Building Past Performance as a New Federal Contractor

"We require past performance on comparable federal contracts." It is one of the most frustrating sentences a new contractor reads in a federal RFP. You cannot win federal contracts without past performance. And you cannot get past performance without winning contracts. The circular logic appears impenetrable.

It is not. Every federal contractor who is now winning millions in contracts started with zero past performance history. There are specific, proven strategies for breaking the cycle.

This guide covers seven concrete paths to building the credible past performance record you need to compete for federal contracts.

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Why Past Performance Matters So Much

In a federal source selection, past performance tells the government: has this contractor done similar work at this quality level before?

Under FAR 15.305(a)(2), contracting officers must evaluate past performance — how well you performed on prior contracts — as a standard evaluation factor in negotiated procurements. The evaluation considers:

• Relevance: How similar was your prior work to this requirement? (size, scope, complexity)
• Quality: What did your customers rate you? (CPARS ratings, client references)
• Currency: How recent is the work? (generally, the past 3 years count; 5 years for some evaluations)

A contractor with no relevant past performance is rated "Neutral/Unknown" — which is neither advantageous nor immediately disqualifying in competitive evaluations. The issue is that it is almost always worse than a competitor who has "Acceptable" or "Excellent" ratings.

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Strategy 1: Subcontract First

The fastest path to federal past performance is as a subcontractor.

Prime contractors with large federal contracts are required (under their subcontracting plans) to use small businesses as subs. More importantly, prime contractors need qualified subs to execute work they do not have the capacity for.

By performing as a sub — actually doing the work, meeting the deliverable requirements, and earning a positive reference — you build:

• Documented experience on a federal program
• A reference (your prime contractor's program manager)
• Project narrative for your past performance section

How to find subcontracting opportunities:

• Register in Dynamic Small Business Search (DSBS) at sam.gov — primes search here for subs
• Monitor SubNet (SBA's subcontracting opportunities board) at sba.gov
• Identify large prime contractors with federal contracts in your capability area on USASpending.gov and contact their small business liaison officers
• Attend matchmaking events hosted by PTAC (Procurement Technical Assistance Centers), SBA, and agencies

When evaluating past performance, many RFPs explicitly ask: "Include performance on subcontracts as well as prime contracts." Subcontract experience counts.

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Strategy 2: State and Local Government Contracts

State and local government contracts are not federal contracts, but they are recognized as "similar work" in many federal evaluations. A fire department IT support contract, a county facilities maintenance contract, or a state healthcare system integration project can serve as your reference.

What matters for federal past performance purposes:

• The work was similar in nature to the federal requirement
• The contract had defined deliverables and measurable performance standards
• You can provide a reference from the government customer
• The contract value was in a reasonable range relative to the federal opportunity

State and local experience does not count as favorably as direct federal past performance in strict evaluations. But it is far better than nothing, and many RFPs explicitly allow it.

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Strategy 3: Simplified Acquisitions and Micro-Purchases

Federal contracts under $250,000 (the Simplified Acquisition Threshold) are typically awarded with far less rigor than major procurements. The Contracting Officer has more flexibility, evaluation is less formal, and past performance requirements may be waived or minimized.

Under $25,000, the government can make micro-purchases from vendors without competitive bids, advertising, or formal past performance evaluation.

Your strategy:

• Focus your first 12–18 months on contracts under $150,000
• Use PTAC to identify local federal installations purchasing in your capability area
• Contact agency small business offices for upcoming simplified acquisition needs
• Deliver exceptional results; request a CPARS record or letter of commendation even if not required

Each small contract is a building block. A $50,000 IT support contract that earns you an "Exceptional" CPARS rating is more valuable than chasing a $5M contract you cannot win.

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Strategy 4: 8(a) Sole-Source Awards

If you are 8(a) certified, the government can award you a sole-source contract up to $4.5 million (services) or $7 million (manufacturing/construction) without competitive bidding. No past performance required — the 8(a) program is designed to help disadvantaged small businesses get their first federal contracts.

This is the single most powerful entry path for eligible firms. An 8(a) sole-source award gives you:

• A federal prime contract (not a subcontract)
• CPARS performance record
• Project description for future proposals

If your firm is eligible for 8(a) certification, pursue it immediately. The 9-year 8(a) program term is your window to build the past performance portfolio you need to compete beyond set-asides.

For the complete 8(a) guide, see our 8(a) Business Development Program Guide.

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Strategy 5: Federal Grants (For Research/Health/SBIR Firms)

If your business is in research, technology development, healthcare, or public health, federal grants (not contracts) build directly applicable experience.

SBIR/STTR Phase I and Phase II grants from NIH, DoE, DoD, or NASA demonstrate:

• Ability to perform federally funded technical work
• Meeting deliverable milestones
• Working within government-imposed constraints and reporting requirements

Many federal RFPs explicitly allow grant experience as past performance references. The government evaluator's question is "have you demonstrated the ability to perform comparable work for the government?" — a Phase II SBIR grant answers that question.

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Strategy 6: Commercial Contracts with Large Prime Contractors

If you have performed commercial work for major defense contractors or large commercial companies on programs that eventually became federal contracts, that experience may be cited as relevant past performance.

The key is framing: describe the work in terms of the scope, complexity, performance standards, and outcomes — not just "we supported Boeing on a commercial project." Show how the technical challenges, scale, and deliverable rigor are comparable to the federal requirement.

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Strategy 7: Qualify Your Key Personnel's Experience

When your company lacks past performance, key personnel past performance can substitute or supplement.

Many RFPs allow you to cite the experience of proposed key personnel — Program Manager, Technical Lead, COR relationship manager — even if that experience was at their prior employer.

Example: Your proposed Program Manager spent 10 years at a large contractor managing a $30M VA healthcare IT contract. That experience — cited with permission — is relevant past performance for evaluators even though your company itself has no federal history.

How to cite it:

• Identify proposed key personnel with relevant federal project experience
• Get written permission from the individual to use their prior experience
• In the Past Performance volume, present a brief project description for each key person's relevant prior project
• Note clearly that the experience was in their prior role, not as your company

This strategy is most effective when combined with a company commitment: "Our PM brings 10 years of directly relevant VA IT experience; we commit to deploying this expertise with the same rigor that earned Exceptional CPARS ratings on her prior programs."

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Responding to "Past Performance Not Found"

Some RFPs rate contractors with no relevant past performance as "Neutral" — which may be treated as equivalent to "Acceptable" for purposes of award, meaning lack of past performance alone does not disqualify you.

When you get a "Neutral" rating: Your proposal must be stronger in every other factor — particularly Technical Approach, Staffing Plan, and Price. Past performance "Neutral" is survivable; past performance "Neutral" combined with a weak technical volume is not.

In your Past Performance volume:

1. Present every potentially relevant project — government, commercial, state/local, grants, subawards
2. Frame each with relevance language: "This project is relevant because it required [skill X] at [scale Y] under [constraint Z] — directly comparable to this requirement"
3. Provide strong references who will respond promptly and positively
4. Acknowledge limited direct federal past performance directly and explain your plan to mitigate the risk

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Maintaining Past Performance Records

As you perform each contract:

• Request written client assessments, even on small contracts where CPARS is not required
• Keep project summaries with: contract number, period of performance, dollar value, scope, client, performance rating
• Photograph completed work, gather deliverable acceptance letters, save award fee notifications

Your past performance library grows with every contract. Build it systematically from your first award.

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Key Takeaways

• Subcontracting is the fastest path — perform as a sub on large federal contracts to build federally cited experience and references.
• Simplified acquisitions under $250,000 are the easiest entry point — minimal past performance requirements, less formal evaluation.
• 8(a) sole-source awards up to $4.5M–$7M bypass competitive past performance requirements — the most powerful entry tool for eligible firms.
• State/local and commercial contracts count as "similar experience" in many federal evaluations when the work scope is comparable.
• Key personnel past performance can substitute for company history when proposed leaders bring directly relevant federal project experience.
• "Neutral" ratings are survivable — but require superior technical and price proposals to overcome the relative disadvantage.

Identify federal contracting opportunities accessible to firms building their first past performance →