Takeaways

  • Procurements under FAR Part 8 are subject to a different default rule than FAR Part 15 procurements, GAO rules.
  • Absent clear direction from the solicitation, an agency conducting a Part 15 procurement must consider significant subcontractors’ past performance references, while an agency conducting a Part 8 procurement has discretion to disregard such references.
  • Offerors may wish to seek clarification if a solicitation is not clear regarding whether the agency will evaluate subcontractor past-performance references.

When an offeror for a federal contracting opportunity submits its proposal, it typically is required to submit information evidencing its recent “past performance” experience, and this information often comprises one of the evaluation criteria that the agency uses to reach its award decision. But who is the “offeror”—the prospective prime contractor alone, or all members of the prime contractor’s team, including its proposed subcontractors? And, in the absence of clear solicitation criteria, is an agency required to consider subcontractors’ past performance references, or does it have discretion to do so?

These are questions that the Government Accountability Office (GAO) wrestled with in Atlantic Systems Group Inc. (B-813901, et al.; decision at this link). Ultimately, GAO reached the complicated conclusion that procurements conducted pursuant to Part 15 of the Federal Acquisition Regulation (FAR), which governs “Contracting By Negotiation,” are subject to a different default rule than those conducted pursuant to FAR Part 8, which governs Federal Supply Schedule (FSS) contracts. Specifically, while GAO has held that an agency does not have discretion to reject a proposed significant subcontractor’s past performance information in connection with a Part 15 procurement, Atlantic Systems establishes that an agency apparently does have such discretion in connection with a Part 8 procurement.

Atlantic Systems involved a protest by an unsuccessful offeror for a contract to provide information technology-related services to the Department of Education. The procurement was conducted under FAR Part 8 among contractors holding FSS Schedule 70 contracts. The protester, Atlantic Systems, challenged several aspects of the agency’s evaluation of its proposal including, as relevant here, the agency’s evaluation of corporate experience and past performance. The solicitation had required that each “offeror” submit at least three performance references in order to allow the agency to conduct these evaluations. Atlantic Systems submitted two performance references on its own behalf and two pertaining to its proposed subcontractor. Interpreting the term “offeror” to refer only to the prospective prime contractor itself, not to its team collectively, the agency refused to consider the past performance references submitted for Atlantic Systems’ proposed subcontractor.

Atlantic Systems’ protest argued that the agency was not at liberty to disregard these references, absent any clear guidance to that effect in the solicitation. Atlantic Systems relied on an earlier protest decision, Singleton Enterprises (B-298576, Oct. 30, 2006, 2006 CPD ¶ 157), in which GAO held—in the context of a FAR Part 15 procurement—that where a solicitation was silent on the meaning of “offeror” for the purpose of a past performance evaluation, an agency could not simply disregard past performance references submitted on behalf of a proposed subcontractor. GAO had reasoned in Singleton that FAR 15.305(a)(2)(iii) encourages agencies to take into account the past performance of major subcontractors or subcontractors that will perform critical aspects of the requirement in proposal evaluations, and GAO also noted that several protest decisions had confirmed an agency may consider subcontractor experience unless the solicitation expressly prohibits it. Accordingly, GAO concluded in Singleton that an agency’s decision to limit past performance references to those of the prime contractor itself reflected a latent ambiguity in the solicitation, because just as it was reasonable for the agency to interpret “offeror” to mean the prime contractor, it also was reasonable for the protester to interpret “offeror” to include proposed subcontractors.

While acknowledging Singleton’s factual similarity, GAO relied on the distinction between FAR Part 15 and Part 8 to reach a different result in Atlantic Systems, as follows:

Here, in contrast, the solicitation was issued pursuant to FAR part 8 and requested corporate experience of the organization and past performance information for the offeror, without mentioning subcontractors.... FAR part 8 does not suggest that in evaluating an offeror’s past performance an agency should also consider the past performance of its proposed subcontractors. Accordingly, we do not find that the solicitation here is ambiguous, and it was reasonable for the agency to consider the experience and past performance of the offeror (i.e., the entity that submitted the offer) and not its subcontractors.

The Atlantic Systems decision, thus, appears to establish two separate default rules—i.e., rules that apply where a solicitation is silent on the issue: (1) in a FAR Part 15 procurement, an agency must consider past performance references submitted for proposed subcontractors, at least for major subcontractors or subcontractors that will perform critical aspects of the requirement; and (2) in a FAR Part 8 procurement, the agency has discretion to disregard subcontractor references. Of course, specific solicitation language can change the rules for any given procurement.

In light of Atlantic Systems, offerors competing under FAR Part 8 procurements must be particularly careful about the past performance references they submit. If the relevant solicitation is not clear regarding whether the offeror is permitted to submit references pertaining to its proposed subcontractors, an offeror assumes a significant risk in submitting such references without first clarifying the agency’s intent. Such an offeror may wish to pose a question to the agency during the solicitation’s question-and-answer period that seeks such clarification. Indeed, this practice makes equal sense for Part 15 procurements and may help all parties avoid protests concerning ambiguous solicitation terms.