Contractors frequently form joint ventures to respond to federal contracts solicitations that require the submission of past performance information. Since joint ventures are entities separate from their member firms, created in many instances to pursue specific federal opportunities, they may not have the necessary past performance history. As a result, joint ventures often rely upon the past performance history of their individual member firms. Meanwhile, procuring agencies are generally permitted to consider the past performance history of individual member firms during evaluation. This is true even when the solicitation expressly limits the use of past performance information to contracts performed as a prime contractor. When responding to such solicitations, joint ventures may utilize the past performance history of their individual member firms, as long as the member firm was a prime contractor on the referenced contract, and the past performance information is reasonably predictive of the quality of the joint venture’s future performance under the contract being awarded. Similarly, if reasonably predictive of performance, joint ventures may use the past performance history of their individual members, even when those members earned it as members of a different joint venture. Contractors should be mindful that while joint ventures can usually submit the past performance history of their member firms, an exception to this general rule is if the solicitation contains an express provision prohibiting the use of such past performance information.
In B-410352.5, a bid protest decision issued on July 1, 2015, the Government Accountability Office (GAO) determined that the agency properly attributed to a joint venture, the past performance of its lead member firm, even when the member firm had earned the past performance as a member of a different joint venture. The Task Order Request (TOR) for information technology (IT) services was issued to support the Defense Acquisition University (DAU). The TOR required offerors to submit three past performance references from the past three years where the offeror had served as the prime contractor. The past performance references would be evaluated for relevance and quality. Notably, the TOR did not expressly advise offerors that past performance history of individual joint venture partners would not be considered. The joint venture that was awarded the TOR submitted three past performance references, two of which were earned by the lead joint venture member firm as a member of another joint venture. The protester challenged the past performance evaluation, alleging that it was improper for the agency to consider the two past performance references.
In rendering its decision, the GAO first noted that it only examined a procuring agency’s evaluation of an offeror’s past performance to ensure that it was reasonable and consistent with the stated evaluation criteria and applicable statutes and regulations, since determining the relative merit or relevance of a past performance was primarily a matter within the agency’s discretion. Next, the GAO noted that the TOR at issue did not expressly prohibit the agency from considering the relevant past performance history of an individual joint venture partner in evaluating the joint venture’s past performance. Additionally, here it was reasonable for the agency to consider the past performance of the lead joint venture member because it was slated to perform major or critical aspects of the work. Under these circumstances, it was determined that an agency could properly consider the performance history of an individual joint venture partner earned as a member of another joint venture when the past performance was, as in this case, reasonably predictive of the quality of future performance on the contract being awarded. Consequently, the GAO denied the protest.
Unless an express solicitation provision states otherwise, joint ventures are permitted to utilize the past performance history of their member firms when pursuing federal contracts. In the absence of an express limitation provision, joint ventures can utilize the performance history of their member firms even when the solicitation only permits the use of past performance information and references earned as a prime contractor. Furthermore, as described in the above case, a joint venture may also use the past performance history of an individual partner earned as a member of another joint venture. The primary consideration for joint ventures in utilizing the past performance history of their member firms is whether the information is reasonably predictive of the joint venture’s performance under the contract. Stated another way, the procuring agency is required to determine whether the past performance information is a reasonable indicator of the joint venture’s future performance on the contract being awarded. If so, and provided the solicitation does not prohibit it, the government is permitted to attribute the past performance history of member firms to the joint venture when conducting past performance evaluations.
This Federal Procurement Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.