Relevant experience and past performance are key
ingredients in the evaluation of proposals. In this world of constant mergers,
acquisitions (asset purchases and stock purchases) and related novations of
government contracts, the question is often exactly what
experience can and should be counted by an agency when it evaluates
proposals? The answer is not always clear. Take for example, two relatively
recent protests decided by the General Accountability Office (GAO) within a year
of one another with wildly differing results: Sevatec, Inc., B-406784
(Comp. Gen. Aug. 23, 2012) and Harbor Services, Inc., B-408325
(Comp. Gen. Aug. 23, 2013).
Sevatec protested the Defense Agency’s failure to
credit it with the experience accumulated by the incumbent, NDC. Prior to the
evaluation under protest, NDC, pursuant to a novation agreement approved by the
Agency, had transferred its current contract to Sevatec. The novation
agreement, however, did not discuss the transfer of any NDC assets or employees
to Sevatec, and Sevatec did not propose to use NDC as part of its team.
Sevatec received a marginal rating under the
experience factor. According to Sevatec, it was entitled to credit for “NDC’s
experience given that Sevatec assumed all rights and responsibilities for NDC’s
contract under the novation agreement” and, following execution of the novation
agreement, had hired many of NDCs employees. GAO did not agree.
GAO found that Sevatec did not contend it had the
relevant experience but instead argued that under the terms of the novation
agreement the Agency was required to credit Sevatec for NDC’s experienced. This
is an understandable flaw. Surprisingly, GAO went on to hold that “having the
incumbent personnel from the NDC contract does not allow [Sevatec] to claim
NDC’s experience because the RFP did not provide for consideration of personnel
experience … [r]ather the Solicitation stated the agency would evaluate the
experience of the offeror.”
One year to the day later GAO seemed to do an
about-face.
Harbor protested the award of a VA contract to
MedPro based on the Agency’s alleged misevaluation of MedPro’s experience.
MedPro’s proposal cited to the experience of another company – IPW. According
to MedPro, it was in the process of transitioning from IPW: that is, key
personnel and assets of IPW, the predecessor firm, were being transferred to
MedPro, in part via a novation agreement. According to GAO, this provided
“continuity of operations between the two firms” and made “IPW’s experience
relevant to predicting MedPro’s successful performance of the contract.” In
Harbor, GAO clearly states that under such circumstances “an agency
properly may consider the relevant experience and past performance of key
individuals and predecessor companies.”
Two novations with opposite results. Why?
First, Sevatec made the mistake of entering into a very narrow novation
agreement covering only the transfer of the current contract. Second,
Sevatec’s proposal did not contain and explain its relevant experience. And
third, Sevatec was unlucky in drawing an agency and a GAO
decision-maker that did not credit the offeror with the experience and past
performance of its proposed key personnel.
The take away: Don’t view novation agreements as
simple administrative forms. They can be important opportunities to explain, to
your lasting benefit, the nature and scope of a transaction. And, in every
proposal explain, in detail, exactly how and why the assets, personnel,
experience, and past performance of a predecessor entity are yours to claim.
Lindsay
Simmons is the attorney responsible for the content of this article.
© Jackson Kelly PLLC 2013