Past Performance for First-Time Federal Bidders
How FAR treats past performance when you have no federal wins yet, what you can submit instead, and how to position commercial work.
Many small businesses freeze when a set-aside solicitation says past performance will be evaluated. If you have never held a federal prime contract, it is easy to assume you cannot compete. That is not what the Federal Acquisition Regulation says. The rules require agencies to evaluate past performance on most negotiated competitive buys above the simplified acquisition threshold, but they also require a fair approach for offerors who have no relevant federal history, and they let you submit commercial, state and local work that is similar to the requirement. This article explains how that works in practice, what to put in your proposal volume, and how to choose which set-asides to chase first while you are still building a federal track record.
Why past performance shows up on almost every serious solicitation
Under FAR 15.304, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold, unless the contracting officer documents why it is not an appropriate factor for that buy. The same section requires that price or cost be evaluated in every source selection (with a narrow exception for certain multiple-award contracts at DoD, NASA and the Coast Guard), and that quality be addressed through one or more non-cost factors such as past performance, technical excellence, management capability, personnel qualifications or prior experience. In plain terms, once a requirement is large enough to go through a negotiated competition, the agency is usually looking at both what you propose to do and whether you have done similar work well before.
That does not mean every set-aside is a past-performance shootout. Source selection sits on what FAR 15.101 calls the best value continuum. When the requirement is clearly defined and performance risk is low, price can dominate. When the work is less definitive or riskier, technical and past performance considerations can matter more. On many small business set-asides you will still see past performance listed as a factor or subfactor, so you need a plan for it even if your firm has never billed the federal government.
Lowest price technically acceptable (LPTA) competitions are a special case. Under FAR 15.101-2, if the contracting officer documents the file under 15.304(c)(3)(iii), past performance need not be an evaluation factor at all. If the agency does include it under LPTA, proposals are judged for acceptability rather than ranked against each other on that factor, and a small business whose past performance is found unacceptable must be referred to the Small Business Administration for a Certificate of Competency determination. For a new bidder, LPTA notices that omit past performance, or that treat it only as a pass-fail check you can meet with commercial references, are often easier first targets than tradeoff competitions that heavily weight federal CPARS ratings.
The rule that protects offerors with no federal history
The single most important sentence for a first-time bidder is in FAR 15.305(a)(2)(iv): in the case of an offeror without a record of relevant past performance, or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance. Agencies often implement this with a neutral rating. Neutral is not a strength, and it is not a weakness. It means the past-performance factor does not help you beat a firm with strong, relevant ratings, and it also does not knock you out for lacking those ratings.
The solicitation must tell you how that will work. FAR 15.305(a)(2)(ii) requires the solicitation to describe the approach for evaluating past performance, including how the agency will evaluate offerors with no relevant performance history. It also requires the agency to give offerors a chance to identify past or current contracts, including federal, state and local government and private contracts, for efforts similar to the requirement. You are allowed to describe problems you encountered on those contracts and the corrective actions you took, and the government must consider that information along with anything it gathers from other sources. The source selection authority decides how relevant your examples are.
There is a second layer that matters for award eligibility, not just for scoring. Under FAR 9.104-1(c), a prospective contractor must have a satisfactory performance record to be found responsible, but a firm shall not be determined responsible or nonresponsible solely on the basis of a lack of relevant performance history (except in limited situations described in 9.104-2). Responsibility is a separate determination from the comparative past-performance evaluation in Part 15. Lack of history alone is not supposed to make you nonresponsible.
What counts as relevant when you have never won a federal prime
Relevance drives almost everything. FAR 15.305(a)(2)(i) tells agencies to consider the currency and relevance of the information, the source, the context and general trends in the contractor's performance. A five-year-old commercial job that matches the statement of work closely will usually help more than a recent federal subcontract that has almost nothing in common with the requirement. Similarity in scope, complexity, dollar value, customer type and period of performance is what evaluators look for.
FAR 15.305(a)(2)(iii) widens the aperture further. The evaluation should take into account past performance information regarding predecessor companies, key personnel who have relevant experience, or subcontractors that will perform major or critical aspects of the requirement when that information is relevant. If your company is new but your project manager ran the same kind of work at another firm for years, the solicitation may allow you to present that individual's record. If a critical portion of the work will be performed by an experienced subcontractor, you may be able to include that firm's past performance for the portion it will handle. Always follow the solicitation's instructions on whose past performance counts and how joint ventures or teaming partners are treated. FAR 15.305(a)(2)(vi) adds that for joint ventures, the agency evaluates the joint venture's past performance and, if the joint venture itself has none, considers each party's past performance.
Commercial and state work is fair game when the solicitation says so, which Part 15 expects it to. A landscaping company that has maintained corporate campuses under multi-year private contracts can describe those efforts when bidding a grounds-maintenance set-aside. An IT help-desk firm with long-running state agency tickets can cite those contracts on a federal desktop-support solicitation. Label the customer, period, dollar value, what you delivered and how you measured quality. Provide a reference who will actually answer the phone. Hypothetical example: if your firm completed a $180,000 warehouse lighting retrofit for a regional distributor last year, and the SAM.gov notice you are reading asks for similar electrical construction under a total small business set-aside, that commercial project is the kind of similar private contract FAR 15.305 contemplates, not a stand-in for inventing a federal award you do not have.
How to build a past-performance volume that evaluators can use
Start by reading Section M (or the evaluation section) and the past-performance instructions in Section L before you write a word. Our field-by-field walkthrough, How to Read a SAM.gov Contract Notice, Line by Line, explains where those sections usually appear and why the evaluation method matters more than the title. Copy the number of references the agency wants, the page limits, the recency window and any required questionnaire format. If the notice says award may be made without discussions, remember that under FAR 15.306 clarifications are limited; you may get a chance to clarify the relevance of past performance or respond to adverse information you have not seen before, but you should not count on fixing a thin volume after submission.
Pick your strongest similar efforts first, not your largest or most prestigious ones. For each one, write a short narrative that maps the work to the solicitation's requirements: what you did, for whom, when, at what approximate value, what went wrong and how you fixed it, and what results you can document. Attach or offer to provide CPARS or PPIRS printouts when you have them. When you do not, use the agency's past-performance questionnaire or a signed customer letter that answers the same questions the solicitation asks. Name a reference with a current email and phone number, and warn that person that an evaluator may call.
If you truly have no relevant history as a company, say so clearly and lean on what the solicitation allows for key personnel and subcontractors. Do not pad with unrelated work; relevance beats volume. Do not claim federal past performance you do not have. False statements in proposals create eligibility and integrity problems that are far worse than a neutral past-performance rating.
Choosing set-asides while you still have a thin record
A neutral rating is survivable when the rest of your proposal is strong and price is competitive, but it will not beat a competitor with excellent, highly relevant federal ratings on a tradeoff where past performance is significantly more important than price. Early on, favor opportunities where past performance is pass-fail, lightly weighted, or documented as not applicable under LPTA. Favor requirements that match work you already perform in the commercial or state market, so your private references look relevant instead of stretched. Favor notices where you can team with a firm that brings complementary past performance for a major portion of the work, if the solicitation allows that structure.
Registration and eligibility still come first. You need an active SAM.gov entity registration and a Unique Entity ID before you can be awarded, and you need to meet the size standard for the NAICS code assigned to the notice. Our SAM.gov registration step-by-step guide covers the registration path, and how to find set-aside contracts on SAM.gov shows how to filter Contract Opportunities by set-aside type. Browse current listings on our set-aside opportunities pages, and use How to Find and Win Your First Federal Set-Aside Contract for the broader first-bid sequence from eligibility through proposal.
SBA's own contracting basics page also emphasizes that agencies prefer established, reliable businesses and that building a federal track record takes time and cash flow from other customers while you pursue the first wins. That advice fits with the FAR framework above: you are not barred for lacking federal CPARS, but you still have to prove you can perform through relevant commercial or other governmental work, capable people and a clear technical approach. See SBA's get started with contracting guide for the registration, size and readiness checklist from the small business side.
What to do after you win (or lose) the first one
Your first federal award becomes the seed of the record that later solicitations will pull from CPARS and related systems. Perform on time, document quality, communicate problems early and ask the contracting officer's representative how interim ratings will be handled. When you lose, request a debriefing when one is available under FAR 15.505 or 15.506 so you can learn whether past performance, technical approach or price drove the decision. That feedback is how you decide whether to keep chasing similar tradeoff set-asides or to focus on LPTA and commercial-item buys until your references catch up.
Past performance is a hurdle, not a locked gate. The regulation requires agencies to evaluate it on most negotiated competitions above the simplified acquisition threshold, requires them to explain how they will treat firms with no relevant history, forbids a favorable or unfavorable past-performance rating when that history is missing, and lets you bring private and non-federal government work to the table when it is similar. Read the evaluation factors on every notice, build a volume around relevance rather than prestige, and pick early set-asides where a neutral rating will not decide the award by itself. That is how first-time federal bidders turn commercial experience into a competitive proposal instead of sitting out opportunities they are otherwise ready to perform.
The Set-Aside Desk is published by SetAside Signal, an independent publication, not a government agency. This article isn't legal advice; rules change, so confirm details at sba.gov, sam.gov and acquisition.gov. Published Oct 16, 2026.