Back when Congress passed the FY2017 NDAA, they included a provision (Section 1822) requiring SBA to create a pilot program to provide opportunities for qualified subcontractors to obtain past performance ratings. Specifically, Congress mandated that SBA create a 3-year pilot program whereby small business concerns without a past performance rating as a prime contractor in the Past Performance Information Retrieval System (PPIRS) (i.e., without a CPAR) may request a past performance rating in the Contractor Performance Assessment Reporting System (CPARS), if the small business is a first tier subcontractor under a “covered contract.”  This pilot program has been codified at 15 U.S.C. 637(d)(17).

Recently, SBA published notice indicating that it will soon – possibly as early as late June 2018 – be commencing this pilot program. This exciting program could give both small business subcontractors and large business primes an additional tool to improve their chances of winning future contract awards. SBA has called for comments on the pilot program by June 19, specifically on the process outlined in SBA’s notice and SBA’s proposed application form for the pilot program (proposed SBA Form 2465).

Who is Eligible to Participate in the Pilot Program

In order to be eligible for the pilot program, a subcontractor must meet all of the following criteria:

  1. Be a Small Business Concern;
  2. Be without a Past Performance Rating as a prime contractor in CPARS;
  3. The application must be made in connection with the Small Business Concern’s performance of a first-tier subcontract under a contract that requires a subcontracting plan;
  4. Completed an application and submitted within 270 days after the Small Business Concern completed the work for which it seeks a past performance rating OR 180 days after the prime contractor completes work on the contract, whichever is earlier.
  5. Subcontract value meets the mandatory CPARS level: exceed the simplified acquisition threshold (as defined in FAR 2.101) or subcontracts for architect-engineer services valued at $35,000 or more as provided in FAR 42.1502; and
  6. Subcontractor is registered and active in the System for Award Management (SAM) located at www.sam.gov.

As seen above, the biggest restriction to this program is that to qualify the small business subcontractor cannot already have any past performance rating “as a prime” in CPARS. However, the pilot program does not necessarily limit a subcontractor to a single past performance review. Nothing prevents a subcontractor from receiving multiple past performance reviews as a subcontractor in CPARS under the pilot program. Small business concerns who only do work as subcontractors may be able to use this program multiple times, which could make them both a significantly more attractive teaming partner for large business primes and increase their own chances of winning prime contracts in the future.

How do Subcontractors Request a Past Performance Rating Under the Pilot Program?

  1. An eligible small business subcontractor completes a SBA Form 2465, which includes, amongst other things, the subcontractor’s suggested performance ratings for each past performance element (i.e. self-ratings) and “justification and written evidence supporting [each] suggested rating.”  The small business subcontractor then certifies the form and sends it to SBA’s Commercial Market Representative (the “Appropriate Official”) at SPPP@sba.gov.
  2. The Appropriate Official forwards the SBA Form 2465 to the Prime Contractor and the Office of Small Disadvantaged Business Utilization (“OSDBU”). The OSDBU and Prime Contractor have 30 calendar days to concur with the small business subcontractor’s suggested ratings, or to contest the suggested ratings and provide justifications for disagreement.
  3. If the OSDBU and the Prime Contractor both agree on a rating, or if either the OSDBU or Prime Contractor fail to respond and the responding person agrees with the small business subcontractor’s suggested ratings, the Appropriate Official shall enter the agreed-upon past performance rating in CPARS.
  4. Alternatively, if the OSDBU and the Prime Contractor both fail to respond to the submitted SBA Form 2465 within 30 days, or if they disagree about the rating, or if either the OSDBU or Prime Contractor fail to respond and the responding person disagrees with the small business subcontractor’s suggested rating, the disagreeing persons (OSDBU and/or Prime Contractor) shall submit a notice contesting the application to the Appropriate Official. The small business subcontractor then has an opportunity to submit comments, rebuttals, or additional information relating to its past performance. The Appropriate Official shall enter into CPARS “a rating that is neither favorable nor unfavorable” along with the initial application from the small business subcontractor, any responses of the OSDBU, the prime contractor, and any additional information provided by the small business subcontractor.

How a Part Performance Review Issued Under the Pilot Program Can be Used

Congress included the following broad language in the legislation concerning the use of past performance reviewed issued under the pilot program: “A small business subcontractor may use a past performance rating given under [this pilot program] to establish its past performance for a prime contract.”

Why Large and Small Businesses Should be Interested in this Pilot Program

Past performance reviews are the life blood of source selection in federal procurement. Nearly every federal procurement will have a past performance evaluation criteria of some kind, and generally past performance is the second most important evaluation criteria (after price). While the law (FAR 15.305(a)(2)) requires that 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,” the reality is that contractors that receive neutral evaluations on the past performance factor rarely win a contract award, absent a major price advantage. Given the importance of the past performance reviews to the source selection process, especially those past performance reviews that reside in CPARS/PPIRS, the SBA’s Pilot Program for Small Business Subcontractor Past Performance Reviews can provide significant advantages for both large business primes and small business subcontractors.

For small business subcontractors the advantages are clear. The pilot program will allow small business subcontractors to get one (or potentially multiple) past performance reviews in CPARS if they do not already have a past performance review as a prime in CPARS. Moreover, because of the process for program, small business subcontractors will be able to receive a past performance review on their own terms, a distinct advantage from the circumstances a prime contractor encounters. The small business subcontractor will be able to propose ratings (which become the ratings default if not countered by the reviewers), they get to cherry-pick which projects/periods of performance to request past performance review for (which allows the small business to only request a past performance review when it knows its performance has been excellent), and the risk of a negative review is mitigated by the requirement that if their is disagreement on a rating the past performance review will be entered into CPARS with “a rating that is neither favorable nor unfavorable.”  Given all these advantages, small business subcontractors without a review in CPARS as a prime should be able to use the pilot program to build a record of past performance, which will better enable them to compete for procurements as a prime contractor in the future, and which will make them a more attractive teaming partner to large business primes (as many source selections allow or require consideration of the past performance records of both the prime and major subcontractors).

This pilot program could also provide major benefits to large business primes that encourage their small business subcontractors to apply for past performance reviews. As already noted, many source selections allow or require consideration of the past performance records of both the prime and major subcontractors. Thus, large business primes often have an increased chance of receiving award if their subcontractors have a strong record of relevant past performance. Under the pilot program, the large business prime actually has influence on the past performance rating that its subcontractor receives, which essentially gives large business primes a role in improving their own team’s past performance record for use on future procurement. Large business primes should encourage the small business subcontractors that they frequently team with to take advantage of this pilot program, thereby allowing the large business prime to present a stronger record of past performance for its team in future procurements.

With every new administration, there is both great uncertainty and opportunity in federal government contracting. To help you navigate the rough seas of doing business with the federal government in this new administration, we have assembled nationally recognized practitioners who will cover topics relevant to government contractors large and small, novice and seasoned. Session topics include:
– Ten Things Every Contractor Needs to Know When Doing Business with the Federal Government
James F. Nagle | Oles Morrison Rinker & Baker LLP | Seattle, WA
 
– Writing a Winning Technical Proposal – From the Contracting Officer’s Perspective
Mona Carlson, Mary Jo Juarez | PTAC Kitsap Economic Dvlpmnt. Alliance – Navy Contracting Officer (retired) | Kitsap, WA
 
– Keys to Winning Bid Protests and Defending Contract Awards
Adam K. Lasky | Oles Morrison Rinker & Baker LLP | Seattle, WA
 
– Navigating the Complex Rules Governing Data Rights
Jonathan M. Baker | Crowell & Moring LLP | Washington D.C.
 
– Overlooked Risks of Being a Lower-Tier Government Contractor
Alan C. Rither | Pacific Northwest National Laboratory | Richland, WA
 
– Mistakes to Avoid in the Claims and Litigation Process
Donald G. Featherstun | Seyfarth Shaw LLP | San Francisco, CA
 
– Adapting to Buy American and Domestic Preference Rules in the Trump Administration
Howard W. Roth | Oles Morrison Rinker & Baker LLP | Seattle, WA
 
– Understanding & Managing the Risk of Suspension & Debarment
Dominique L. Casimir | Arnold & Porter Kaye Scholler LLP | Washington D.C.

Thursday, November 16th 

SEATING IS VERY LIMITED AND WILL GO QUICKLY!
You may also attend via WEBINAR

Register for seminar or webinar at www.washingtonptac.org/seminar

Click HERE to see the event flyer.

 SEATTLE AGC BUILDING
Second-floor conference room
1200 Westlake Avenue North – Seattle WA 98109
Parking will be validated.

060110-N-3019M-001In a decision publicly released June 5, 2017, the U.S. Government Accountability Office (GAO) ruled in favor of Oles Morrison Rinker & Baker LLP’s (“Oles Morrison”) client, TOTE Services, Inc. (TOTE), in a bid protest challenging the U.S. Navy – Military Sealift Command’s (MSC) award of $32 million O/M contract for the Sea-Based X-Band Radar (SBX-1).  The SBX-1 is the floating, self-propelled, mobile radar system used by the U.S. Missile Defense Agency to detect and track incoming ICBMs fired at the United States.

GAO sustained TOTE’s protest, holding that MSC had committed multiple errors in the evaluation of the awardee’s past performance.  Namely, MSC improperly credited the awardee for relevant performance without considering the quality of that performance, and credited the awardee for positive performance without considering its relevance.  GAO also held that MSC lacked a reasonable basis to conclude that the awardee’s singular past performance contract of its own was “very relevant.” Continue Reading Oles Morrison’s Government Contracts Team Wins GAO Bid Protest Challenging Award of O/M Contract for Missile Defense Radar Vessel – SBX-1

cropped-cropped-cropped-web-header1Oles Morrison attorney, Adam K. Lasky,  has been invited to present at the Alliance Northwest 2017 Conference on Thursday, March 19 at the Washington State Fairgrounds Showplex. His presentation, “A Contractor’s Guide to Mitigating Negative Past Performance Reviews” will provide contractors with a roadmap for dealing with negative past performance reviews, including best practices for collecting CPARS, responding to and disputing negative CPARS, and drafting proposals and creating teaming arrangements to mitigate negative CPARS. The presentation will also explore the availability of monetary damages for unfair negative CPARS.

The Alliance NW Conference is the premier government contracting event in the Northwest, bringing together over 750 prime contractors, government agencies and small businesses for a full day of relationship building and educational opportunities. For a schedule of events and activities at the conference, or to register for the conference, click here. Readers of The Procurement Playbook can receive $20 off their registration fee of $115 with the code “FriendANW2017.” 

14076937585_ca93f6db1a_kAs past performance reviews become an increasingly important part of the bid evaluation process, the performance assessments catalogued in the Contractor Performance Assessment Reporting System (“CPARS”) will have greater significance than ever before. CPARS reviews generally set forth the Government’s evaluation of a contractor’s performance based on several factors, including quality of performance, adherence to performance schedule, cost control, and management capabilities. While each assessment is theoretically based on objective facts and data, it is not unheard of for contractors to receive biased, inaccurate, or misleading evaluations. These unfair assessments can substantially damage a contractor’s prospect for securing future Government contract awards, but contractors currently have limited avenues to address them.

The strongest remedy available in recent years has been a declaration from the Armed Services Board of Contract Appeals (“ASBCA”) or the Court of Federal Claims (“COFC”) that the evaluation was arbitrary and capricious together with a remand to the contracting officer with “proper and just” instructions, but this remedy does not necessarily scrub the negative review from CPARS. However, the ASBCA may have left the door open for a new type of remedy available to contractors who receive an unfair CPARS assessment. Continue Reading ASBCA Opens the Door to Contractors Seeking Monetary Damages for Unfair CPARS Reviews

Yesterday, we provided an overview of eleven of the biggest changes coming as a result of SBA’s release of its final rule expanding the mentor-protégé program to all small business.  One of the changes we noted was that, in small business set-asides procurements, agencies will be required to consider projects performed by the individual members of a mentor-protégé joint venture offeror when evaluating experience/past performance.

Today we dissect this specific change, and examine whether it actually benefits mentor-protégé joint ventures.  Arguably, this change does more harm than good to mentor-protégé joint ventures.

The Good

One thing the new rule solves is that it prohibits agencies from limiting consideration to projects performed by the joint venture itself when evaluating the experience/past performance of a joint venture offeror in a small business set-aside.  While such restrictions (as ridiculous they were) were sometimes upheld by GAO when protested, these restrictions were not common, and when an agency lacked a legitimate reason for these restrictions they were often found unduly restrictive of competition and improper by GAO.  So, since these restrictions were not common place, and often an agency voluntarily lifted such restrictions if protested, the benefit to mentor-protégé joint ventures from this new rule may be rather limited.

The Bad

On the other hand, the new rule does not solve, and possibly worsens, a related and more pressing problem for mentor-protégé joint ventures in experience evaluations — where the agency considers the experience of both the mentor and protégé, but then downgrades the joint venture’s experience rating on account of the protégé’s lack of experience (despite the fact that the mentor has plenty of experience).   Continue Reading Dissecting the Changes to SBA’s Mentor-Protégé Program: Do the New Past Performance/Experience Rules for Joint Ventures Actually Benefit Mentor-Protégés?

One might assume that if the top two proposals in a best-value procurement receive the same ratings on all non-price factors, the proposals are obviously equal in technical merit and the award must go to the lower priced proposal.  However, this assumption would be incorrect.  And, as GAO recently pointed out in CPS Professional Services, LLC, B-409811, B-409811.2, August 13, 2014, source selection officials who make this assumption put their contract awards at risk of being overturned by a bid protest.

The CPS Professional Services, LLC protest involved a solicitation issued by the Department of Homeland Security Immigration and Customs Enforcement (ICE) for school certification support services, to be awarded on a best value trade-off basis (three equal factors: price, past performance and technical approach).  ICE received quotes from two firms (CPS and Arc Aspicio), and after evaluating each quotation assigned both firms the same ratings on both non-price factors (Technical Approach: Good; Past Performance: Low Risk).  ICE then awarded the contract to Arc Aspicio “because both firms received identical ratings under the non-price factors” and “Arc Aspicio submitted a lower-priced quotation than CPS.”

CPS protested the award, arguing that ICE had failed to fairly consider the relative merits of the vendors’ respective past performance in its award decision.  GAO agreed. Continue Reading Two Proposals Receiving Identical Adjectival Ratings are Not Automatically Equal in Merit

In a recent bid protest decision concerning the Department of Energy’s award of legacy management support services award contract, GAO held that the agency acted reasonably when evaluating protestor WSS’s past performance on the incumbent contract by disregarding two Contractor Performance Assessment Reports (“CPARs”), which reflected “exceptional” performance, in favor of a detailed award fee determination reflecting a mix of good and marginal performance. GAO determined that the agency acted reasonably in disregarding the CPARs because

not only were the reports ‘erroneously written and approved by a government employee without the authority or knowledge of the contracting officer and contracting officer representative,’ they were prepared by a person unfamiliar with the contractor’s performance.”

GAO’s discussion of this procurement reflects some serious problems with the CPAR system used for evaluating prime contractor performance on federal contracts. Continue Reading The Danger of Uniformed and Inaccurate CPARs