Yesterday, November 18, 2021, the U.S. Small Business Administration (SBA) issued a Proposed Rule that amends its regulations in order to provide small business government contractors with new methods to obtain past performance ratings that can be used with their offers on federal government contracts.
As amended by the Proposed Rule, the SBA’s regulations would permit a small business government contractor to elect to use the experience and past performance ratings of a joint venture of which it is a member (whether or not the other joint venture partners were small businesses) when the small business does not independently demonstrate past performance necessary for award, provided the small business performed work under the joint venture's contract or contracts.
When making the election, the small business must: (i) identify to the contracting officer the joint venture of which the small business is or was a member; (ii) identify the contract or contracts of the joint venture that the small business elects to use for its experience and past performance for the prime contract offer; and (iii) inform the contracting officer what duties and responsibilities the concern carried out or is carrying out as part of the joint venture. A contracting officer must consider a joint venture’s past performance if a small business chooses to make the election.
The SBA regulations, as amended by the Proposed Rule, would also permit small business government contractors to use past performance ratings for work performed as first-tier subcontractors on prime contracts with subcontracting plans. Relatedly, the Proposed Rule also amends small business subcontracting plan requirements by requiring prime contractors to report past performance to a first-tier, small business subcontractor when requested by the small business that was a first-tier subcontractor under a prime contract. Under the Proposed Rule, the prime contractor is required to provide the past performance rating within 15 days of the request, and the rating must include, at a minimum, the following evaluation factors: (a) Technical (quality of product or service); (b) Cost control (not applicable for firm-fixed-price or fixed-price with economic price adjustment arrangements); (c) Schedule/timeliness; (d) Management or business relations; and (e) Other (as applicable).
A small business member of a joint venture can also request a past performance rating from a prime contractor where the joint venture performed as a first-tier subcontractor for the prime contractor. The small business can then submit the performance rating to a procuring agency using the same procedures described above that apply when a small business submits a past performance rating for a joint venture.
When evaluating the past performance of a small business that elects to use a rating as a first-tier subcontractor for its offer on a prime contract, a contracting officer must consider the small business’ past performance rating that is within three years (six for construction and architect-engineering) of the completion of performance of the evaluated contract or order.
In the preamble to the Proposed Rule, the SBA also asked for comments on a number of issues including: (i) whether small business subcontractors have been negatively impacted in competing for prime contracts due to not having a past performance rating(s); (ii) whether to prescribe a time frame within which the subcontractor must make a request to the prime contractor for a rating; (iii) whether to recommend that a subcontractor submit its request for a rating within the period of performance of the prime contractor's contract; (iv) if there is a reasonable period of time after the physical completion of the prime contractor's contract in which the subcontractor should or must submit its request, what that time period might be and how to implement that time period into the prime contractor's contract; and (v) whether the SBA should recommend that the subcontractor negotiate with a prime contactor the procedures for submitting a request and the time frames.
Comments to the Proposed Rule must be received by January 18, 2022.