The SBA proposes to amend its regulations to implement new provisions of the National Defense Authorization Act (NDAA) for fiscal year 2021 that provides small business contractors with new tools to establish past performance when bidding on prime contracts for Government procurements. The proposed rules would add two new methods for small businesses to obtain qualifying past performance. One proposed rule would allow a small business with no relevant past performance of its own to use the past performance of a joint venture in which it took part. The second proposed rule would require prime contractors to provide, to small businesses that served as a first-tier subcontractor, a record of the business’s past performance for use by the small business in future proposals.
Federal contractors often ask: “It is better to team up for government work with a prime-sub arrangement or with a joint venture?” Well, (spoiler alert) the answer is: it depends. But I won’t leave you with just that. This three-part series will provide insight on some of the major differences between these two types of “teams” that offerors should consider when making the decision between a joint venture or prime/subcontractor team in competing for and performing federal contracts. While this series will not provide a comprehensive list of all the differences between these two types of teams, it will cover some of the big ones that seem to come up more frequently in this decision-making process. The focus of the first article in this three-part series was work share considerations. This second article will focus on evaluations of a team’s past performance.
I wrote earlier about the restriction on the number of experience examples a large business mentor can provide. Well, NITAAC has listened! OK, they probably weren’t listening directly to me, but let me have this one, alright. CIO-SP4 has been amended to allow large business mentors to contribute two examples of corporate experience per task area.
The CIO-SP4 is a big deal for many small and large federal contractors. And lately it’s been a bit of a moving target as to how NITAAC will evaluate the experience of companies working together in prime-sub, mentor-protégé, and joint-venture relationships. We wrote about some of the issues with past performance and other recent changes. One change that caught my eye puts a restriction on the number of experience examples a large business mentor can provide. But should it?
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.
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.