Background check

From the August 2022 print edition

While public purchasing institutions typically want to ensure that a bidder has the required experience to perform a contract, the evaluation of past experience is a litigation hotspot that has triggered multiple successful bid protests over the years. The following article summarizes the governing principles that apply to the evaluation of past experience.

The case law has established the following legal principles for the assessment of past experience in public sector bid evaluations:

  1. Duty to reject: Purchasing institutions have the right and duty to reject bidders who fail to meet mandatory past experience requirements.
  2. Strict interpretation: While adjudicators may defer to government evaluators on a reasonableness standard when dealing with factual matters, past experience criteria will be subject to strict legal interpretation in a bid protest based on the wording in the solicitation document.
  3. Ambiguity attracts remedies: Ambiguous past experience criteria can undermine the legal defensibility of an evaluation and award decision. A bid protest may result in a re-evaluation order, an order requiring redrafting and reissuing a solicitation document, or the voiding of a contract award made based on a flawed evaluation. In some jurisdictions, flawed evaluations can also attract lost profit awards for prejudiced bidders.
  4. Clear process rules: The solicitation document should clearly define the process rules for confirming the adequacy of past experience. Post-bid rectifications to deal with missing past experience information should only be allowed where the solicitation rules specifically permit those practices.
  5. Procedures for self-references: Purchasing institutions should avoid past experience requirements that call for them to provide references to their own past suppliers unless they have adopted formal protocols to manage these procedures and their internal procedures are prompt enough to meet the necessary bid deadlines.
  6. No arbitrariness: Evaluation teams cannot be arbitrary in assessing past experience. While their evaluation decisions will typically be reviewed in a legal challenge on a reasonableness standard rather than a correctness standard, even the reasonableness standard of review calls for rational, transparent, and logical evaluations.
  7. Consistency: The past experience scoring criteria and rules need to be applied in a manner consistent with the solicitation document. Evaluators should be consistent in scoring proponent past experience and in dealing with concerns of prior performance issues.
  8. Records: Evaluators should maintain complete contemporaneous records of their evaluations.
  9. Restrictive requirements: Purchasing institutions should avoid unnecessarily restrictive past experience criteria and should be prepared to defend their past experience standards as legitimate operational requirements.
  10. Firm and individual experience: Purchasing institutions should carefully define whether the past experience pertains to corporate or firm-level experience or to the experience of individuals on the proponent’s proposed project team. For example, past rulings have held that individual experience as an employee does not constitute contractor experience for a firm and that employee experience from prior employers does not count as firm experience for the new employer.
  11. Third-party experience: Relying on third-party past experience has proven contentious, particularly where the solicitation rules are silent on this issue. Purchasing institutions should carefully define whether proponent past experience assessments will consider the experience of predecessor entities, parent companies, subsidiaries, affiliates, subcontractors, or other third parties.
  12. Define past projects: When assessing past experience, the meaning of a past project is not self-evident and should therefore be described in the solicitation.
  13. Define minimum standards: When purchasing institutions set a minimum past experience requirement, they must strictly enforce that standard; close is not good enough. For example, 69 months of experience is insufficient when the solicitation calls for a minimum of 72 months. Minimum standards should therefore be carefully defined to avoid unnecessarily disqualifying bidders with sufficient experience.
  14. Avoid compliance traps: Scoring past experience on a mandatory compliance pass-fail basis has proven to be impractical and has attracted a disproportionate amount of bid protests. Purchasing institutions should therefore score past experience with detailed criteria and sub-criteria and apply a minimum passing score, rather than assessing past experience as a mandatory requirement based on ambiguous pass-fail compliance standards.
  15. Avoid ambiguous criteria: When evaluating past experience, purchasing institutions should avoid using ambiguous criteria, hidden sub-criteria, or non-transparent scoring methods.
  16. Avoid anecdotal evidence: Evaluators should not rely on their independent knowledge of an incumbent proponent to give that bidder the benefit of the doubt since this can create an unfair advantage.

As these case law principles illustrate, to better ensure the defensibility of their evaluation and award decisions, public purchasing institutions should exercise a high degree of precision in drafting and applying past experience requirements in their bid evaluations.

Paul Emanuelli is the general counsel of The Procurement Office and can be reached at [email protected]