Whether you are a new company or you are new to the federal marketplace, it may seem that it is impossible to win your first contract.  Every solicitation requires you to show your “past performance” and since you’ve never gotten a contract with the federal government (yet!), what do you do? It seems like a Catch 22 – you have to have federal past performance in order to the win a contract, but you can’t have federal past performance if you don’t have a contract!

First, let me clarify a couple of common misunderstandings about what constitutes “past performance” with regard to federal proposals:

• Past performance is gained from ANY contract your company has performed or is currently performing. The Federal Acquisition Regulation (FAR) 15.305(a)(2)(i) states in part, “…shall provide offerors an opportunity to identify past or current contracts (including Federal, State, and local government and private) for efforts similar to the Government requirement.” Past performance is the information your references provide on how well you performed on their contract, regardless of whether it was a “commercial (private)” or “government” (public) contract. While the government may give preference to “government” past performance, they should tell you this preference within the solicitation with regard to how they are going to evaluate proposals. In my experience, most do not make this distinction, and treat both commercial and government past performance equally.

• Another potential past performance reference can come from your key personnel. Agencies are supposed to allow this when a small business doesn’t have past performance because the company itself is new. But the company’s owners, operators and other key personnel bring with them their experience (often of many years!) and how well they performed on previous efforts (their past performance). If the solicitation does not address this, you have a couple of options: submit a question to the government asking for clarification on this point, or just go ahead and submit your relevant key personnel experience and include past performance reference contact info as required for any past performance reference.

Even in light of the clarifications above, having no “government” contract past performance can be perceived as a weakness which translates into performance risk in the eyes of the evaluators.  So what do you do?  Here are a couple of suggestions that might help:

• Contracts with state agencies, cities, and counties are often for smaller quantities and scope of performance. In addition, they often do not ask for past performance references at all.  Investigate what your local government entities are purchasing, and what the rules are for going after and obtaining some of these smaller non-federal government contracts. Contracting with these smaller government entities will give you experience working with public entities in accordance with state and local laws. They will help show that you understand the differences between contracting with commercial organizations, and contracting and performing contracts for government agencies.

• Contracts with prime contractors who hold or are competing for federal contracts will also give your company a certain amount of experience performing for federal agencies. Keep in mind, your contract is still a “commercial contract” but performing as part of the team on a federal contract may give your company some visibility within the agency and some experience performing government requirements. Sometimes the agency’s Contracting Officer Representative (COR) will provide a past performance reference for your company, even though you are a subcontractor.

Ultimately, as stated in FAR 15.305(a)(2)(i), (ii) “The solicitation shall describe the approach for evaluating past performance, including evaluating offerors with no relevant performance history…” This can range from simply stating that an offeror with no relevant past performance will not be evaluated either positively or negatively and the rating will have no impact on their overall proposal rating.  It can also include specific information regarding the rules for submitting key personnel past performance information, or some other method for evaluating this factor. No matter what, you should not be penalized for your lack of relevant past performance references just because you are new.