Government Contracts: Past Performance of Sub-Contractors

Government agencies must take into account all past performance that they are aware of when evaluating proposals for past performance, including information from other proposals. 

In a recent decision, the GAO said that, where two proposals use the same sub-contractor to show past performance in similar projects, it is unreasonable for the evaluating agency to give different grades to the proposals for that past performance.

Earlier this month, the GAO decided on the bid protest of BC Peabody Construction Services, Inc.  BC Peabody filed a bid protest when the Army Corps of Engineers awarded a contract to one of its competitors, Eden Construction Co.  Both companies’ proposals included work by the same subcontractor to show that they had previous experience with similar projects. 

The Army Corps of Engineers required that the proposals include performance evaluations from two previous projects for the subcontractor.  BC Peabody received a rating of “Unacceptable” in the Past Performance category because they only submitted an evaluation for one of the subcontractor’s previous projects.  Eden submitted evaluations for two of the sub’s previous projects, and received a rating of “Acceptable.”

The GAO stated that, despite the fact that BC Peabody failed to submit performance evaluations on two different past projects as was required, the Army Corps of Engineers knew that the subcontractor deserved a rating of “Acceptable” from information submitted in Eden’s proposal.  In short, companies still need to submit proposals that meet the requirements of the RFP, but the evaluating agency cannot ignore information it is reasonably aware of when evaluating, even if that information comes from other proposals.

BC Peabody’s protest was ultimately denied because their proposal had other problems which would have lead to it not being awarded the contract regardless of getting a different grade for its subcontractor’s past performance.  In short, the GAO will only grant protests where the protester was actually harmed. 


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