You cannot get a government contract without past performance, and you cannot get past performance without a government contract. That sentence describes almost every new contractor's situation, and there are six real ways out of it.
> TL;DR: The Federal Acquisition Regulation says agencies must treat zero past performance as "neutral," not negative. That's your legal foundation. On top of it: subcontract under a prime to build a documented record, team with an established prime who brings the past performance you lack, start with micro-purchases and simplified acquisition contracts where requirements are lighter, use state and local contracts as evidence (federal agencies can accept non-federal work), and apply to the SBA Mentor-Protégé Program so your mentor's performance can support your joint venture proposals.
The legal rule agencies rarely explain to you
Before anything else, know this: FAR 15.305(a)(2)(iv) requires that when a contractor has no relevant past performance history, the evaluation must treat that absence as "neutral." Not bad. Not disqualifying. Neutral, meaning the contractor is not evaluated favorably or unfavorably on that factor.
This rule is structural, not aspirational. Contracting officers are required to follow it on negotiated acquisitions, and it is supposed to prevent an agency from rejecting a new entrant simply for being new. In practice, neutral competes against Very Good and Exceptional. You are not penalized for having nothing, but you are not advantaged either. The goal is to get you from neutral to something real as quickly as possible.
That is what the following six paths do.
Path 1: Subcontract under a prime contractor
Subcontracting is the cleanest first step. A large prime that holds a federal contract pays you to do part of the work. You gain documented experience on a real federal project without having to win a prime award yourself.
This path has structural support baked in. Under FAR 52.219-9, when a contract over $700,000 (or $1.5 million for construction of a public facility) is awarded to a large business, that company is required to submit a subcontracting plan with percentage goals for small and diverse firms: small businesses, small disadvantaged businesses, women-owned, HUBZone, veteran-owned, and service-disabled veteran-owned. Primes that miss their goals or cannot show good-faith effort to hit them put future awards at risk. They are actively looking for qualified subcontractors. You are solving a compliance problem they already have.
After you deliver, two things happen. First, you can reference the subcontract as past performance in future proposals. FAR 15.305(a)(2)(ii) says agencies must consider past performance "on contracts and subcontracts," including relevant work on contracts from other agencies and state and local governments. Your sub experience counts. Second, you can ask the prime's program manager for a reference letter while the work is fresh. That letter, combined with your own delivery records (dates, deliverables, dollar value of your portion), is the foundation of your past performance write-up on your first prime proposal.
If you hold an 8(a), WOSB, EDWOSB, SDVOSB, or HUBZone certification, you count toward multiple goal lines in the prime's plan, which makes you a more attractive sub than your size alone would suggest.
Use our subcontract finder tool to identify prime contractors currently active in your NAICS codes and agencies. A more detailed walkthrough of how to find and approach primes is in how to become a subcontractor on a government contract.
Path 2: Team with an established prime
Teaming is structurally different from subcontracting. In a teaming arrangement, two companies form a partnership before a solicitation closes and bid together as the prime. The established partner brings the past performance record. You bring a specific technical capability, a certification, a geographic presence, or some other component the lead firm cannot easily replicate on its own.
Teaming works when the prime needs something you have and would not easily find elsewhere. A large IT integrator targeting an SDVOSB set-aside cannot bid without a service-disabled veteran-owned partner. A construction firm bidding a green-energy project may need a specialized environmental testing firm. Your value in the team is specific.
The teaming agreement itself should spell out the scope each party performs, the work split, how disputes are handled, and the period of the arrangement. This is not the place for a handshake deal. If the prime wins, the teaming agreement governs what you actually do.
One important distinction: a teaming arrangement is not a joint venture. A joint venture is a separate legal entity formed by two parties to bid and perform a contract together. Teaming is a contractual commitment between two separate companies. Both paths exist, and the right one depends on the procurement and the relationship. Teaming requires less setup. A joint venture under the SBA Mentor-Protégé Program offers larger structural benefits (covered in Path 5 below). For a side-by-side explanation of both, see the teaming agreement vs. joint venture guide.
Path 3: Start with micro-purchases and simplified acquisition contracts
Not every federal contract requires a formal past performance evaluation. The government buys a large volume of goods and services at thresholds where those requirements are lighter or absent.
| Threshold | FAR Authority | Past Performance Requirement |
|---|---|---|
| Up to $10,000 (micro-purchase) | FAR 13.201 | None. No competition required; CO buys directly from any source. |
| $10,001–$250,000 (simplified acquisition) | FAR 13.003 | Generally simplified; past performance often not a formal evaluation factor. |
| Above $250,000 (full and open / competitive) | FAR Part 15 | Past performance typically a formal evaluation factor; FAR 15.305 applies. |
The micro-purchase threshold is $10,000 as of October 1, 2022 (FAR 2.101). Contracting officers can buy directly from any vendor without competition or a formal solicitation. Government purchase card holders make these buys constantly: office supplies, low-cost services, equipment under the threshold.
The simplified acquisition threshold is $250,000. At this level, the agency uses streamlined procedures. Solicitations are shorter, evaluation criteria are fewer, and past performance is not always a formal evaluation element. When it is, evaluators typically weight it less heavily than they would on a million-dollar contract.
This is where new contractors should look first. A single micro-purchase that you deliver cleanly is documented federal experience. Do three or four of them across different agencies, and you have a real past performance section to write.
The agencies most open to first-time contractors at these thresholds tend to be civilian agencies with high transaction volume: General Services Administration (GSA), Department of Veterans Affairs (VA), and the Department of Agriculture. The VA is consistently one of the most active users of small and veteran-owned businesses and has a high volume of simplified acquisitions.
Path 4: Use state and local contracts as a track record
Federal agencies are explicitly permitted to accept past performance from state and local contracts. FAR 15.305(a)(2)(ii) says past performance information includes work on contracts "with State and local Governments."
This means a state IT contract, a county facilities maintenance contract, a city utility project, or a public university procurement can all serve as past performance evidence in a federal proposal. If you have been doing public-sector work at any level of government, you are not starting from zero.
Present state and local experience the same way you would present federal past performance: contract number or reference identifier, the contracting entity, the period of performance, your dollar value of work, the scope, and a point of contact the evaluator can call. The evaluator is trying to assess whether you can deliver in a government context. A well-performed state contract answers that question directly.
For businesses that do exclusively commercial work, commercial past performance also counts under FAR 15.305(a)(2)(ii), though evaluators may weight it differently depending on how closely the work resembles the federal requirement. The guidance says evaluators "should take into account the type and complexity of the work being performed." Complex commercial work that closely mirrors federal requirements carries real weight.
Path 5: SBA Mentor-Protégé Program
The SBA Mentor-Protégé Program was consolidated in November 2020 into one program open to any small business (formerly there were two separate programs, the 8(a) version and the All Small version). Any small business that qualifies can apply.
The relevant piece for past performance: when a mentor and protégé form a joint venture under an approved agreement, 13 CFR 125.8(e) allows the joint venture to rely on the mentor's past performance record in proposals. The protégé's own absence of past performance becomes far less limiting when the JV brings the mentor's record into the proposal.
This is meaningful because many set-aside contracts require substantial past performance on work of similar size and complexity, at a scale a new contractor cannot demonstrate on its own. A JV with an experienced mentor can credibly bid work that neither party would win alone.
The tradeoff: getting approved takes time. You apply through SBA's certify.sba.gov portal, and approvals can take months. This is not a path to your first contract next quarter. It is a structural investment that opens up larger work once the relationship is in place.
Two eligibility points that matter: you need to already qualify as small under your primary NAICS code, and the mentor you select must have a genuine developmental relationship to offer (technical training, financial assistance, management guidance, or similar help). SBA reviews both. The program is covered in detail in the SBA Mentor-Protégé Program and joint ventures in 2026.
Path 6: Apply the "no past performance = neutral" rule strategically
Most new contractors give up when they see a past performance requirement and assume they cannot compete. The FAR says otherwise.
FAR 15.305(a)(2)(iv) is direct: "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." The evaluation language the agency uses in a solicitation may say the same thing under the heading "Rating: Neutral / Unknown."
What this means tactically: if you are bidding against established contractors, a neutral past performance rating puts you at a disadvantage but not out of the running. You compete on price, technical approach, and your management plan. The combination of a competitive price and a strong technical proposal can beat a higher-priced competitor with a merely Satisfactory past performance record.
New contractors often win their first agency contracts on exactly this logic. The evaluators want the work done at a fair price, and if you can demonstrate you understand the requirement and have a credible plan to deliver it, the neutral past performance becomes a manageable gap rather than a disqualifying factor.
The contracts where this works best are simplified acquisitions, small agency buys, and first-run task orders on new indefinite-delivery vehicles where the agency is building a bench. Avoid bidding as your first target a high-visibility, high-risk, large-dollar contract where the agency is trying to minimize risk at every turn.
Which agencies are most first-contractor-friendly
Not all agencies are equally accessible to new contractors. Based on award patterns at the simplified acquisition threshold and OSDBU responsiveness, these agencies consistently rank among the most accessible entry points:
- Department of Veterans Affairs (VA). The VA's Office of Small and Disadvantaged Business Utilization runs Vendor Information Pages and regular matchmaking events. The VA is legally required to give priority to verified veteran-owned and service-disabled veteran-owned businesses through the Veterans First Contracting Program (38 USC 8127-8128). If you hold an SDVOSB or VOSB certification verified through the SBA's Veterans Certification Program, the VA is your highest-priority first target.
- General Services Administration (GSA). GSA runs MAS (Multiple Award Schedule), a vehicle that allows agencies to buy without running a full competition. Getting on a GSA Schedule takes time (typically 4-6 months), but once you are on, agencies can buy from you directly at simplified acquisition procedures. Past performance requirements for an initial Schedule award are more limited than for a major competitive contract.
- Small Business Administration (SBA) itself. SBA buys services including IT, professional services, and training, and explicitly prefers small businesses. It is also the agency that runs the programs described above, and its OSDBU staff are among the most small-business-focused in the government.
- Department of Agriculture (USDA). High transaction volume across many program offices. USDA has a well-documented history of awarding simplified acquisitions to first-time contractors.
- State Departments of Transportation (DOTs). For construction, engineering, and professional services firms, state DOTs are often the best entry point. State contracts count as past performance for federal purposes, and transportation construction is one of the highest-volume state and local procurement categories.
Comparison: six paths by speed, effort, and access
| Path | Time to First Documented Experience | Effort to Start | Best For |
|---|---|---|---|
| Subcontracting | 1-3 months to land a sub role | Medium — requires outreach to primes | Any new contractor; amplified by certifications |
| Teaming | 1-6 months depending on bid timing | Medium — requires a willing prime partner | Contractors with a specific unique capability |
| Micro-purchases and simplified acquisitions | Weeks once on vendor lists | Low — no formal past performance needed to compete | Service and product vendors in high-volume categories |
| State and local contracts | Already done if you have prior public-sector work | Low — just document it properly | Contractors with existing public-sector track records |
| SBA Mentor-Protégé Program | 6-18 months including approval | High — requires an approved relationship | Contractors planning to bid larger set-aside work |
| "Neutral" first prime bids | Immediate — requires only a bid | Low to medium — depends on technical proposal quality | Price-competitive firms pursuing simplified acquisitions |
Frequently asked questions
Does subcontract experience really count as federal past performance?
Yes. FAR 15.305(a)(2)(ii) explicitly includes past performance on subcontracts. You need to document the scope, your dollar value of work, the period of performance, and a point of contact at the prime who can confirm your performance. Some solicitations ask specifically for prime past performance and may weight subcontract experience differently, but you are not prohibited from offering it.
How do I find out which agencies buy what I sell?
USASpending.gov lets you search by NAICS code and product/service code to see which agencies have awarded contracts in your category and which primes are winning them. SAM.gov lists open solicitations. GSA's eBuy and agency procurement forecast pages list anticipated buys. The OSDBU office at any target agency publishes a Procurement Forecast of planned acquisitions.
What is the simplified acquisition threshold in 2026?
The standard simplified acquisition threshold is $250,000 as of the last revision to FAR 2.101. The micro-purchase threshold is $10,000. These thresholds are subject to periodic adjustment by the FAR Council; confirm against acquisition.gov before relying on them in a proposal.
Can I use commercial contracts (non-government) as past performance?
Yes. FAR 15.305(a)(2)(ii) allows agencies to consider "commercial contracts." The evaluator will consider how closely the commercial work resembles the federal requirement. The more similar the scope, complexity, and customer type, the more weight it carries. Document commercial work with the same rigor: contract value, scope, period, outcome, and a reference contact.
If I team with a larger firm, does that hurt my small-business status?
A teaming arrangement by itself does not generally create SBA affiliation. A joint venture can trigger affiliation concerns if the relationship is not structured correctly. The Mentor-Protégé Program includes a specific affiliation exclusion, meaning the large mentor and small protégé are not treated as affiliated solely because of the approved relationship. Outside the program, review SBA's affiliation rules at 13 CFR 121.103 before formalizing any joint venture.
The fastest first step for most new contractors is the subcontract route. Use the subcontract finder to identify prime contractors active in your NAICS codes who have subcontracting plan obligations on current awards. One strong sub performance, documented properly, converts your neutral past performance rating into something real.
Last reviewed: June 2026
Primary sources: FAR 15.305(a)(2) and 15.305(a)(2)(iv) (acquisition.gov); FAR 52.219-9 (acquisition.gov); FAR 2.101 (definitions of simplified acquisition threshold and micro-purchase threshold); 13 CFR 125.8(e) (SBA Mentor-Protégé Program JV provisions); SBA Mentor-Protégé Program guidance at sba.gov; FAR 13.201 (micro-purchase procedures).
