Government contractors know that an unfavorable performance review posted to the Contractor Performance Assessment Reporting System (“CPARS”) can be extremely costly. Many negotiated solicitations include past performance as an important or even primary evaluation factor for contract award. An unfavorable review on a past contract can impose significant costs on the contractor to address the unfavorable review with contracting officers on future solicitations. However, the contractor saddled with an unfair and inaccurate CPARS review may now have a means to challenge the review and recover some of these costs. Continue Reading A New Way to Claim Damages Resulting from an Unfavorable CPARS Rating
By: Michael H. Payne & Maria L. Panichelli
On August 7, 2013, the DoD, GSA, and NASA proposed a rule (78 FR 48123) that would amend the FAR to significantly alter the past performance evaluation and assessment process. Specifically, the rule would cut in half the time that contractors have to comment on their own performance evaluations. It would also ensure that all agencies have immediate access to all performance evaluations, even before the end of the shortened contractor comment period.
The FAR currently addresses past performance evaluations at FAR subpart 42.15, “Contractor Performance Information.” Under the current system, the Contractor Performance Assessment Reporting System (CPARS) collects past performance assessments. CPARS provides an automatic notification to the contractor when a past performance evaluation has been submitted to the system, and following that notification, the contractor is allowed 30 days to comment on its evaluation. It is only after that comment period has expired that the CPARS system assembles and provides the past performance-related information, including the contractor’s comments, to the Past Performance Information Retrieval System (PPIRS). Agency source selection officials can then use PPIRS to review the reports and utilize the past performance information in making their selection decisions.
The rule, which was drafted pursuant to directives set forth in the National Defense Authorization Act, seeks to alter this system. It would require that a contractor’s past performance ratings be immediately added to both the CPARS and PPIRS databases, without any delay. Though, under the rule, contractors will be allowed to comment on their performance evaluations, they will be able to do so only after the evaluation is already in the PPIRS, meaning that source selection officials will be able to view evaluations before the contractor is given an opportunity to finish its response. Moreover, under the rule, contractors’ “comment period” will be shorted from 30 to 14 days.
The proposed rule explains the rationale behind its proposed changes, stating that: “[i]t is important for past performance information to be shared with source selection officials immediately, so that award decisions can be better informed and made in a more timely manner… Expediting the time allotted to contractors to respond to performance evaluations should improve communication between the contractor and the government, enable current information to be shared quickly throughout the government, and ultimately ensure the government does business with high performing contractors.” While this is certainly an admirable goal, the reality of the proposed system is that it deprives contractors of a full and fair opportunity to respond to negative evaluations, thereby depriving them of ample due process. This is compounded by the lack of administrative or judicial avenues open to contractors seeking to challenge performance evaluations.
We believe that the proposed changes are unfair because they increase the opportunity for contracting officers to use performance evaluations as a weapon. Posting a rating even before a response has been furnished not only is a little like executing the prisoner before trial – it is like executing the prisoner immediately after arrest. In an age where past performance ratings are critical in source selections, there should be more safeguards, not less. In fact, we believe that marginal and unsatisfactory past performance ratings should be subject to a due process review, including a hearing, before they are posted. If contracting officers realize that they must be prepared to defend past performance ratings, they will be less likely to assign poor ratings in defense of claims, or to gain unfair leverage against the contractor.
It is not yet clear whether this rule will go into effect, let alone what the timetable for these proposed changes will be if the rule is implemented. The comment period ends on October 7, 2013. We will keep you updated on the progress of the rule.
Michael H. Payne is the Chairman of the firm’s Federal Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution. Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.