JCGS disagreed with the Air Force’s conclusion, and informed the GSA that the boiler failures had occurred after JCGS’s contract had expired.
The GSA was not satisfied with JCGS’s explanation. Although the three past performance references JCGS had submitted ranged from “satisfactory” to “good,” the GSA relied upon the negative information under the Nellis contract to assign JCGS a “poor” past performance rating.
JCGS filed a GAO bid protest, arguing that the GSA had improperly evaluated its past performance. JCGS contended that the GSA unreasonably gave undue weight to the Nellis contract, and that the GSA failed to review “basic documentation” about the boiler issue, such as maintenance records and an investigatory report, to determine whether JCGS had been responsible for the boiler failures.
The GAO held that the GSA had not given undue weight to the Nellis contract. It wrote that “the agency in its past performance evaluation of JCGS’s proposal recognized the protester’s satisfactory and good performance of other contracts.” Nevertheless, “the agency remained concerned that JCGS’s negative performance at the Nellis AFB medical facility presented a performance risk. Although JCGS disagrees with this judgment, it has not shown that the agency’s concern was unreasonable.”
The GAO also held that the GSA was, in effect, entitled to believe the Air Force’s version of events rather than JCGS’s. The GAO wrote, “[a]lthough JCGS continues to disagree that it was responsible for the boiler failures, we find that GSA was entitled to rely on the information it received from the Air Force.” Further, there was nothing improper about the GSA’s failure to review additional documentation, such as maintenance records, because “GSA was not required, as JCGS apparently believes, to conduct its own investigation into the boiler failures.”
The GAO denied JCGS’s bid protest.
The Johnson Controls GAO bid protest decision demonstrates the powerful impact that a single negative past performance reference can have on a future evaluation. As the case illustrates, just one negative past performance reference can sink a bid–even if the contractor does not submit the reference as part of its proposal, and even if the contractor disagrees with the adverse reference.
Finally, you may be asking yourself, “why is SmallGovCon passing off a 2011 GAO bid protest decision as new?” No, I’m not digging into the GAO archives in desperation for new material. Even though the Johnson Controls decision was apparently issued about a year and a half ago, it was only publicly released this month.