The number one complaint I receive from small businesses is, “I can’t do business with the Government, because I have no past performance.” I am here to tell you – THAT is a huge misnomer! What exactly is past performance and how does it compare to experience? From the Government’s perspective, past performance is merely an evaluation factor used to assess an offeror’s capability. It tells the Government how well a firm has done the work in the past and it answers questions such as:
- Did the firm meet its obligations?
- Were invoices complete and compliant?
- When something didn’t go as expected, was it resolved in a timely and amendable manner?
Past performance is often confused with experience. Experience is whether a firm has done similar work. When the Government talks about experience, it is discussed in terms of recency, relevancy and magnitude. They are looking for answers to questions such as:
- Has the firm ever performed similar work?
- Was it of the same magnitude? (Magnitude relates to both value and complexity.)
- How recent was it? (The Government typically defines recent as being within the last 3-5 years.)
If you have experience, you have past performance! Here’s why… the consideration of prior experience and past performance is not limited to work performed with the government. The government is obligated to consider all work performed including work for the federal, state, and local governments, as well as in the private sector. They do this because they are risk adverse. They want to know you are capable of performing. Past performance describes the degree of confidence the government has and the likelihood of your success. As a business that is new (AKA unknown) to the government, it is hard for them to assess whether you will be successful or not, so they rely on past performance. Past performance has long been a strong indicator of future performance and buyers favor firms that have successfully completed similar efforts, using the same people under comparable conditions in the same industry.
Evaluating past performance is also a compliance issue. Commercial firms have known for a long time that a contractor’s past performance is a major consideration when selecting a high-quality supplier. The government finally caught up with this notion with the issuance of the Federal Acquisition Streamlining Act (FASA) in 1994. The FASA encouraged or required (depending on the dollar value) Contracting Officers to look at two things during source selection… price and past performance. Previous to the FASA, companies who hired the best proposal writers, often won the work. As such, when the FASA was implemented and past performance was taken into consideration, it essentially leveled the playing field so that firms who wrote the best proposals did not automatically win. The FASA also states that an offeror for which there is no information on past performance or with respect to which information on past performance is unavailable, may not be evaluated favorably or unfavorably on the factor of past performance. In this rare scenario, an offeror receives a neutral rating. The Government must also provide a fair opportunity to discuss any negative past performance with the offeror. And speaking of negative past performance, believe it or not, something as simple as NOT invoicing can create problems.
Additionally, an offeror can (and should) use their resources in their past performance write ups. If your proposed personnel, subcontractors, teammates, etc., have experience on similar contracts (again for any contract – not just government work) or they were a major subcontractor, then you should discuss that in the proposal. Doing this can mitigate your chances of receiving a neutral rating when you have no other relevant past performance information.
Remember, not having government experience or past performance does not mean you don’t have experience or past performance. You would not be in the business if you had no experience or past performance.