“Educating the Government Contracting Community”

Another Important Lesson to Learn from a Failed Bid Protest Challenging Past Performance Evaluation: Actually Meeting Past Subcontracting Goals Matters

The Government Accountability Office (“GAO”) determined that the Department of the Army, Corps of Engineers (“Corps”) exercised proper discretion when it considered an offeror’s historical track record of not meeting its proposed small business subcontracting goals on previous projects as a component of its Past Performance evaluation. In this particular GAO protest, Cajun Constructors, Inc., B-409685 (July 15, 2014) www.gao.gov/assets/670/665045.pdf the protestor, Cajun Constructors protested the Corps’ evaluation of the Past Performance component of its proposal, specifically the Small Business Participation plan, claiming that the Corps departed from the RFP’s stated evaluation scheme.

Cajun Constructors picked a really tough procurement and issue to protest. First, this was a best-value procurement and as such the procuring agency has subjectivity “baked into” the selection process. Each member of the Source Selection Evaluation Board (“SSEB”) independently reviewed and scored each proposal and then prepared a consensus report. A consensus report is little more than a generalized amalgamation capturing the compromised and homogenized opinions of each of the SSEB members. The Source Selection Authority (“SSA”) then considers the SSEB’s consensus report along with its own analysis of the proposals and then reaches a subjective decision about the comparative values inherent in the strengths and weaknesses presented by the top contending proposals based on price and technical scoring. The SSA ultimately determines if it is in the Government’s interest to pay more for a better technical solution, and if so if the premium asked by the better technical offeror is worth it. Second, any bid protest that challenges the agency’s evaluation of Past Performance must get past GAO’s default setting to defer to the discretion of the agency, because GAO will not substitute its judgment for the agency’s. And GAO will not re-score proposals. Only if GAO determines that the agency’s evaluations are unreasonable or inconsistent with the RFP evaluation criteria will it recommend that the agency re-award the contract or, more likely, conduct a re-evaluation or re-solicitation.

But Cajun Constructors made an interesting argument. They claimed that when the Corps negatively considered Cajun’s historical track record of not hitting the projections included in its Small Business Participation Plans on previous contracts, in effect the Corps had retroactively converted those projections or goals into mandatory and thus impermissible quotas. Cajun Constructors argued that the final percentages of small business participation actually obtained through their prior Small Business Participation Plans was not the correct measure of their Past Performance, but rather the good faith effort that they made in attempting to meet those participation goals. The Corps evaluated Cajun Constructors’ Small Business Participation Plan as “Marginal.” Cajun Constructors contended that had the Corps properly considered their Past Performance in that area their proposal merited a score of at least “Acceptable.”

To determine if the Corps’ scoring methodology was reasonable and consistent with the RFP’s evaluation criteria and applicable procurement law GAO started with the RFP. What GAO found was that the RFP provided for the Corps to evaluate proposals on “the Offeror’s prior level of commitment to the participation of small businesses in performance of prior contracts” as demonstrated in the offerors’ proposals by the “presentation of facts, details of efforts and successes in complying with “ FAR 52.219-8. And the RFP explicitly reserved “Acceptable” ratings for proposals that clearly showed “by documentation a reasonable effort in complying with” that FAR clause.

GAO then noted that the administrative record showed that Cajun Constructors had a history of failing to meet small business participation goals that it projected for other prior contracts. Cajun Constructors had proposed exceeding several subcontracting goals of the Corps’ RFP. GAO concluded that the Corps properly considered the performance risk presented by an offeror with a history of submitting overly optimistic aspirational proposals and then not delivering results consistent with those proposals.

Cajun Constructors had the highest scored technical proposal and its price was just 2.6% more expensive than the winning proposal. Plenty of best-value awards have been made to technically superior proposals that demanded a much higher premium than that. But the discretion afforded to federal agencies’ Past Performance evaluations always makes protesting on such grounds difficult. And with proposal evaluation criteria including detailed post mortem examinations on how successfully offerors live up to the projections contained in past Small Business Participation Plan projections, avoiding Cajun Constructors’ situation is the best solution.

At a minimum all government contractors should know how their Past Performance looks generally and with regard to specific compliance issues. For assistance with reviewing or challenging your company’s Past Performance or for preparing proposals that implement plans to correct for deficiencies in your Past Performance, please Contact Us at info@gcarl.com.

And Become a GCARL Member. Visit us here to learn about the benefits: www.gcarl.com/becoming-member

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