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Past Performance Revisited

by Cyrus E. Phillips, IV

Special to Where in Federal Contracting?

September 1, 2000

  I looked at past performance as an evaluation factor back in 1996, after Congress had passed the Federal Acquisition Streamlining Act of 1994 (FASA), a statute which included legislative findings that past contract performance was "one of the relevant factors that a contracting officer of an executive agency should consider," and that past performance could be appropriately considered "as an indicator of the likelihood that the contractor will successfully perform." Pub. L. No. 103-355, § 1091(b)(1), 108 Stat. 3272 (1994). I explained back then that past performance, traditionally an element of the responsibility determination required by 10 U.S.C. § 2305(b)(4)(C)/41 U.S.C. § 253b, had been fair game for use an evaluation factor since Delta Data Systems Corp. v. Webster, 744 F.2d 197, 201 (D.C. Cir. 1984). Now we have the FASA statutory implementation; the Office of Federal Procurement Policy’s guide, BEST PRACTICES IN PAST PERFORMANCE; a substantially rewritten Federal Acquisition Regulation (FAR) section on "Contracting by Negotiation," with coverage on ad hoc past performance evaluations; FAR coverage on systematically recording and maintaining contractor performance information; and developing case law. So it’s time for another look at this issue.

Systematic Past Performance Evaluation and Reporting Systems

We’ll begin with a look at the requirements for systematic collection and use of past performance information. Generally, the statute requires:

(1) The Administrator shall prescribe for executive agencies guidance regarding consideration of the past contract performance of offerors in awarding contracts. The guidance shall include

(A) standards for evaluating past performance with respect to cost (when appropriate), schedule, compliance with technical or functional specifications, and other relevant performance factors that facilitate consistent and fair evaluation by all executive agencies;

(B) policies for the collection and maintenance of information on past contract performance that, to the maximum extent practicable, facilitate automated collection, maintenance, and dissemination of information and provide for ease of collection, maintenance, and dissemination of information by other methods, as necessary;

(C) policies for ensuring that

(i) offerors are afforded an opportunity to submit relevant information on past contract performance, including performance under contracts entered into by the executive agency concerned, contracts entered into by other departments and agencies of the Federal Government, contracts entered into by agencies of State and local governments, and contracts entered into by commercial customers; and

(ii) such information submitted by offerors is considered; and

(D) the period for which information on past performance of offerors may be maintained and considered.

(2) In the case of an offeror with respect to which there is no information on past contract performance or with respect to which information on past contract performance is not available, the offeror may not be evaluated favorably or unfavorably on the factor of past contract performance.

41 U.S.C. § 405(j). Guidance for systematic collection and maintenance of past performance information is set out in FAR Subpart 42.15, "Contractor Performance Information."  Guidance for ad hoc past performance evaluation is set out in FAR Subpart 15.3, “Source Selection.”

Relevant Past Performance Information

Only “relevant information” is to be collected and reported (or, to be evaluated ad hoc)—this includes, inter alia, the contractor’s record of conforming to contract requirements and good workmanship standards; where applicable, the contractor’s record of forecasting and controlling costs; the contractor’s history of “reasonable and cooperative behavior and commitment to customer satisfaction;” and, generally, the contractor’s history of “business-like concern” for customer interests. FAR 42.1501.

But there are “no-no’s” among otherwise relevant past performance information.

Agencies may not consider a contractor’s resort to the contract claims process, Nova Group, Inc., B-282947, Sept. 15, 1999, at 8, and neither may agencies consider proper contractor exercise of contract adjustment provisions, OneSource Energy Services, Inc., B-283445, Nov. 19, 1999, at 9. Unless an agency can document that a contractor was “obstructive or disputatious,” or that contractor claims “were frivolous or filed in bad faith,” Nova Group, at 8-9, that a contractor pursued the contract claims process is not relevant past performance information, and any reliance on such a thing for a past performance evaluation will result in a post-award protest that is sustained on its merits. See also AmClyde Engineered Products Co., Inc., B-282­271, June 21, 1999, at 6 n.5. So also with exercises of contract adjustment provisions except where these exercises “lacked merit” or “adversely affected the performance of the contract.” One­Source Energy Services.

Detailed Requirements for Systematic Past Performance Evaluations

Agencies must periodically collect and maintain past performance information for all supply and service contracts in excess of $100,000. FAR 42.1502­(a). Agencies are required to prepare evaluations of contract performance “at the time the work under the contract is completed.” FAR 42.1502­(a). To provide current past performance information for source selections, interim evaluations of contract performance should be prepared for multi-year contracts. Id.

Evaluations of completed contract performance, and any interim evaluations, must be shared with other departments or agencies conducting source selections. FAR 42.1503(c); Advanced Data Con­cepts, Inc. v. United States, 43 Fed. Cl. 410, 421 (1999).

Once an evaluation of contract performance has been prepared, a preliminary copy must be offered to the contractor “as soon as practicable,” and the contractor must have at least 30 days to submit comments, rebuttals, or additional information. Disagreements between the parties about the final contract performance evaluation are to be reviewed at a level above the contracting officer. FAR 42.1503(a); D.F. Zee’s Fire Fighter Catering, B-280­767.4, Sept. 10, 1999, at 7.

Although the FAR provides that “[t]he ultimate conclusion on the performance evaluation is a decision of the contracting agency,” it is doubtful that this regulation entirely insulates these matters from review. Rig Masters, Inc. v. United States, 42 Fed. Cl. 369, 372-73 (1999) following Burnside-Ott Aviation Training Center v. Dalton, 107 F.3d 854, 858-59 (Fed. Cir. 1997) (holding that a contract provision, this one also required by regulation, could not insulate a dispute concerning award fee from board of contract appeals or court review); but see RCS Enterprises, Inc. v. United States, 46 Fed. Cl. 509, 2000 U.S. Claims LEXIS 72, slip op. at 25-26 (a dispute whether or not to make a contract change is properly exempt from review).

Systematic evaluations of past performance under completed contracts cannot be used as source selection information beyond 3 years after the contract was completed. FAR 42.1503(e). If, for instance, an agency has reports of poor performance that was delivered in calendar year 1996 under a support services contract with a five-year term that is finally completed in calendar year 2000, then this poor performance may be considered for source selection purposes at any time through calendar year 2003. D.F. Zee’s, at 8.

Ad Hoc Past Performance Evaluations

Past performance must be an evaluation factor in any solicitation for competitive proposals:

In prescribing the evaluation factors to be included in each solicitation for competitive proposals, the head of an agency—

(i)  shall clearly establish the relative importance assigned to the evaluation factors and subfactors, including the quality of the product or service to be provided (including technical capability, management capability, prior experience, and past performance of the offeror). . . .

10 U.S.C. § 2305(a)(3); 41 U.S.C. § 253a(c); FAR 15.304(c)(2).

As we have already learned, offerors shall always be given “an opportunity to submit relevant information on past contract performance,” 41 U.S.C. § 405(j)(1)(C)(i), and offerors with no past performance information, or with respect to which past performance information is not available, “may not be evaluated favorably or unfavorably on the factor of past contract performance,” 41 U.S.C. § 405(j)(2).

FAR 15.305(a)(2) provides further, detailed requirements for ad hoc past performance evaluations:

Past performance evaluation. (i) Past performance information is one indicator of an offeror’s ability to perform the contract successfully. The currency and relevance of the information, source of the information, context of the data, and general trends in contractor’s performance shall be considered. This comparative assessment of past performance information is separate from the responsibility determination required under Sub­part 9.1.

(ii) The solicitation shall describe the approach for evaluating past performance, including evaluating offerors with no relevant performance history, and shall provide offerors an opportunity to identify past or current contracts (including Federal, State, and local government and private) for efforts similar to the Government requirement. The solicitation shall also authorize offerors to provide information on problems encountered on the identified contracts and the offeror’s corrective actions. The Government shall consider this information, as well as information obtained from any other sources, when evaluating the offeror’s past performance. The source selection authority shall determine the relevance of similar past performance information.

(iii) The evaluation should take into account past performance information regarding predecessor companies, key personnel who have relevant experience, or subcontractors that will perform major or critical aspects of the requirement when such information is relevant to the instant acquisition.

(iv) In the case of an offeror without a record of relevant past performance or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance.

(v) The evaluation should include the past performance of offerors in complying with subcontracting plan goals for small disadvantaged business (SDB) concerns (see Sub­part 19.7), monetary targets for SDB participation (see 19.1202), and notifications submitted under 19.1202-4(b).


FAR 15.306(a)(2) explicitly provides an opportunity to comment, in awards without discussions, on negative ex parte past performance information:

If award will be made without conducting discussions, offerors may be given the opportunity to clarify certain aspects of proposals (e.g., the relevance of an offeror's past performance information and adverse past performance information to which the offeror has not previously had an opportunity to respond) or to resolve minor or clerical errors.


Negative Ex Parte or Incomplete Ad Hoc Past Performance Information

Delta Data holds that agencies must give offerors an opportunity to comment when negative ex parte information is received, i.e., from a reference identified for proposal evaluation purposes, 744 F.2d at 203 (agency failure to offer an opportunity to comment on negative ex parte information would constitute an abuse of discretion), and Delta Data is still good law, as it was followed in El­con Enterprises, Inc. v. Washington Metropolitan Area Transit Authority, 977 F.2d 1472, 1481-82 (D.C. Cir. 1992).

But the General Accounting Office (GAO) does not follow Delta Data, a point that it first made clear in Saturn Construction, Inc., B-236209, Nov. 16, 1989, at 4-5, there holding that, in GAO’s view, an evaluation of past performance essentially involves historical information not subject to change, and thus neither discussions nor an opportunity to comment on negative ex parte references is required. More recently, GAO has held that “[r]eports from references are routinely relied on in commercial transactions . . . [and we] fail to see why the government cannot follow ordinary commercial and consumer practices in selecting the most capable contractor.” SDA, Inc., B-256075, May 2, 1994, at 7 n.9.

Notwithstanding this GAO opposition, early regulatory implementation of ad hoc past performance evaluations provided, at FAR 15.610(c)(6), an explicit requirement that competitive range offerors be provided “an opportunity to discuss past performance information obtained from references on which the offeror has not had a previous opportunity to comment. . . .” GAO granted several protests where offerors had not been given an opportunity to comment on negative ex parte past performance information, even from agency sources, and GAO could conclude that this information had played a critical role in the source selection decision. E.g., McHugh/Calumet, a Joint Ven­ture, B-276472, June 23, 1997, at 6-9.

When Federal Acquisition Circular (FAC) 97-02 implementing the FAR Part 15 Rewrite was issued on September 30, 1997, FAR 15.610(c)(6) was subsumed in FAR 15.306(a)(2) and FAR 15.306(d)(2), but nonetheless, the drafters’ intention was that the substance of FAR 15.610(c)­(6) would remain:

• Ability of offerors to address adverse past performance information before it can be used in a source selection. Respondents, especially the small business community, expressed concerns that offerors might be excluded from a competition on the basis of incorrect past performance information that they have not had the opportunity to address. In response to this concern, the final rule provides that, when conducting communications prior to establishing the competitive range, offerors, including small entities, shall be granted the opportunity to explain situations that contributed to an adverse past performance rating to which they have not had a previous opportunity to respond, before such ratings can be the determining factor for exclusion from the competitive range.

FAC 97-02, 62 Fed. Reg. 51,224, at 51,226 (1997) (emphasis added).

GAO has taken a different approach. So much for the principles of statutory/regulatory construction!

In the first such case, Rohmann Services, Inc., B-280154.2, Nov. 16, 1998, at 8-9, per GAO, the offeror was “aware of much of that information,” and GAO refused to read FAR 15.306(a)(2) as mandatory, notwithstanding the clear, contrary language in the FAC 97-02 comments. See also Inland Serv­ice Corp., B-282272, June 21, 1999, at 4-5 (offeror was aware of the specific deficiencies claimed, had contested them, and was pursuing a contract claim).

GAO later elaborated on this departure from the precepts of Federal Acquisition Circular 97-02:

With regard specifically to clarifications concerning adverse past performance information to which the offeror has not previously had an opportunity to respond, we think that, for the exercise of discretion to be reasonable, the contracting officer must give the offeror an opportunity to respond where there clearly is a reason to question the validity of the past performance information, for example, where there are obvious inconsistencies between a reference’s narrative comments and the actual ratings the reference gives the offeror. In the absence of such a clear basis to question the past performance information, we think that, short of acting in bad faith, the contracting officer reasonably may decide not to ask for clarifications.

A. G. Cullen Construction, Inc., B-284049.2, Feb. 22, 2000, at 5.

GAO’s permissive view of the prefatory language in FAR 15.306(a)(2) (“offerors may be given the opportunity to clarify”) has been extended to submissions of incomplete past performance information. In U.S. Constructors, Inc., B-282776, July 21, 1999, an offeror submitted past performance information, but it offered no completed past performance references. To his credit, the contracting officer telephoned one reference, who rated the offeror’s past performance as “poor,” called a second reference, but calls were not returned, and a telephone number for the third reference turned out to be not a working number. Id., at 2. The contracting officer did not give the offeror an opportunity to clarify or discuss these ex parte past performance references, and the agency downgraded the proposal when rating it, before making an award on initial proposals. But this was sufficient for GAO, under the broad principle that offerors assume the burden of submitting a proposal adequate for evaluation:

On this record, we think that in the first instance, it was incumbent upon USC to comply with the RFP requirement to furnish completed past performance reference questionnaires in its initial proposal before it could credibly argue that it was entitled to communications regarding its performance history.

Id., at 4.

Ad Hoc Past Performance Information That Must be Evaluated

Systematic past performance information must be evaluated. While past performance references submitted with a competitive proposal need not be contacted, Rotech Medical Corp., B-283295.2, Nov. 8, 1999, at 3, ad hoc past performance information submitted with a competitive proposal must be evaluated, if only by reading, reviewing, and rating the proposal. Here there is an anomaly—while agencies may not use systematic past performance information for source selection purposes beyond 3 years after contract completion, relevant past performance information submitted by references identified in a competitive proposal, even past performance information or references obtained beyond 3 years after contract completion, may properly be evaluated. Oregon Iron Works, Inc., B-284088.2, June 15, 2000, at 7-8.

An agency may not fail to contact an offered reference, or fail to rate ad hoc past performance information, when the offeror is an incumbent under an agency contract comparable to the contract proposed by the solicitation, or the offeror is an incumbent under a comparable contract and this is personally known by one or more of the evaluators. TRW, Inc., B-282162, B-282162.2, June 9, 1999, at 4-5. An agency may not contact some past performance references, while at the same time it ignores other references, these for past performance as an incumbent under a comparable contract. SCIENTECH, Inc., B-277805.2, Jan. 20, 1998, at 5-6. Where an offeror’s past performance of a comparable contract is known to one or more of the evaluators, this past performance information may not be ignored even though an offeror does not submit a past performance reference for it. And neither may an agency ignore relevant past performance information that comes to light during the evaluation process, e.g., as a result of a pre­award survey. GTS Duratek, Inc., B-280­511.2, B-280­511.3, Oct. 19, 1998, at 14-15.

Derivative Ad Hoc Past Performance Information

FAR 15.305(a)(2)(iii) commands evaluation of relevant derivative ad hoc past performance information, i.e., evaluation of past performance information for a company’s predecessor, or proposed key personnel, or proposed major subcontractors.

The issue, in evaluations of relevant derivative ad hoc past performance information, is whether or not the performance of a proposed teaming part­ner/major subcontractor may “significantly bear on the likelihood of successful performance.” If not, if top level management of the proposed teaming partner/major subcontractor have not been involved, then this derivative ad hoc past performance information is not of any relevance. Xeno Technix, Inc., B-278­738, B-278­738.2, Mar. 11, 1998, at 3-4, citing ST Aerospace Engines Pte. Ltd., B-275725, Mar. 19, 1997, at 3-4. Likewise with a corporate parent or other subsidiaries that will not have meaningful involvement in performance of the proposed contract. Universal Building Main­te­nance, Inc., B-282456, July 15, 1999, at 6-7.

Contrariwise, if a proposed teaming partner is to be substantially involved in contract performance, even though this is properly a discrete part of the total performance, and overall management responsibility remains with the prime contractor, then an offeror is properly credited with relevant derivative past performance information of a proposed teaming partner/major subcontractor. Wack­en­hut Services, Inc., B-276012.2, Sept. 1, 1998, at 6.

Of course, this principle works both ways. If, on a relevant past performance reference, an offeror receives a bad ad hoc evaluation for poor performance of a subcontractor, the rating is proper, even though the poor performance is not its own—primes are responsible for subcontractor performance. Neal R. Gross & Co., Inc., B-275066, Jan. 17, 1997, at 3-4. The same is true for corporate predecessors, particularly so where the offeror operates in the same facility, with the same personnel and management team, and the corporate predecessor previously could not, or would not, meet requirements for the same items. Quality Fabricators, Inc., B-271­431, B-271­431.3, June 25, 1996, at 2, 6.

Whether or not an offeror has properly received credit for the relevant past performance of proposed key personnel depends on written or oral commitments from the proposed key personnel that they will work for the offeror. Thus even though an offeror proposes an incumbent’s personnel, and yet the incumbent also competes for the proposed contract, these sorts of commitments support a favorable ad hoc evaluation. EBA Engineering, Inc., B-275818, Mar. 31, 1997, at 6-8. This is not so, of course, in the absence of a commitment, a meeting of the minds on salary and benefits, and the proposed key persons knowing that their services have been offered. Aerospace Design & Fab­ri­ca­tion, Inc., B-278892.2 et al., May 4, 1998, at 6-8.

Agencies also may properly give non-incumbent offerors credit for the past performance of incumbent personnel where solicitations permit it, even though proposed key persons do not know that their services have been offered, on the proviso that there is also offered a compensation package at or above the level provided by the incumbent, and a detailed transition plan, together with a representation that the offeror will attempt to hire the incumbents. Con­struc­tion Tech­nol­ogy Lab­o­ra­tor­ies, Inc., B-281836, April 12, 1999, at 4-5.

Similar Ad Hoc Past Performance Information

41 U.S.C. § 405(j)(1)(C)(i) and FAR 15.305(a)(2)(ii) require that offerors be given an opportunity to identify past or current performance information “similar” to the offered requirement. FAR 15.305­(a)­(2)­(ii) leaves it to the source selection authority to determine the “relevance” of similar ad hoc past performance information.

Whether or not past or current performance is “similar” to the offered requirement depends on solicitation standards for determining comparability. In UNICCO Government Services, Inc., B-277658, Nov. 7, 1997, the solicitation provided, for required facilities management services, a standard of past or current performance at a building approximately 750,000 square feet, with a population of approximately 2,300, and for delivery of the same services as those required. Id., at 7. The absolute number of past or current performance references was therefore of no significance; the agency could make a best value award to an offeror with a single, outstanding past performance reference from a similar building, and this although a lower-priced offeror had more, but less glowing, past performance references from similar buildings. Id., at 8.

So also for those solicitations that do not define just what is “similar” past or current performance. Here, the agency could make a best value award on a higher priced proposal where the offeror’s past performance, in contrast to the protester’s past performance, was on larger contracts, for the full range of required services (household maintenance services—the protester’s experience was only as a painting contractor), and this even though the solicitation did not explicitly provide that magnitude and complexity of past or current performance would be considered. Birdwell Brothers Paint­ing & Refinishing, B-285035, July 5, 2000, at 6.

Agencies must consider whether or not comparative past or current performance is similar. In a small business set-aside solicitation for a proposed multi-million dollar contract for repair of aircraft navigational radio transceivers (TACAN), an agency improperly determined a lower-priced proposal to be the best value, this on the premise that the putative awardee’s performance risk (as well as the performance risk for all eight offerors) was as low as (but no better than) the protester’s (the incumbent), where the ad hoc past performance information submitted by the awardee was four contracts for less complex requirements, radio power supply repairs, and all four contracts were each significantly less than $1 million. NavCom Defense Elec­tron­ics, Inc., B-276163, May 19, 1997, at 3-5. See also Ogden Support Services, Inc., B-270­012.2, Mar. 19, 1996, at 6-7 (awardee’s ad hoc past performance information and references did not demonstrate mail/courier service or similar experience, as required by the solicitation).

Whether or not comparative past or current performance is similar does not depend on a comparison of the size of prior contracts performed, but rather, it depends on consideration of a history of successful performance of like services (delivery of like supplies) as those required:

Here, we find that the agency’s determination of PMT’s past performance as “marginal with a probability of poor performance” is not reasonably based. The agency’s assessment of PMT’s prior contract experience was based entirely on the conclusion that PMT had not performed contracts of similar “complexity.” The agency has not defined, either in the RFP or in its protest submissions, what is intended by the term complexity with respect to these services. Nonetheless, it seems reasonable to believe that factors relevant to complexity may include such things as the degree of care or special handling needed for disposal of specific types of waste, the size of the staff needed to accomplish the work, the level of reporting and record keeping required, and the number of vehicles needed for performance. The agency did not, however, take into account these factors or any other factor other than size.

PMT Services, Inc., B-270538.2, April 1, 1996, at 6.

Relevance of Similar Ad Hoc Past Performance Information

Agencies may consider the relevance of similar ad hoc past performance information, even though an offeror has not listed a particular prior contract in its competitive proposal. TEAM Sup­port Serv­ices, Inc., B-279379.2, June 22, 1998, at 6. When competitive proposals show comparable similar ad hoc past performance information, then an agency cannot decide that one offeror’s past performance is less relevant than the past performance of other offerors where the agency’s rating is not supported by the evaluation record, and in fact a particular offeror’s past performance is comparable to the past performance of the other offerors. Trifax Corp., B-279561, June 29, 1998, at 5-8.

And despite solicitation language requiring identification of current or past performance information “similar in magnitude,” agencies can properly consider as “relevant” only that similar ad hoc past performance information that is for services like those required. Ostrom Paint­ing & Sand­blast­ing, Inc., B-285­244, July 18, 2000, at 4.

Just as agencies may not fail to consider whether or not comparative past or current performance is similar, so also may agencies not fail to consider the relevance of particular comparative similar past performance information. In Green Valley Transportation, Inc., B-285283, Aug. 9, 2000, when the agency conducted a comparative evaluation of offerors, each with a number of similar ad hoc past performances, the agency did not relate the number of problems reported to the absolute number of shipments made in the same time period, Id., at 6; the agency did not consider an offeror’s justifications for problem shipments, Id., at 7; and the agency did not consider shipping volume when analyzing on-time performance, Id., at 10. This was not the consideration of relevance for similar ad hoc past performance information that is commanded by statute and regulation, and GAO recommended a reevaluation. Id., at 11.

Similar ad hoc past performance references (because they were for the aircraft fuel monitoring systems required for delivery) are more relevant than another offeror’s claimed similar ad hoc past performance information, and they are proper support for a best value selection, even on a competitive proposal with a significantly higher evaluated price. And this even though the protester might in fact have had relevant similar ad hoc past performance references on aircraft fuel-monitoring systems:

The record shows that Lear reported and documented more relevant successful experience than did Israel Aircraft. Moreover, since the RFP stated that it was the offe­or’s responsibility to provide the information sufficient for evaluation, including relevance of past contracts, and that the agency may rely solely on the information provided by the offeror, we do not think the agency was required to do a more extensive investigation than it did here, notwithstanding the unsupported general statements in Israel Aircraft’s proposal about claimed experience in fuel measurement systems. Thus, we find from this record that the evaluation of past perform­ance was reasonable.

Israel Aircraft Industries, Ltd., MATA Helicopters Division, B-274389, B-274389.2, B-274389.3, Dec. 6, 1996, at 9.

Neutral Past Performance Evaluations

Recall this deceptively simple FASA language:

In the case of an offeror with respect to which there is no information on past contract performance or with respect to which information on past contract performance is not available, the offeror may not be evaluated favorably or unfavorably on the factor of past cont­ract performance.

41 U.S.C. § 405(j)(2). How is this part of the statute implemented? Just what does the statute mean?

It turns out that the statute means just what it says: nothing more, nothing less:

• Use of neutral past performance evaluations. Some respondents expressed concerns that neutral past performance evaluations are not adequately defined, and that the rule does not contain sufficient implementing guidance. One respondent suggested that, to avoid abuses of neutral rating, offerors granted such ratings should be required to submit a record of their lack of opportunity to acquire a record of relevant past performance. The second proposed rule contained a definition of neutral rating, and asked respondents to provide suggestions for a better definition. We received only one such suggestion, and, upon analysis, we found that the suggestion did not actually provide a definition of neutral rating but, rather, provided a way to limit the application of neutral ratings. Instead, the final rule includes language based on 41 U.S.C. 405(j)(2) providing offerors, without a previous performance history, a rating that neither rewards nor penalizes the offeror. We selected this alternative to allow the facts of the instant acquisition to be used in determining what rating scheme would satisfy requirements of the statute.

FAC 97-02, 62 Fed. Reg. 51,224, at 51,226 (1997).

So again, the question—what does this mean? What happens when an agency wishes to make a best value selection, and the discriminator is past performance? If the proposed awardee has relevant past performance experience and another offeror has none, then, all other things being equal, wouldn’t a best value award based on past performance penalize the offeror without relevant past performance experience? GAO answered this question long ago, and since you know just how GAO has treated the ability of offerors to comment on negative ex parte ad hoc past performance information, disregarding the drafters’ intent, also expressed in Federal Acquisition Circular 97-02, you’ve got an answer here as well.

In Excalibur Systems, Inc., B-272017, July 12, 1996, the agency had made a best value award on a lower price, and in doing so, had evaluated the lower-priced offeror’s past performance as the same as that for a slightly higher-priced offeror. The slightly higher-priced offeror was the incumbent, one with relevant ad hoc past performance information; the lower-priced offeror had no production experience for the item, ergo no relevant ad hoc past performance information. Id., at 2.

GAO sustained this selection decision, but not without some dicta announcing that a best value selection of an offeror with relevant ad hoc past performance information over an offeror without relevant past performance information would not penalize the offeror without relevant past performance experience:

In general, we do not view RFP evaluation schemes that specify a “neutral” rating for vendors with no past performance record, see, e.g., Quality Fabricators, Inc., B-271431; B-271­431.3, June 25, 1996, 96-2 CPD ¶ __; Caltech Serv. Corp., B-261044.4, Dec. 14, 1995, 95-2 CPD ¶ 285, as precluding this same type of source selection decision-making. That is, we think that the use of a neutral rating approach, to avoid penalizing a vendor without prior experience and thereby enhance competition, does not preclude, in a best value procurement, a determination to award to a higher-priced offeror with a good past performance record over a lower-cost vendor with a neutral past performance rating.3 Indeed such a determination is inherent in the concept of best value.

Here, however, the Navy explains that its evaluation scheme does not call for rewarding a vendor with good past performance over a vendor with no relevant past performance. Rather, the Navy further explains, its evaluation scheme is intended to differentiate between those with good past performance and those with differing degrees of less than good performance. In other words, the Navy’s position is that under the RFP an offeror with a green rating is superior to an offeror with a red or yellow rating but not to an offeror with the neutral insufficient data rating.

We have no basis to disagree with the Navy. . . .

Id., at 3-4.

With respect, I can’t find any statutory provision, anything about “best value,” where the concept of best value overrides plainly-written statutory language, i.e., that an offeror without relevant past performance information may not be evaluated favorably or unfavorably on the factor of past contract performance. This being so, then how is it that a best value selection where the discriminator is past performance does not penalize an offeror without relevant past performance information? As noted by GAO in Excalibur Systems, wasn’t it congressional intent to “avoid penalizing a vendor without prior experience and thereby enhance competition?”

I had just this sort of case, and I presented it to the United States Court of Federal Claims. I lost. Unified Architecture & Engineering, Inc. v. United States, 46 Fed. Cl. 56, 63-64 (2000). It is now before the United States Court of Appeals for the Federal Circuit, and the matter will be submitted on oral argument this fall. So we’ll see how it turns out.


Save that the law so far ignores statutory language and the drafters’ intent in two areas, (1) the ability of offerors to comment on negative ex parte ad hoc past performance information, and (2) neutral past performance evaluations, routine use of past performance as an evaluation factor has developed just as could be expected. And there is still an opportunity for case law to iron out the problems identified in this article.

  Cy Phillips is a lawyer who specializes in government contracts, public procurement, federal acquisitions, construction, computer law, and civil litigation.
Copyright © 2000 Cyrus E. Phillips, IV. All rights reserved.




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