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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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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Evaluation Of Subcontractor Past Performance Not Required For FSS Procurements

For Federal Supply Schedule procurements, agencies are not required to evaluate past performance references of subcontractors, unless the solicitation provides otherwise.

As one offeror recently discovered in Atlantic Systems Group, Inc., B-413901 (Jan. 9, 2017), unlike negotiated procurements, where agencies “should” evaluate the past performance of subcontractors that will perform major or critical aspects of the contract, offerors bidding under FSS solicitations should not assume that a subcontractor’s past performance will be considered.

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2017 NDAA Creates Pilot Program For Subcontractors To Receive Past Performance Ratings

The 2017 National Defense Authorization Act gives certain small subcontractors a new tool to request past performance ratings from the government.

If the pilot program works as intended, it may ultimately improve those subcontractors’ competitiveness for prime contract bids, for which a documented history of past performance is often critical.

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GAO: Offeror Improperly Excluded For “Neutral” Past Performance

An agency acted improperly by excluding an offeror from the competitive range simply because the offeror received a “neutral” past performance score.

In a recent bid protest decision, the GAO wrote that the FAR precludes evaluating an offeror unfavorably because of a “neutral” or “unknown” past performance rating–and that the prohibition on unfavorable treatment prevents an agency from excluding an offeror from the competitive range on the basis of a neutral rating.

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GAO: Subcontract With Incumbent Didn’t Mandate High Past Performance Score

An offeror was not entitled to a high past performance score merely because it proposed a subcontracting relationship with the incumbent prime contractor.

In a recent bid protest decision, the GAO held that an agency had properly assigned the offeror a mere “Satisfactory” past performance score, despite a subcontracting relationship with the incumbent, because the prospective prime contractor had not sufficiently demonstrated its own relevant past performance.

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