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Can an agency make award to an offeror with unsatisfactory past performance?


govt2310

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Has anyone ever seen a GAO or court decision upholding an agency's decision to make award to an offeror rated unsatisfactory (or "No Confidence") for past performance?  I know it sounds ridiculous, but some agencies put in their adjectival ratings scale/definitions that "unsatisfactory" makes the proposal unawardable, and others do not.  Well, in the scenario where the RFP did not state that "unsatisfactory" made a proposal unawardable, and if the agency chooses not to open discussions, can the agency, in its source selection decision trade-off narrative, still make award to that offeror?  I have never seen this done, but I'm thinking this question must have come up before at GAO or the courts.

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Sorry for the slightly off topic response but this hits upon one of my sensitive areas.  Why wouldn’t the agency do something other than accept an unsatisfactory rating without doing something?  I assume this is just the only source of information they have like from a CPARS report or a survey response.  Why not ask the agency giving the unsatisfactory response some information?  Why not seek additional information from other customers?  I don’t understand why COs aren’t more proactive is obtaining past performance information.  They have the latitude. Plus the CO can always ask the offeror to explain the rating unless that’s already occurred.

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2 hours ago, formerfed said:

Sorry for the slightly off topic response but this hits upon one of my sensitive areas.  Why wouldn’t the agency do something other than accept an unsatisfactory rating without doing something?  I assume this is just the only source of information they have like from a CPARS report or a survey response.  Why not ask the agency giving the unsatisfactory response some information?  Why not seek additional information from other customers?  I don’t understand why COs aren’t more proactive is obtaining past performance information.  They have the latitude. Plus the CO can always ask the offeror to explain the rating unless that’s already occurred.

formerfed, I interpreted the initial post above as a situation where the performance rating assigned to the instant proposal is unsatisfactory or no confidence but where the evaluation criteria doesn’t specifically state that such a rating would make a proposal unawardable.  

I think the KO would be insane to make award to such a firm without opening and conducting discussions. I won’t go into detail about what to discuss because we dont know what comparisons would be applicable to the circumstances. Suffice to say a KO would have to justify how such a proposal provides the “best value” in comparison with other offers and why it and other offers couldn’t be improved through discussions.

If the KO has no confidence that the firm will successfully complete the job then it doesn’t appear that the firm is a responsible prospective contractor, meeting the requirements of FAR 9.104-1 (c). 

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17 minutes ago, C Culham said:

Would you be willing to accept 9.104-3(b) as a reference as well?

Yep, it is referenced in 9.104-1 (c).

“(c) Have a satisfactory performance record (see 9.104-3(b) and subpart 42.15). ”

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8 hours ago, govt2310 said:

Has anyone ever seen a GAO or court decision upholding an agency's decision to make award to an offeror rated unsatisfactory (or "No Confidence") for past performance?... Well, in the scenario where the RFP did not state that "unsatisfactory" made a proposal unawardable, and if the agency chooses not to open discussions, can the agency, in its source selection decision trade-off narrative, still make award to that offeror? 

I haven't "seen" it, but see Mine Safety Appliances Company, B-266025, January 17, 1996:

Quote

An affirmative determination of responsibility in the light of unfavorable information on the prior performance history of a bidder, in some instances, may reflect on a contracting officer's business judgment, but is not itself evidence of bad faith per se. Gayston Corp.—Recon., B–223090.2, July 25, 1986, 86–2 CPD ¶ 115. While a contracting officer must consider deficiencies in past performance when making a responsibility determination, FAR § 9.104–1(c), recent unsatisfactory performance does not automatically require a nonresponsibility determination. Jay Fran Corp., B–217145, Jan. 2, 1985, 85–1 CPD ¶ 8. Performance history is but one of several factors the contracting officer should take into account when considering a prospective contractor's responsibility. FAR § 9.104–1; Turbine Engine Servs.—Recon., 64 Comp. Gen. 639 (1985), 85–1 CPD ¶ 721. In each case, the contracting officer must make a business judgment as to whether the prior unsatisfactory performance indicates such problems will also be encountered during performance of the contract to be awarded. Fujinon, Inc., B–221815, Jan. 30, 1986, 86–1 CPD ¶ 112; Pan Am Aero, supra; Jay Fran Corp., supra. In this regard, the presumption of nonresponsibility in cases where a prospective awardee has recently been “seriously deficient” in contract performance may be rebutted where the contracting officer finds that corrective action has been taken. FAR § 9.104–3(c); see Clyde G. Steagall, Inc. d/b/a Mid Valley Elec., B–237184 et al., Jan. 10, 1990, 90–1 CPD ¶ 43; Fujinon, Inc., supra.

Emphasis added.

I assume that similar reasoning would apply with respect to the evaluation of past performance in a competitive negotiated acquisition. I can see an offeror being awarded a contract despite poor past performance when it has shown persuasively that it has taken effective corrective action.

Much would depend on how the agency described the past performance factor in its RFP and how it would be evaluated.

In short, poor past performance is not necessarily fatal.

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9 hours ago, govt2310 said:

Well, in the scenario where the RFP did not state that "unsatisfactory" made a proposal unawardable, and if the agency chooses not to open discussions, can the agency, in its source selection decision trade-off narrative, still make award to that offeror? 

 

1 hour ago, Vern Edwards said:

I can see an offeror being awarded a contract despite poor past performance when it has shown persuasively that it has taken effective corrective action.

Much would depend on how the agency described the past performance factor in its RFP and how it would be evaluated.

9 hours ago, govt2310 said:

to an offeror rated unsatisfactory (or "No Confidence") for past performance?

In the described scenario, the agency (the evaluators? The KO and the evaluators? The KO?) “rated” the firm’s past performance as “unsatisfactory or no confidence”.

I think that it would be necessary to conduct discussions with the proposer to allow the proposer the opportunity to persuasively show the KO that it has taken corrective action, to be consistent with Mine Safety Appliances Company, B-266025, GAO Decision and in compliance with the referenced paragraphs in FAR 9.104. 

That would seem to me to be a big problem with the scenario described in the original post. 

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These are all good points.  I can understand why there is no GAO decision with the fact pattern I proposed.  The agency's action must be reasonable, and it would be extremely difficult to show that an offeror with "unsatisfactory" Past Performance was somehow the "best value." 

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Of course, if the agency decides to conduct discussions with that firm, then it should include other firms that may have the potential to improve their technical and/or price proposals.

May further complicate the best value trade-off decision, if one isn’t using another selection criteria method (e.g., LPTA).  

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1.  The contracting officer (or other official appointed as SSA) is not bound by the evaluation outcomes found by the evaluators.  Those outcomes are advisory to the contracting officer.  Maybe the contracting officer does not agree that the past performance is unacceptable?

2.  Joel, you have repeatedly suggested opening discussions for past performance in this thread -- if discussions are open for some other reason, one could certainly include past performance -- but you seem to be talking about opening discussions just for this reason.  The definition of clarifications encompasses exchanges related to relevance of past performance and adverse past performance to which the offeror has not had an opportunity to respond, for example, so I wouldn't jump to discussions without first seeing if my concerns could be dealt with using clarifications. 

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8 hours ago, govt2310 said:

The agency's action must be reasonable, and it would be extremely difficult to show that an offeror with "unsatisfactory" Past Performance was somehow the "best value." 

Emphasis added.

It might seem strange to some, but don't generalize too broadly.

For one thing, "unsatisfactory past performance" may be nothing more than a statement about the past that has no bearing on the offeror's present condition in light of corrective action.

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1 hour ago, ji20874 said:

The definition of clarifications encompasses exchanges related to relevance of past performance and adverse past performance to which the offeror has not had an opportunity to respond, for example, so I wouldn't jump to discussions without first seeing if my concerns could be dealt with using clarifications. 

I don’t necessarily disagree, depending upon the circumstances. However, if the rating is based upon recorded PP ratings, the contractor has supposedly had the opportunity to respond. And the proposer should know the weaknesses of its rating record. If so, it may have had the opportunity to clarify what corrective actions it has taken as part of its proposal submission.

Of course, if the KO or someone else is already aware of corrective actions taken to improve performance, that might be usable in the SSA/KO reasoning. 

If the purpose or result of clarifications is the opportunity for a proposer to revise/improve its proposal or become eligible for an award, those are more than clarifications, in my opinion (unless the KO is already aware of the corrective actions).

In addition, it also depends upon what were the results of the other firms’ evaluations, pricing and likelihood of being able to improve their chances for award. There are a lot of variables to be considered. 
 

Sorry for the multiple edits. Vern posted while I was writing.

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