October 20, 2019

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GAO Decision Illustrates Breadth of Agency Discretion in Past Performance Evaluations

In the recent bid protest decision of Halbert Construction Company Inc., the Government Accountability Office (GAO) illustrated the breadth of a procuring agency’s discretion in conducting a past performance evaluation.  Halbert Construction brought the protest after being excluded from the competitive range, arguing primarily that the Navy unreasonably included a non-relevant prior project in the past performance evaluation which led to Halbert Construction’s exclusion.  The GAO sustained the protest based on the well- established principle that offerors must be treated equally because the Navy excluded another offeror’s past performance reference from the evaluation as not relevant under the solicitation’s relevancy criteria but then failed to do the same for the protestor.

More notable than the relatively straight-forward application of the disparate treatment principle was the decision’s discussion of the very broad discretion of agencies in past performance evaluations.  In this competition for design-build services at multiple Navy installations, the protestor argued that the prior project was not relevant for a number of reasoning, including that the project did not include design-build work and instead “involved a specialized type of construction work that is distinctly different from the commercial and institutional work contemplated by the solicitation.”  In rejecting this argument, the GAO found persuasive that both the prior project and the current competition was under the same North American Industry Classification System (NAICS) code for Commercial and Institutional Building Construction.  This point merits attention because certain NAICS codes may be interpreted broadly and some projects may be improperly categorized for NAICS purposes.  Consequently, offerors may need to be mindful of NAICS codes in considering what prior projects may be evaluated for past performance.

The GAO also rejected another argument that the prior project was not relevant because it was an uncompleted project, even though the solicitation specifically stated that a project needed to be “100% complete” to be considered relevant.  The GAO acknowledged the solicitation language but agreed with the Navy that the relevancy criterion in this solicitation “applied only to information submitted by the offeror.”  The GAO pointed to solicitation language apprising offerors that the Navy could consider information outside of the past performance references submitted by the offerors themselves.  Although this analysis amounts to the GAO-equivalent of dictum, it signals a willingness by the GAO to permit agencies to consider as relevant even those past performances references that clearly fall outside of the solicitation’s stated relevancy criteria.

© 2019 Covington & Burling LLP

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About this Author

Michael Scheininger, Covington Burling, Litigation Attorney
Senior Counsel

Michael Scheininger focuses on the defense of business crimes and civil fraud, especially procurement fraud civil false claims (qui tam) and criminal investigations. He regularly advises government contractors on mandatory disclosure.

Mr. Scheininger also focuses his practice on health care fraud. In addition, he represents individuals and entities in investigations alleging offenses in the areas of FCPA, National Security, Public Corruption, Securities (Criminal and Civil Fraud).

202-662-5350
Nooree Lee, Litigation attorney, Covington Burling, Law firm
Associate

Nooree Lee represents government contractors in a wide variety of litigation and counseling matters across the federal, state, and local government markets. Mr. Lee counsels clients on every legal aspect of government contracts. His primary areas of practice include pre-award and post-award bid protests, grants and cooperative agreements, and suspension and debarment proceedings. In addition, Mr. Lee represents contractors in matters relating to disclosure of confidential data under the Freedom of Information Act.

Mr. Lee also maintains an active pro bono practice focusing on security clearance applications.

202-662-5909