Past Performance: Agency Can Consider Whether Prime & Subcontractor Have Worked Together Previously

An agency’s past performance evaluation may consider whether the prime contractor and a proposed subcontractor have worked together previously–even if the solicitation is silent about such consideration.

In a recent bid protest decision, the GAO held that there was nothing improper about an agency’s determination that the awardee’s prior working history with its subcontractor decreased performance risk.

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Past Performance Isn’t Always a Required Evaluation Factor, Says GAO

For companies trying to break into the government market for the first time, past performance can seem a bit like the old chicken-and-egg conundrum. Sometimes it can appear like a company can’t win a government contract without a strong record of past performance–but can’t build a past performance record without contracts! And with the government’s continued movement away from lowest-price, technically acceptable evaluations, past performance seems increasingly important.

But that doesn’t mean the government always has to consider past performance as an evaluation factor. Instead, as a recent GAO bid protest decision confirms, procuring agencies have broad discretion to omit past performance in appropriate cases.

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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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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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SBA Requires Consideration of Some Subcontractors’ Capabilities, Experience & Past Performance

It’s commonly misunderstood that the FAR requires procuring agencies to consider the capabilities, past performance and experience of an offeror’s proposed subcontractors. Unfortunately, that’s just not true.

But now, as part of a comprehensive new final rule, the SBA will require agencies to consider the capabilities, past performance and experience of small business subcontractors in certain cases.

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Subcontractor Experience Irrelevant Where Subcontractor Won’t Perform Similar Tasks, Says GAO

Prime and subcontractor teaming is a common way for contractors to leverage the experience of the team’s anticipated subcontractors to make proposals more attractive to federal clients, particularly when past performance is a substantial evaluation consideration.

This approach, however, recently ran into a snag when the proposed subcontractor was not going to perform the discrete work areas that its past performance experience supported, which lowered the past performance score of the bid. In the resulting protest, GAO concluded the agency got the evaluation right, and was not required to credit all of the subcontractor’s experience.

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GAO Green Lights Use of IGCE in Past Performance Evaluation

Internal Government Cost Estimates (IGCEs) are frequently used to gauge the reasonableness of contractor prices during proposal evaluation. But can these internal estimates also impact other evaluation factors? GAO was recently asked to resolve this question in the context of past performance evaluations, and the answer was essentially “you sure can!”

Alright, GAO wasn’t that enthusiastic, but it did condone the use of IGCEs when evaluating past performance.

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