Past performance shows up as a question on nearly every serious federal solicitation, and it is the one that makes newer businesses want to quit before they start. The fear is bigger than the reality. Past performance has a wider definition than most people assume, and there are real ways to start building a record without already holding a federal contract.
Commercial work counts
Past performance does not mean only past federal contracts. Work you have done for commercial clients, state or local government, or substantial nonprofit work counts as relevant experience, as long as it resembles the kind of work you are bidding on. A construction firm that has never touched a federal job but has ten years of commercial building work has a real past performance story to tell. Describe it in terms that map to what the solicitation is asking for.
Subcontracting builds a federal record before you prime anything
Working as a subcontractor under a company that already holds federal work gets you performance history under your own name, on federal jobs, without you having to win a prime contract first. Large primes often need subcontractors to meet their own small business goals, which makes this an easier door in than it sounds. Each subcontract you complete is a real, citable line of experience the next time you are asked for past performance.
Sources sought responses do not require it
A sources sought notice is market research, not a competition, and responding to one does not require you to already have federal past performance. It asks what you can do, not what you have already done for this agency. Responding consistently to notices in your trade builds visibility with buyers well before past performance becomes the deciding factor.
Small buys and micro-purchases start the trail
Not every federal purchase requires a full competition. Small purchases and micro-purchases exist specifically because agencies need an easy way to buy modest amounts of goods and services, and they are a realistic first entry point for a business with no federal history at all. A small win here becomes your first real line of federal past performance, however modest, and it is far easier to get than a large competed award.
Never inflate it, because CPARS follows you
Once you do have federal past performance, resist the urge to describe it as bigger or better than it was. Performance on federal contracts gets formally rated through CPARS, and those ratings attach to your business for future evaluations, not just the contract they came from. A stretched claim on a capability statement is a credibility risk the moment anyone checks it; an honest one, even a modest one, holds up.