GAO Sustains Protest For Improper Evaluation of Joint Ventures Past Performance

Avoid Costly Mistakes When Submitting 8(a) Joint Venture Past Performance 

GAO protests continue to surface because of improper past performance evaluation of proposals. In a recent case, GAO sustained a protest because NASA considered the awardee’s past performance.  There was no record of actual performance.

The problem was that the solicitation stated that NASA would not consider past performance if there was no documented performance history. NASA did the exact opposite.

A recent contract award with no record of past performance would not substantiate an agency’s past performance evaluation.

The second reason for the GAO protest was that the 8 (a) joint venture failed to get the Small Business Administration’s (SBA) approval for an addendum to the existing joint venture agreement.

Government contractors that have an approved SBA joint venture must be aware that besides having the SBA approve the original joint venture agreement, the SBA must also approve changes to the contract.

The government contract in question was to be evaluated based on technical acceptability and best value based upon trade-off between past performance and price. This is a common practice for federal contracting agencies in negotiated procurements. Bidders should be aware of the pitfalls that can surface when the competition files a bid protest. This is one case where the odds were against the awardee / intervenor.

Protestor’s Past Performance Evaluation Arguments to GAO

The basis of the protest was that NASA conducted an improper evaluation of  joint ventures’ past performance.  The agency treated bidders unequally under the past performance evaluation factor. This also transferred into an unreasonable best value and trade-off decision.

• When one element of the best value tradeoff is flawed, then there is an argument that the entire best value analysis is also unreasonable.

In this respect, NASA failed to follow the terms of its own solicitation. GAO also found that despite a recent award to one of the joint venturer’s, when there is no record of how the contractor performed, then the agency could not justify considering that past performance submission.

• Contractors must not be quick to refer to recently-awarded projects when there is no CPARS or contractor past performance.

SBA Joint venture approval. Another mistake made by the 8(a) joint venturer is that despite having an approved joint venture agreement, it did not follow SBA regulations. SBA JV regulations require changes or addendums to the initial agreement to be approved by the SBA. See 13 CFR 124.513(a), (e).

One important aspect of the dispute was whether the SBA approves 8(a) set-aside contracts, or whether the agency does. It is true that in 8(a) sole-source contracts the SBA accepts the contract on behalf of the 8(a) Program participant.

• The central concern was that the joint venture awardee was ineligible for award because it did not follow the requirements of 13 CFR 124.513.

In sum, The SBA must approve joint venture agreements, and any changes, before award. Also. When a company gets a new contract, it should be aware that using that contract as relevant past performance can be tricky. Especially when because there is no record for the agency to review.

Find Out The Basics About Joint Venture Agreements

For help with protesting SBA joint venture agreement violations, or intervening in a GAO protest for past performance evaluation issues, call our government contract law attorneys at 1-866-601-5518. FREE INITIAL CONSULTATION.