For most businesses interested in government contracting, the first contract is the hardest to earn. There are many factors that make it difficult to break into government contracting – wary buyers, lack of familiarity with terminology and practices – but a lack of prior experience and past performance seems like the most difficult obstacle to overcome. Federal agencies are encouraged to consider prior experience and past performance when evaluating whether to award a contract to a particular vendor and a recent GAO report indicates that most agencies are doing just that. The catch 22 is: If the government won’t award you a contract because you have no prior experience or past performance from previous contracts, how are you supposed to earn prior experience and past performance in order to win contracts?
Prior experience relates to whether you’ve done similar work in the past; past performance relates to how well you did that work. While you might assume that this experience is limited to federal contract experience, that isn’t necessarily true. The FAR gives agencies a lot of leeway in how and what type of experience they can consider. Generally, any work your company performs can be presented as prior experience and past performance, whether it was for a government buyer or the private sector. If you do not have any past work as a company, many buyers will even accept the prior experience and past performance of the principal(s) of the company. In fact, during their research the GAO was unable to find a single instance in which an agency only evaluated prior experience and past performance from past federal government contracts.
It can be problematic for new companies who have very little or no past experience to draw from. However, businesses with little or no past performance can still break into government contracting in other ways. Subcontracting and teaming are great ways for vendors to build up past performance while gaining experience and building a reputation with contracting officers. Small businesses may also be able to work with government agencies through smaller micro-purchases and simplified acquisitions. These generally do not need to go through the formal bidding process and are often not widely advertised, if they’re even advertised at all. Since smaller jobs carry a smaller risk, procurement specialists may be more willing to take a chance on a newer, smaller vendor. If a newer firm finds themselves completely shut out from government contracting due to a lack of past clients, performing work for the private sector can easily remedy this and generate some great references.