Past Performance: Agency Erroneously Gave Equal Weight to Less-Relevant Contracts

If you’re browsing online restaurant reviews, chances are you’ll give more weight to a column written by, say, the Washington Post’s Tom Sietsema than a screed by a Yelper who complains about the customer service at a restaurant that hasn’t opened yet or leaves a negative review after being caught shoplifting. As demonstrated in a recent GAO bid protest decision, the same principle holds true when it comes to an agency’s past performance evaluation: the agency must give greater weight to more-relevant contracts.

The GAO’s decision in Vertex Aerospace, LLC, B-421835, B-421835.2, B-421835.3 (2023) involved an Army solicitation for logistics support services for the government-owned fixed-wing program office fleets performing transport aircraft missions. The solicitation contemplated the award of a hybrid fixed-price/cost reimbursement contract and established a “best value” evaluation methodology in which the agency would evaluate five factors, including past performance.

With respect to the past performance factor, the solicitation directed offerors to submit up to five of their most recent contracts for the proposed prime contractor and each major subcontractor. In its past performance evaluation, the agency was to consider the “recency, relevancy, and quality” of the submitted past performance contracts. The solicitation also permitted the agency to seek and evaluate past performance evaluations other than those submitted by the offeror—such as CPARS evaluations.

The solicitation called for the agency to assign one of five confidence ratings to each offeror’s past performance. The highest potential confidence rating was “substantial confidence,” followed by “satisfactory confidence,” “neutral confidence,” “limited confidence,” and “no confidence.”

The agency received five timely proposals, including proposals from Vertex Aerospace, LLC and Amentum Services, Inc. In its evaluation of Vertex’s past performance, the Army first evaluated the four contracts Vertex submitted with its proposal. The Army excluded one of those contracts because it did not meet the solicitation’s recency standard. The agency then conducted a search using Vertex’s CAGE code and identified a fourth contract that met the solicitation’s evaluation criteria. The Army concluded that two of the four contracts were “relevant” and the other two “somewhat relevant.”

Of these four contracts, the agency found that Vertex received twenty-nine ratings of “exceptional,” fifteen ratings of “very good,” fourteen ratings of “satisfactory,” and two ratings of “marginal.” Both “marginal” ratings came from the contract the Army identified using the CAGE search, which was one of the two contracts deemed “somewhat relevant.” However, the Army did not mention the contract's relevance in its final evaluation report. Instead, the Army tallied the total number of ratings across all four contracts and assigned Vertex a “satisfactory confidence” rating. The Army explained that the “satisfactory confidence” rating was assigned—instead of “substantial confidence” because of the two marginal scores.

After completing its evaluation, the Army announced that the contract would be awarded to Amentum, which proposed an overall higher cost/price than Vertex, but also received higher scores under two factors. One of these factors was past performance, in which Amentum was rated “substantial confidence.”

Vertex filed a bid protest with the GAO challenging several aspects of the Army’s evaluation. Among its challenges, Vertex asserted that it was improper for the Army to “blend” performance ratings; that is, Vertex argued that the Army should have given lesser weight to the past performance ratings associated with the two less-relevant contracts—including the contract in which Vertex received the two “marginal” scores.

The GAO agreed with Vertex. Citing a prior bid protest decision, the GAO wrote:

[O]ur Office will sustain a challenge to a past performance evaluation where the record demonstrates that the agency’s methodology gave equal weight in the calculation of offerors’ past performance ratings where the agency had evaluated the underlying past performance examples to have differing degrees of relevance.

The GAO continued:

Here, although the agency argues that there was no blending of the ratings, the record fails to show that the agency weighed the ratings differently between relevant contracts and somewhat relevant contracts; it instead appears that the agency simply catalogued the number of ratings to arrive at the overall confidence rating. Tallying the ratings without distinguishing the relevancy of the contracts was unreasonable because it elevated low CPARS ratings on less relevant contracts and diminished higher CPARS ratings on more relevant contracts. In effect, the agency equalized every rating, regardless of the relevancy of the contract.

The GAO sustained this ground of Vertex’s protest.

It doesn’t make sense to give much weight to a restaurant review complaining of discovering “an entire LEAF” in one’s food when the offending item in question is a bay leaf. As the Vertex Aerospace decision demonstrates, the same logic holds true when it comes to past performance: the agency must give greater weight to more relevant projects.

Logic may save agencies from falling into this trap too often—but as GAO’s caselaw demonstrates, the Vertex Aerospace case isn’t the first time an agency has “equalized” relevant and less-relevant past performance. Therefore, the decision is a good reminder to agencies that acquisition personnel should receive training on this issue.

For contractors, Vertex Aerospace does, of course, provide a potential avenue for protest if an unsuccessful offeror finds itself in a similar position. But contractors also can consider applying the decision more proactively.

For example, a contractor with less-than-stellar ratings on a less-relevant contract might consider using the proposal as an opportunity to demonstrate the irrelevance or low relevance of the contract. A contractor might even gently suggest that to the extent the contract is considered, it must be given lower weight in the agency’s evaluation.

Of course, this sort of proactive approach must be considered on a case-by-case basis: Vertex didn’t submit the contract with the “marginal” scores and presumably hoped that the Army wouldn’t use that contract in its evaluation. But in a case where a contractor believes the agency is certain, or very likely, to consider a less-relevant contract with lower past performance scores, proactively addressing the issue is an option that could be on the table.

Finally, and speaking of the weight given past performance scores, the Vertex Aerospace case is a reminder of the importance agencies sometimes place on negative ratings. In this case, Vertex had 60 overall past performance ratings. Forty-four of those ratings, or about 73.3%, were above satisfactory. Only two of the ratings, or about 3.3%, were below satisfactory. Nevertheless, the Army reduced Vertex’s confidence rating to merely “satisfactory” based on the two “marginal” scores.

The agency, of course, dropped the ball by assigning improper weight to Vertex’s less-relevant contracts. But had all four contracts been equally relevant, those two “marginal” ratings, comprising just 3.3% of Vertex’s past performance scores—a lower percentage than the number of Americans who believe chocolate milk comes from brown cows—likely would have been decisive. With examples like this, it’s little wonder that some contractors will bend over backwards to avoid or negate even a single adverse past performance rating, including sometimes by taking legal action.

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Boring but important disclaimer: The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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