As restated in a recent GAO decision: “The evaluation of past performance is a matter of agency discretion, and we will review the evaluation only to ensure that it was reasonable and consistent with the solicitation's stated evaluation criteria and applicable statutes and regulations.” Matter of: C2g Ltd. Co., B-415938.2 (June 26, 2018). In this way, the agencies that review the evaluation of past performance—including past affiliate performance in the 8(a) context—maintain their ability to decide on a case-by-case basis whether past performance must be part of the criteria considered when awarding a project.
FAR 15.305(a)(2) states that past affiliate performance should be considered, but not that it must be considered.
It is well-settled that the terms of the RFP may limit the consideration of affiliate past-performance. See e.g., Matter of: Doyon-Am. Mech., Jv; Najv, LLC, B-310003 (Nov. 15, 2007) (“[T]he experience of the awardees' parent/affiliate corporations was precluded by the provisions of this solicitation.”). However, there are limits to the limits. A solicitation may not wholly preclude affiliate performance if the affiliates “will participate meaningfully in contract performance.” Matter of: Iyabak Constr., LLC, B-409196 (Feb. 6, 2014). Still, if there is a good enough reason to limit past performance to the offeror exclusively, then the Government could be excused from considering affiliate past performance. If the Government takes this approach, the rationale for doing so must be clearly articulated. Valor Constr. Mgmt., LLC, B–405365 (Oct. 24, 2011).
This see-saw of sometimes allowing and other times disallowing the exclusion of past affiliate performance is due to the Government’s desire to maintain discretion as restated just weeks ago C2g Ltd. Co., ,as well as in Eagle Eye Elec., LLC v. United States, No. 18-173C, 2018 WL 2453136 (Fed. Cl. May 31, 2018), in which the Court of Federal Claims observed:
[T]he Government Accountability Office line of decisions upon which plaintiff rests “permits, rather than requires, attribution of the affiliate’s past performance to the offeror.” . . . Thus, the agency had no obligation to explain why it had decided not to do something which it was not required to do. As the solicitation did not commit the agency to consider the experience of an offeror’s affiliates, the agency’s decision not to do so did not depart from evaluation criteria, nor can it be said to have employed unstated evaluation criteria. The agency did not act arbitrarily, but rather rationally explained that plaintiff was not involved in the projects which were cited for the latter's experience and past performance.
Best practices in dealing with this issue include submission of focused and clearly articulated requests for clarification during the pre-award bid process that specifically address past affiliate performance, in order to determine if the Government can muster a clear rationale for any exclusion. If the solicitation lacks a clear rationale on its face, and if the Government then fails to offer a reasonable basis for its position regarding the role of past affiliate performance in the evaluation criteria, contractors may assess and utilize this information in considering whether to file a pre-award protest.
If the Government lacks a reasonable basis for excluding past affiliate performance, and if it is apparent that the Government can benefit through an affiliate(s)’ meaningful participation in the performance of the contract, contractors should be able to draw upon past affiliate performance. A difference in approach across agencies makes assessing this issue and formulating a pre-award strategy, including development of incisive questions to the agency, more important than ever.