“Educating the Government Contracting Community”

Agency Exclusion of Participating Affiliate’s Experience and Past Performance May Be Unduly Restrictive of Competition GAO Finds

In Iyabak Construction, LLC (B-409196, February 6, 2014), pre-award bid protest was filed challenging a request for proposal issued by the Army Corps of Engineer. In the RFP, offerors were notified that the “experience of the offeror’s parent, affiliate, or separate divisions” could not be used to satisfy the RFP’s experience factor. Moreover, “the offeror will not receive credit for relevant past performance of a parent, affiliate, or separate division” when an offeror’s past performance is evaluated. The protestor, Iyabak Construction, who had obtained” firm commitments from its affiliate to be meaningfully involved in contract performance,” found such terms to be unduly restrictive and protested.

The Army Corps of Engineers justified its exclusion of affiliate experience and past performance based upon past negative experiences of the agency when it previously considered the experience and past performance of offerors’ affiliates. In those prior instances referenced by the agency, “[t]he proposals received from offerors would include general statements about the availability but did not demonstrate any meaningful involvement of the affiliate or include any commitment that the affiliate would perform any part of the contract or provide personnel or resources.”

Although GAO found the agency’s concern to be compelling, GAO still held that the agency’s blanket restriction in this case was not warranted where “there are firm commitments for affiliates to participate meaningfully in contract performance.” Instead, GAO reasoned that the agency’s concerns could be addressed by a “less restrictive method of evaluating offerors’ past performance and experience” such as “considering an affiliate’s past performance and experience under the RFP…contingent upon a firm commitment that the affiliate would participate meaningfully in the performance of the contract.” http://www.gao.gov/assets/670/660826.pdf

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