The approach you are contemplating is an "exclusionary" approach which is fine. Another approach would be a "quantitative" approach. For instance the evaluation range may be from poor/marginal/average/good/exceptional. You may rate the neutral as "average" which GAO has upheld. In other words there is not cookie cutter approach in how to treat neutral past performance.
In at least one COFC case the court actually preferred the "exclusionary" approact which they held as being the most pure method of handling no past performance as neither negative or positive. Here is a snippit from that case (Metcalf Construction Company, Inc., v. The United States and Lend Lease ACTUS (Intervenor), COFC No. 02-5C, September 24, 2002):
The plain meaning of the word neutral is: ?Not allied with, supporting, or favoring either side... Not one thing or the other: indifferent;?33 i.e., having no effect, null or zero. When a literal interpretation is given to the statute, and a zero (or null) value is applied to the neutral rating factor, the subject offeror?s overall rating suffers as compared to other bidders.34 In the case at bar, the offeror is partially spared from the harshest possible result because the neutral rating occurs in only one of two equally weighted subfactors, instead of a whole category or factor. Operating from the standpoint of strict adherence to the language of the statute, no value or a null value should be substituted in the past performance subfactor under Factor C as illustrated below:
According to the solicitation, the ratings in both subfactors, ?NR? and ?HA,? are ?equally weighted.? Therefore, the logical first-blush inclination would be to ?average? the two ratings to arrive at a single overall rating. Since these ratings are adjectival, rather than numerical, an exact (quantitative) value or rating cannot result. We are thereby faced with the confines of solving an equation of non-quantitative variables, which logically, we know, must yield a result that is lower than ?HA,? but for which the actual result is speculative. (If this were a numerical scheme, and HA = 3, and A = 2, the outcome would be 1.5, which is a rating lower than ?Acceptable?). This court, therefore, and in conjunction with the administrative cases cited above condemning the ?zeroing effect,? rejects the functionality (and fairness) of a null value application since said application has the effect of treating the offeror unfavorably.
While the court found no binding authority on this issue, we have looked to the numerous administrative decisions dealing with the applicable statute. There are a couple of variations in applying the statute which have been contrived in order to avoid the otherwise harsh outcome that results from a literal application of the statute (the zeroing effect). First, there is assigning a quantitative value to the neutral rating reflecting the mid-point of the applicable rating scale; e.g., ?good,? or ?satisfactory.?35 And, in the case of a numerical rating scheme, a number representing the mid-point of the applicable rating scale is assigned.36 Alternatively, there are other cases where the category with the ?NR? rating is totally eliminated for the affected bidder(s).37 We will look at each approach separately.
1. Quantitative Approach
This court is unpersuaded that the assignment of any value at all to a neutral rating operates within the meaning of the statute since ? ?the offeror may not be evaluated favorably or unfavorably on the factor of past performance.? Surely even a middle value may favor or disfavor an offeror. The defendant apparently applied this ?mid-point? theory, by treating the neutral rating as equivalent to the ?Acceptable? rating - - ?The Navy therefore, [sic] rated all offerors equally, consistently, and fairly, as each offeror receiving one ?highly acceptable? and one ?acceptable? (or ?neutral?) received an overall ?acceptable? rating.? Def. Motion at 26. The court rejects this approach as inconsistent with, and therefore violative of, the operative statute.
2. Exclusion Approach
Remaining, then, is the theory of totally eliminating the factor, or in this case, the subfactor, from the affected bidder?s evaluation. In Meridian Mgmt. Corp., past references questionnaires contained thirty-one (31) questions that were rated separately, then divided by 31 to arrive at an overall ?experience/past performance score.? The protester in that case argued that it was penalized when it received a ?0? for a question regarding laboratory work that was ?not applicable? in a prior contract. The agency involved in that solicitation agreed that the protester should not be penalized, and subsequently recalculated the protester?s score by dividing the total for the thirty (30) answered questions by 30, instead of 31. In doing so, the agency totally eliminated the question that was ?not applicable? to the protester from its overall ?experience/past performance score.?
The court finds that the approach taken in Meridian is the better approach, which neither (1) treats the bidder favorably nor unfavorably by unduly quantifying (as ?Acceptable?) the neutral rating, nor does it (2) lead to a speculative or unfavorable result (via averaging). Therefore, under the Meridian approach, subfactor 1 of Factor C, in the case at bar, is completely eliminated from Metcalf?s Factor C evaluation, since subfactor 1 is, in effect, ?not applicable? to Metcalf. Thus, Metcalf is to be evaluated purely on subfactor 2, which, in this case, becomes its overall rating for Factor C, to wit, ?HA.? This approach is consistent with the outcome derived by the TEB in its September 10, 2001 report. (App. A, page 3 of 4).