Federal Contract Past Performance Appraisals
Many companies every year set the goal to break into the lucrative federal market space. In this article we are going to review why the federal market space is difficult to break into and why SBA certifications such as the 8a certification are important to achieve this goal.
Problem: Past Performance
For new firms attempting to obtain government work competing for large government project is nearly impossible without one of the four SBA Certifications such as the 8a certification. This is because of how the government uses Past Performance as key criteria for awarding new contracts. Federal procurement officers will tell you that without a solid record of past performance it is unlikely that a firm’s proposal will make it to the final selection stage in the process. Our three part email series will go over how the Federal Process works and how building your government resume to make larger future awards possible.
Understanding the Current Process without an 8a or other SBA Certification
Prior to 1994 the Government relied heavily upon detailed technical and management proposal and contractor experience to compare the relative strengths and weaknesses of offers. This practice gave companies that could write outstanding proposals the edge over firms that provided outstanding performance on the job. The Federal Government looked to make changes providing a higher emphasis on past performance with the goal that these firms are more likely to meet future expectations. Many of these changes became possible due to the improvement of information technology that was occurring in the 1990s.
In 1994 the Federal Acquisitions Streamlining Act was approved requiring all Federal Departments and Agencies to initiate procedures to record contractor performance. The purpose of these evaluations is to make determinations regarding future contract awards or “source selections”. These past performance are instrumental in making a “best value” determination for government purchasing agents. This is because it gives federal agencies the ability to better predict the quality of future work provided by any given contractor and therefore the “degree of risk” associated with each competing offer on a contract bid. The Federal Acquisitions Streamlining Act required for all procurement actions exceeding $100,000 have a performance appraisal completed.
On July 1, 2009 FAR now requires all Federal Agencies to post all contractors performance evaluations on PPIRS (Past performance information retrieval system). It is now recommended that Past Performance count for at least 25% of the total evaluation or equal to all other non-cost evaluation factors combined.
How does my 8a certification or other SBA certification change this process?
Congress has set procurement targets for the various SBA Certifications see below:
Because the federal agencies are required to make every available effort to comply with these budgetary targets, small businesses with these certifications are given first contracting opportunity not available to other firms.
These certifications allow for the following two mechanisms to break into government contracting:
1. Set-aside contracts allow the procurement officer greater ease in contract award and provide for a way around the formalized bidding process making it more likely for the firm to be awarded a contract.
2. Joint Ventures give the SBA certified company the ability to use the other company’s capabilities and past performance to secure contracts. The joint venture firm is usually in need of the SBA certificate holder’s inclusion in the bid in order to be awarded the contract.
For these reasons an SBA certification can make all the difference to your firm. Give us a call at 513-843-4288 and we can help you determine if one of these certifications is right for your firm.