Over the last few years, the government has shifted away from lowest price technically acceptable valuations placing a larger importance on past performance. The past performance requirement can sometimes create obstacles for firms who lack the required substantive past performance bonafides. A recent Government Accountability Office (GAO) decision offers another avenue as the agency attributed the past performance of two joint venture (JV) partners who previously worked as a prime and subcontractor on similar contracts to their Mentor-Protégé JV.
The Solicitation
On May 26, 2022, the Defense Intelligence Agency (DIA) issued a solicitation seeking proposals to provide a broad range of construction-related services for work in Washington, D.C. The RFP was to be made on a best-value basis to the offeror considering the following four factors: 1) facility security clearance; 2) past performance; 3) technical capability; and 4) cost/price coefficients. For the past performance metric, the RFP instructed offerors to submit at least five and no more than 10 references from previous government contracts over the past three years. The solicitation stated the agency would evaluate the “recency, relevancy and quality of past performance information from all entities…based on the percentage of work that each entity will perform.”
The winning bidder, Strongside Builders LLC – a mentor-protégé JV between Greenway Enterprises, Inc. (mentor) and Ascendent Program Services, LLC (protégé) – did not have previous past performance to draw upon, but instead submitted 10 past performance references for similar work where the two companies acted through a prime-sub relationship. None of the 10 references included the percentage of work designated to Ascendant. The Solicitation closed on July 15, 2022 with five offerors submitting bids. The Source Selection Authority (SSA) reviewed the bids and determined Strongside provided the best value to the government. Meltech Corporation, an unsuccessful bidder, protested the award arguing, in part, that the “agency improperly failed to account for Ascendent’s lack of relevant past performance, and improperly relied solely on the record of the mentor partner, Greenway, contrary to the terms of the solicitation.”
GAO Analysis
GAO stated that while Small Business Administration (SBA) rules “require agencies to consider the experience and past performance of both the mentor and protégé members of a joint venture, the regulations do not mandate a specific degree of consideration for the mentor or the protégé firm.” Further, while the SBA rules require small business protégés to have some experience, it would be unreasonable to require them to have the same level of experience as the mentor.
GAO held that even without an indication on the percentage of work being performed by the protégé, the agency’s decision was reasonable because the prior solicitation language “did not prohibit the agency from attributing past performance arising from a previous teaming arrangement with the same partner as that of both joint venture partners.” Even though the prior past performance was conducted pursuant to a prime-sub relationship, GAO allowed the agency to credit that past performance to the JV.
Going Forward
This GAO decision presents something for business development managers to think about when preparing and submitting bids. When compiling past performance bonafides, the GAO has greenlighted using experience from previous teaming agreements as JV past performance. This could broaden the eligibility of JVs and lower barriers of entry for small business protégés. The GAO did provide one important caveat – the terms of the solicitation control.
The GAO took a careful approach when parsing the terms of the solicitation to determine no language prohibited the agency from attributing the experience gained under previous teaming agreements to the JV. When preparing bids, contract managers should similarly carefully review the solicitation language to ensure they comply and submit a responsive bid.
