Building Past Performance as a New Government Contractor: The Complete Strategy

This circular problem has frustrated new entrants for decades. The federal government spent $755 billion on contracts in the most recent fiscal year, and agencies are understandably risk-averse. They want evidence that you can deliver.

But the paradox is solvable. Thousands of companies have broken into government contracting from zero. This guide explains exactly how they did it, starting with the strategies that work fastest and building toward the approaches that create long-term competitive advantage.

What Is Past Performance and Why Does It Matter?

Past performance is the documented record of how well your company has delivered on previous contracts. In government contracting, it serves as the primary evidence that you can deliver on the contract being proposed.

The FAR (Part 15) requires that past performance be considered as an evaluation factor in most negotiated procurements. Contracting Officers evaluate it because it is one of the best predictors of future performance. A company with a track record of delivering on time, on budget, and at the required quality level is more likely to deliver again.

Past performance evaluation typically considers:

• Relevance: How similar is the past work to the current requirement (scope, complexity, dollar value)?
• Quality: Were deliverables produced to the required standard?
• Schedule: Was work completed on time?
• Cost control: Was the work completed within budget?
• Business relations: Was the contractor responsive, proactive, and easy to work with?
• Subcontracting compliance: Did the contractor meet small business subcontracting goals?

The standard ratings used in CPARS (the Contractor Performance Assessment Reporting System) are:

For most procurements, you need to demonstrate at least "Satisfactory" ratings. Contracts with "Exceptional" or "Very Good" ratings become valuable assets that strengthen every future proposal.

Understanding What "Relevant" Past Performance Means

Not all past performance is created equal. Evaluators want to see past work that is relevant to the current requirement. Understanding what "relevant" means helps you prioritize which contracts to pursue first.

Relevance is evaluated along three dimensions:

1. Technical Scope

The work should involve the same or similar types of services or products. If you are bidding on a cybersecurity assessment contract, past performance on network security, vulnerability assessments, or penetration testing is highly relevant. Past performance on general IT support is moderately relevant. Past performance on landscaping is not relevant.

2. Complexity

Larger, more complex contracts value past performance on similarly complex work. A $5 million contract may not serve as relevant past performance for a $50 million requirement. But when you are starting out, even small contracts in the same technical area can serve as relevant experience.

3. Dollar Value

Many solicitations specify that past performance should be of "similar dollar value" or "at least X% of the current contract value." If the requirement is a $10 million contract, a $500,000 past project might be rated as "somewhat relevant" while a $8 million project would be "very relevant."

Building a Staircase of Relevance

The strategic approach for new contractors is to think of past performance as a staircase. You start with small contracts and build toward larger ones, deliberately pursuing contracts that expand your documented experience in ways that set up the next step.

Year 1-2: Win small contracts ($50K-$500K) in your target area
Year 2-4: Use those as past performance to win mid-size contracts ($500K-$5M)
Year 4-7: Use those to compete for large contracts ($5M-$50M)
Year 7+: Compete for enterprise-scale contracts ($50M+)

The staircase takes time, but every rung you climb makes the next one more accessible.

Strategy 1: Subcontracting - The Fastest Path to Federal Past Performance

Becoming a subcontractor on an existing federal contract is the fastest, lowest-risk way to build government past performance. You work under a prime contractor who holds the contract and takes on the regulatory burden, while you deliver a portion of the work.

Why Subcontracting Works

• Immediate market access: You start generating federal experience within weeks, not months
• Risk reduction: The prime holds the contract and manages the government relationship
• Learning environment: You learn how federal contracts work from the inside
• Past performance accumulates: Every successfully completed subcontract becomes documentation you can use in future proposals
• Relationship building: Working alongside a prime introduces you to agency personnel

How Subcontracting Builds Past Performance

Past performance from subcontracting is slightly different from prime past performance, but it counts. Here is how to maximize its value:

1. Request a subcontractor performance reference. When a subcontract is complete, ask the prime contractor to write a formal letter of reference describing your performance. This should include the contract number, the scope of your work, the dollar value of your subcontract, and an assessment of your performance.

1. Document your work thoroughly. Keep records of deliverables, timelines, and any commendations from the prime or the government customer.

1. Request access to CPARS data. Prime contractors sometimes receive CPARS ratings that partially reflect subcontractor performance. If you made a significant contribution, ask the prime to document your role in their CPARS response.

1. Ask for Past Performance Questionnaire (PPQ) responses. When you submit proposals as a prime, include your subcontract experience and provide PPQs to the relevant primes to complete on your behalf.

How to Find Subcontracting Opportunities

Finding the right subcontracting opportunities requires research. Here are the most effective approaches:

Search large prime contractor profiles in SAM.gov. Large businesses with contracts over $750,000 are required to maintain small business subcontracting plans. These plans identify the categories of subcontracting they intend to pursue.

Monitor the Subcontracting Opportunities Directory. GSA maintains a directory of prime contractors actively seeking subcontractors. Large primes are often legally required to give small businesses opportunities to bid on subcontracts.

Use the SBA's SUB-Net system. SUB-Net is a database where large prime contractors post subcontracting opportunities. Register and set up alerts for your NAICS codes.

Attend agency and prime contractor small business events. The Office of Small and Disadvantaged Business Utilization (OSDBU) at each major agency regularly holds matchmaking events where small businesses meet prime contractors. These events are explicitly designed to create subcontracting relationships.

Research contracts nearing recompete. When a large contract is coming up for recompete, the prime is often looking to strengthen their team with specialists. This creates subcontracting opportunities and the chance to build a longer-term relationship with a prime.

Bidovate's competitive intelligence tools can help you identify prime contractors active in your target agencies and NAICS codes, making your partner search faster and more systematic.

Strategy 2: Micro-Purchases - Win Your First Contracts Fast

Every federal agency can make purchases under $10,000 without any competition using a government purchase card. These micro-purchases are the fastest way to win your first government contracts.

The Micro-Purchase Advantage for New Contractors

• No past performance required: Agencies can and do buy from companies with no prior federal experience
• No formal competition: The agency can select you directly
• Fast awards: Purchases can happen in days, not months
• Low barrier: No CPARS rating, no complex proposals, often just a quote

How Agencies Find Micro-Purchase Vendors

Agencies find micro-purchase vendors through:

• SAM.gov searches (your profile must be current and complete)
• Word of mouth from other agencies and contracting officers
• GSA Advantage! and GSA eBuy (if you have a Schedule contract)
• Agency-specific vendor directories
• Industry events and networking

To position yourself for micro-purchases:

1. Complete your SAM.gov profile thoroughly. Include a detailed capabilities narrative, all relevant NAICS codes, and current contact information.
2. Create a strong capability statement. A one-page document summarizing your services, differentiators, and past experience (commercial or academic) that you can quickly share with contracting officers.
3. Target the agencies most likely to buy what you sell. Research which agencies have the highest micro-purchase volume in your product or service category.
4. Contact small business offices proactively. Every federal agency has an OSDBU. Introduce yourself, share your capability statement, and ask how to get on their radar for micro-purchase opportunities.

Documenting Micro-Purchase Past Performance

Even micro-purchases generate past performance documentation. When a micro-purchase contract is complete:

• Request a reference from the Contracting Officer or purchase card holder
• Document the contract details: agency, scope, dollar value, performance period, outcomes
• Ask for written confirmation of satisfactory performance

These references may seem small, but they establish your federal past performance record and make the next contract easier to win.

Strategy 3: Simplified Acquisition Opportunities ($10,000-$250,000)

Between the micro-purchase threshold ($10,000) and the Simplified Acquisition Threshold ($250,000), contracts are automatically set aside for small businesses. This range represents enormous opportunity for new contractors.

Why This Range Is Ideal for New Contractors

• Automatic small business set-aside: Large businesses cannot compete
• Simplified competition: Fewer competitors, simpler evaluation process
• Faster awards: Less paperwork and regulatory burden
• Still meaningful past performance: These contracts are large enough to be cited as relevant experience for future proposals

Types of Simplified Acquisition Contracts to Target

Purchase Orders: Short-duration contracts for specific deliverables. Clean and simple, deliver the product or service, get paid.

Blanket Purchase Agreements (BPAs): Established with multiple vendors so agencies can place fast orders without a new competition each time. Getting on a BPA gives you a steady stream of order opportunities.

Simplified Acquisition Set-Asides: When an agency has a requirement in the $10,000-$250,000 range, it must consider setting it aside for small businesses first. These solicitations appear on SAM.gov and are often overlooked by larger competitors.

Small Business Set-Asides under IDIQs: Many large IDIQ contracts have task orders in the simplified acquisition range that are set aside for small businesses. If you are a subcontractor on the IDIQ, you may be able to compete for these task orders.

Finding These Opportunities

• Monitor SAM.gov daily using your NAICS codes and target agencies
• Set up automatic alerts on SAM.gov for new postings
• Use Bidovate's opportunity discovery platform to monitor SAM.gov plus hundreds of additional portals automatically
• Watch for Sources Sought notices (market research) that often precede simplified acquisition solicitations

Strategy 4: The 8(a) Business Development Program

For eligible small businesses, the 8(a) program is one of the most powerful past performance accelerators available. It allows sole-source awards up to $4.5 million for services and $7 million for manufacturing without any competition.

Who Qualifies for 8(a)

The SBA's 8(a) Business Development Program is open to:

• Businesses owned and controlled (at least 51%) by socially and economically disadvantaged individuals
• Common qualifying groups include African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans
• Others may qualify on a case-by-case basis with individual social disadvantage documentation
• Economic disadvantage is assessed based on net worth and income thresholds

How 8(a) Builds Past Performance

8(a) is transformative for past performance building because:

• Sole-source awards let you win contracts that would otherwise be competed, and those contracts become your past performance
• Sole-source dollar thresholds ($4.5M for services) are large enough to be cited as relevant experience for major contracts
• 9-year program duration gives you time to grow your capabilities and reference pool
• Mentor-protege relationships can further accelerate growth (more on this below)
• Competitive 8(a) set-asides above the sole-source threshold let you compete with fewer bidders

If your company qualifies, apply for 8(a) as soon as possible. The program has capacity constraints and an 8-10 year window, so starting earlier maximizes your benefit period.

The 8(a) Application Process

1. Verify eligibility at sba.gov/8a
2. Submit an application through the SBA's Certify portal (certify.sba.gov)
3. Provide documentation of social disadvantage, economic disadvantage, business ownership, and control
4. Wait for SBA review (typically 90 days)
5. Once approved, register your 8(a) status in SAM.gov and market to agency small business offices

Strategy 5: Other Small Business Certifications

Beyond 8(a), several other certifications can help you compete for set-aside contracts and build past performance faster.

HUBZone Certification

The Historically Underutilized Business Zone (HUBZone) program applies to businesses located in economically distressed communities. Benefits include:

• 10% price evaluation preference in full-and-open competitions
• Set-aside contracts reserved for HUBZone businesses
• Sole-source awards up to $4.5 million for services

To qualify, the business must be located in a HUBZone and at least 35% of its employees must live in a HUBZone. Use SBA's HUBZone map to check eligibility.

SDVOSB and VOSB

Service-Disabled Veteran-Owned Small Businesses and Veteran-Owned Small Businesses have their own set-aside programs, primarily in VA contracting but expanding government-wide.

• SDVOSB set-asides: Business must be 51%+ owned by service-disabled veterans
• Sole-source awards: Up to $4.5 million for services, $7 million for manufacturing
• VA has its own verification process through the CVE (Center for Verification and Evaluation)

WOSB and EDWOSB

Women-Owned and Economically Disadvantaged Women-Owned Small Businesses have set-aside programs in specific NAICS codes where women-owned businesses are "substantially underrepresented."

• WOSB: Business must be 51%+ owned by women who also manage daily operations
• Certification is required (through SBA or an approved third-party certifier)

Stacking Certifications

Many businesses qualify for multiple certifications simultaneously. For example, a business owned by a Native American woman veteran could qualify for 8(a), SDVOSB, and WOSB. Each certification opens additional contracting opportunities, accelerating past performance development.

Strategy 6: Commercial Experience as a Bridge

Many agencies accept commercial past performance when a company has no federal contract history. Commercial experience is not as strong as federal past performance, but it can get you in the door.

What Counts as Commercial Past Performance

• Contracts with commercial companies for services similar to what the government is buying
• Work for state and local governments
• Work for nonprofit organizations
• Academic research or grants
• Work as a named subcontractor on commercial projects

How to Present Commercial Past Performance

When citing commercial past performance in a government proposal:

• Provide the same level of detail as you would for federal performance (client name, scope, dollar value, duration, outcomes)
• Obtain references who can speak to your quality, schedule, and responsiveness
• Emphasize how the work is relevant to the government requirement
• Acknowledge it is commercial experience but explain why it demonstrates equivalent capability

Some Requests for Proposals explicitly allow or even encourage commercial past performance for new entrants. Read the evaluation criteria carefully, if the solicitation says "federal or commercial" past performance is acceptable, you have a legitimate path to compete.

Volunteer and Pro Bono Work

Some organizations, nonprofits, schools, community groups, need services similar to what the government buys. Offering to do this work at a reduced rate or pro bono in exchange for a formal reference letter can help you build a record of relevant performance.

This is particularly relevant for IT, professional services, and training companies. Helping a nonprofit modernize their IT infrastructure, for example, demonstrates exactly the capabilities relevant to small federal IT contracts.

Strategy 7: Grant Performance

Many federal agencies award grants for research, education, and community development. If your company has received and successfully performed on federal grants, that experience can serve as past performance for certain types of contracts.

Grant performance is most relevant for:

• Research and development (R&D) contracts at DoD, HHS, and DOE
• Training and education services
• Community development and social services

NIH, NSF, DoD research programs (SBIR/STTR), and similar agencies regularly consider grant performance when evaluating contractors for related work.

The SBIR/STTR Path for Technical Companies

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are designed specifically for innovative technology companies pursuing federal research contracts. These programs set aside over $3 billion annually for small businesses.

Phase Structure

Why SBIR/STTR Builds Excellent Past Performance

• Phase I awards are effectively sole-source contracts that require no prior federal experience
• Each phase successfully completed becomes strong past performance
• Phase II awards ($2M) are substantial enough to be cited for many future competitions
• Technical innovation demonstrated through SBIR/STTR is highly relevant for R&D-adjacent contracts

Getting Started with SBIR/STTR

1. Identify relevant programs: Each participating agency publishes solicitations (called "Solicitations" or "Omnibus" solicitations). Search at sbir.gov.
2. Understand the topic: Each SBIR topic describes a specific technical problem the agency wants solved
3. Submit a Phase I proposal: Phase I proposals are shorter than most government RFPs but technically demanding
4. Win and perform well: Delivering exceptional Phase I results dramatically increases your Phase II win probability

SBIR/STTR is not quick money, the research takes real time. But for technology companies, it is one of the most legitimate and effective paths to building government-relevant past performance.

Documenting and Presenting Your Past Performance

Past performance is only valuable if you capture and present it effectively. Here is how to build a past performance management system.

The Past Performance Record

For every contract you complete, federal, commercial, or grant, create a standard record that includes:

• Contract/project title
• Client organization (agency, company, nonprofit)
• Contract number (if federal)
• Period of performance (start and end dates)
• Dollar value (total and your portion, if a subcontract)
• Scope of work (detailed description)
• Key deliverables and outcomes
• Performance rating (CPARS rating if federal; reference assessment if commercial)
• Point of contact (name, phone, email, keep this current)

Store this in a central system that every proposal team member can access. Update it whenever you add a new contract.

The Capability Statement

Your capability statement is a one-page (or two-page) marketing document that summarizes your company's capabilities, differentiators, and relevant experience. It should include:

• Company overview (2-3 sentences)
• Core competencies (3-5 bullet points)
• Past performance highlights (3-5 examples, most relevant first)
• NAICS codes
• Certifications (8(a), SDVOSB, WOSB, etc.)
• Contact information

Update your capability statement quarterly to reflect new wins and capabilities.

Past Performance Questionnaires (PPQs)

When you submit a proposal, the solicitation often asks for references who will complete a PPQ, a structured form evaluating your performance. Build a practice of:

1. Asking every satisfied client (federal and commercial) to be a reference
2. Keeping reference contact information current
3. Briefing references before you submit their contact information in a proposal
4. Following up after award to ask for their honest feedback

Strong PPQ responses from satisfied clients can overcome a thin past performance record.

CPARS: Managing Your Federal Reputation

For federal contracts over $150,000, the government evaluates your performance annually in CPARS. These ratings are accessible to all contracting officers government-wide through the Past Performance Information Retrieval System (PPIRS).

To manage your CPARS ratings:

1. Know when your ratings are due. CPARS evaluations happen annually and at contract completion. Contracting officers notify you when a rating is submitted.

1. Request a draft before it is finalized. You have the right to see your rating and provide comments before it is finalized in the system.

1. Respond to negative assessments. If you receive a "Marginal" or "Unsatisfactory" rating, provide a formal written response explaining your perspective. Your response becomes part of your permanent record.

1. Address performance issues proactively. If you are struggling on a contract, communicate early with the Contracting Officer. Issues addressed proactively are less likely to result in negative ratings.

1. Track your CPARS history. You can review your own CPARS ratings by logging into FAPIIS (Federal Awardee Performance and Integrity Information System) at ppirs.gov.

Mentor-Protege Relationships as a Past Performance Accelerator

The SBA's All Small Mentor-Protege Program can dramatically accelerate your past performance development by pairing you with an experienced larger company.

Under this program, you can form a joint venture with your mentor and bid on contracts that the JV wins as a small business. Each contract the JV wins and performs well becomes past performance that both companies can cite.

The key benefits for the protege's past performance:

• Access to larger contracts: JV proposals are more competitive because they combine your small business status with the mentor's resources and experience
• Technical mentoring: The mentor helps you build capabilities for more complex work
• Reference sharing: Your mentor's past performance may be cited alongside yours in JV proposals
• Agency relationships: The mentor's established relationships help the JV navigate agency requirements

For more on mentor-protege and other teaming structures, see our complete guide to teaming agreements.

How Much Past Performance Do You Need?

A common question from new contractors is: "How many past performance examples do I need to compete?"

The answer depends on the solicitation. Most RFPs ask for 3-5 past performance references. For small business set-asides under $1 million, even 1-2 strong references can be sufficient if they are highly relevant.

The quality and relevance of past performance matters more than the quantity. One exceptional CPARS rating on a directly relevant $2 million contract is stronger than five mediocre references on unrelated work.

As a rough guide:

Using Bidovate to Build Past Performance Faster

Bidovate supports new contractors who are building their first federal past performance in several ways:

• Opportunity discovery: Bidovate monitors SAM.gov, FPDS, USAspending, and 1,000+ additional portals to surface micro-purchases, simplified acquisitions, and small business set-asides filtered by your NAICS codes. The earlier you find opportunities, the more time you have to prepare competitive proposals.

• Subcontract partner identification: Bidovate's competitive intelligence tools help you identify prime contractors active in your target agencies who may be seeking subcontractors. Research their contract history, size, and specialization to find the best fit.

• Recompete tracking: Bidovate identifies contracts approaching expiration so you can begin capture well before the solicitation is released. As a new contractor, early tracking gives you the lead time to build relationships and develop a competitive proposal.

• SBIR/STTR monitoring: Bidovate tracks SBIR solicitations across participating agencies, alerting you to Phase I opportunities in your technical area.

Book a demo to see how Bidovate can help you accelerate your past performance development.

Common Mistakes to Avoid

Pursuing contracts that are too large

New contractors often aim too high too early. A $50 million contract will eliminate you in evaluation if you have $500,000 in past performance. Start where you can win, then grow.

Ignoring commercial past performance

Many new contractors wait for their first federal win before submitting any proposals. Do not wait. Document and present commercial, state, and local past performance while you are building your federal record.

Poor CPARS management

Missing a CPARS evaluation, not reviewing draft ratings, or failing to respond to negative assessments can permanently damage your reputation in the federal market. Take CPARS seriously from your first federal contract.

Not keeping references current

Reference contact information changes. Contracting officers move on. If a proposal requires a PPQ from a reference who is no longer reachable, you lose that past performance example. Update your reference list quarterly.

Treating every small contract as a stepping stone to neglect

Some contractors win small contracts as "building blocks" but then invest minimal effort in performing well. This is a mistake. Every contract you win is an opportunity to earn an exceptional CPARS rating that will strengthen proposals for years. Deliver exceptional performance on every contract, regardless of size.

Frequently Asked Questions

How long does federal past performance stay relevant?

Most solicitations consider past performance from the past 3-5 years as "recent." Some agencies extend this to 10 years for relevant experience. Work performed more than 10 years ago is typically not considered unless it is extraordinarily relevant and there is no more recent alternative. When building your past performance portfolio, prioritize current contracts and recent completions.

Can I use past performance from my previous employer?

No. Past performance belongs to the entity that held the contract, the company, not the individual. If you worked for a company that held a government contract, that is the company's past performance, not yours. However, you can list your role in that work as part of your key personnel qualifications. Some solicitations ask for the experience of key individuals, which can include your work history at previous employers.

What if I have no past performance at all?

Some solicitations accept proposals from companies with no past performance, rating it as "neutral" rather than negative. This is more common for small business set-asides where the government understands that new entrants have to start somewhere. When evaluators rate "neutral" past performance, they typically consider the risk of that neutral rating against the strength of the technical approach, pricing, and key personnel. A strong technical proposal with competitive pricing can win even with neutral past performance on some procurements.

Can past performance be transferred in an acquisition?

When a company is acquired, past performance generally transfers if the acquiring company can demonstrate successor interest. You must show that the same key personnel, management, and capabilities are in place. If a company was acquired but the team that performed the original work has been retained and is working under the successor organization, that past performance record can be cited. Document the succession carefully, especially if the company name has changed.

Past performance is the foundation of a successful government contracting business. For related reading, explore our guide to government contracts for small business and the complete guide to teaming agreements and joint ventures.