Five Things You Should Know: Past Performance of Subcontractors, Joint Venture Partners, and Affiliates

The government’s hard shift away from lowest-price, technically acceptable evaluations has magnified the importance of past performance in many competitive acquisitions. For start-ups and other companies new to the federal marketplace, past performance requirements can present a significant barrier to success.

Oftentimes, companies with little or no past performance of their own can offer the past performance of another entity, such as a subcontractor or joint venture partner. But the rules surrounding the use of another entity’s past performance are often misunderstood–and recently, the rules have evolved quickly.

Here are five things you should know about using the past performance of a subcontractor, joint venture partner, or affiliate.

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Congress Requires Large Primes to Provide Past Performance Reviews to Small Subcontractors–And Agencies to Consider Them

Breaking into the federal government contracting marketplace can be challenging, and many small businesses choose to start as subcontractors. But when those companies later bid on prime contracts, they sometimes find that they cannot get past performance reviews for their subcontract work, or that the government won’t consider such reviews.

Now, Congress has stepped in. A provision in the 2021 National Defense Authorization Act will require large prime contractors to provide small businesses with past performance reviews in certain cases, and will require agencies to consider them.

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8(a) Participants to Receive One-Year Extension Through COVID-19 Bill

Update: The Consolidated Appropriations Act, 2021 was passed on December 27, 2020. The NDAA was passed on January 1, 2021.

Congress has included in the new COVID-19 relief bill a one-year extension of the term for participation in the 8(a) Program. Under the provision, any small business concern participating in the 8(a) program on or before September 9, 2020 may “elect to extend such participation by a period of 1 year”.  This is good news, especially for those concerns in their last year of viability in the 8(a) program who may have felt shortchanged from COVID’s effects on the economy.

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Congress Says Small Businesses Without Past Performance Can Submit Joint Venture Experience Instead

Per the 2021 NDAA that was recently approved by Congress, small business offerors without their own past performance experience can now submit experience earned as part of a joint venture–and the procuring agency must consider it. This change will significantly benefit newer companies that do not yet have the individual experience to successfully compete for government contracts (that is, assuming the President signs the NDAA). It will also add an incentive for start-up companies to take advantage of SBA’s joint venture opportunities.

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Congress Lengthens Employee-Based Size Standard Period

If you’re a regular SmallGovCon reader (and we hope you are!), you probably are familiar with the Small Business Runway Extension Act. Under the Runway Extension Act, Congress lengthened the period used to determine small business status under receipts-based size standards, from three to five years. Congress’s laudable goal was to allow businesses to “stay small” longer, but the Runway Extension Act can backfire when a business has been shrinking instead of growing.

Now, Congress has done it again. In the Conference Report to the 2021 NDAA, Congress has extended the period used to measure employee-based size standards, from 12 to 24 months–and whether this is good news may depend on if a business has been growing or shrinking.

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Congress Approves Government-wide SDVOSB Certification Requirement; Transfers CVE to SBA

The House and Senate have agreed to eliminate service-disabled veteran-owned small business self-certification and adopt a government-wide SDVOSB certification requirement, while transferring control of the certification process from the VA to the SBA.

The Conference Report on the 2021 National Defense Authorization Act would require government-wide SDVOSB certification (eventually) and transfer control of the the Center for Verification and Evaluation from the VA to the SBA. Assuming the President signs the bill into law (which, unlike the typical NDAA, remains to seen), SDVOSB self-certification–which is still the law for non-VA contracts–is on its way out.

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