Neutral Past Performance Ratings

When an agency decides that your proposal does not show relevant past performance, the general rule under DOD Source Selection procedures is that you should not be rated either favorably or unfavorably. In other words, agencies should give bidders neutral ratings. Where a federal agency excludes and offeror from the competitive range based solely on a neutral or unknow past performance rating, the court will more than likely sustain a bid protest that challenges the exclusion. See, e.g., Wilson Beret Co., B-289685, Apr. 9, 2002, 2002 CPD ¶ 206 at 8-9.  For example, GAO has held that  an agency’s exclusion of an bidder from the competitive range based solely on a neutral or “unknown” past performance rating constitutes “unfavorable treatment” and is improper. 

There are still situations where an agency’s source selection panel may assess your lack of relevant past performance as the sole basis of giving a weakness or deeming your proposal as technically unacceptable. This could be a problem.

Perceived Past Performance Problem In Teaming Arrangements

New small businesses, or those trying to get larger government contracts, can experience problems when the source selection board suggests that because there is a teaming partner or a subcontractor that the offeror has no relevant past performance.

It is indisputable that DOD source selection procedures and procurement rules allow for offerors to gain the benefits of teaming agreements and joint venture agreements.

• Minimal past performance should not suggest a negative past performance rating
• Agencies should look to past performance of teaming partners as a way of enhancing the prime’s technical ability.

Exception to the rule

Unless the solicitation states otherwise, government contracting agencies should consider the past performance of teaming partners or named subcontractors.

• The prime on its own merit should be rated as having a neutral rating.
• This means that the prime and teaming partner together should then gain more than a neutral rating.

When balancing the rule about neutral past performance ratings, bidders must also be aware of the Ostensible Subcontractor Rule and affiliation landmines because the proposal could still violate SBA regulations.

Bid Protest and FAR 15.305 Neutral Ratings Language

FAR 15.305(a)(2)(iv) provides:

“In the case of an offeror without a record of relevant project performance or for whom information on previous performance is not available, the offeror may not be evaluated favorably or unfavorably.” See information about CPARS ratings.

When Filing a GAO Protest Can Agencies Make Mistakes When Evaluating Your Proposal?

The rule on neutral past performance ratings supports the principle that bidders can neither be punished nor rewarded for the lack of relevant past performance. However, GAO has found that an evaluation scheme that penalizes an offeror for having a neutral past performance evaluation is improper. See Colson Servs. Corp., B-310971, et al., Mar. 21, 2008, 2008 CPD ¶ 85.

• If the evaluation record contains numerous references to your lack of relevant past performance,  a GAO protest decision could very likely find that the Agency has essentially punished you.
• For challenging CPARS past performance evaluation ratings, there are specific requirements to follow.

Agency Mistakes With LPTA Neutral Ratings and Evaluations

Although the past performance evaluation rules do not intend to allow bidders to have their competitive position improved due to a lack of relevant past performance, procurements evaluated as lowest price technically acceptable (LPTA) create a positive result for contractors with neutral past performance scores. With respect to the neutral rating, the FAR requires that bidders without a record of relevant past performance, or for whom information on past performance is not available, may not be evaluated favorably or unfavorably on past performance.  FAR 15.305(a)(2)(iv).

In other words government contractors with admittedly no relevant past performance could still win a contract that is LPTA and could potentially win a protest if the Agency deems its proposal as technically unacceptable for lack of relevant past performance.

• The goal for an offeror in this situation is to make sure that your technical proposal is acceptable in all aspects.

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For help with DOD source selection procedures and neutral past performance ratings in a GAO protest, call our government contract lawyers at 1-866-601-5518.