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.

By: Michael H. Payne

The Duncan Hunter National Defense Authorization Act of 2009 (Public Law 110-417) was enacted on October 14, 2008. Section 872 of the Act required the development and maintenance of an information system that contains specific information on the integrity and performance of covered Federal agency contractors and grantees. The Federal Awardee Performance and Integrity Information System (“FAPIIS”) was developed to address these requirements. FAPIIS is a distinct application that is accessed through the Past Performance Information System (PPIRS) and is available to federal acquisition professionals for their use in award and responsibility determinations. FAPIIS provides users access to integrity and performance information from the FAPIIS reporting module in the Contractor Performance Assessment Reporting System (CPARS), proceedings information from the Central Contractor Registration (CCR) database, and suspension/disbarment information from the Excluded Parties List system (EPLS). (Past performance information on construction contracts is stored in the Construction Contractor Appraisal Support System “CCASS”).

Contractors need to be aware that FAPIIS includes information relating to a contractor’s past performance reviews, suspensions, debarments, nonresponsibility determinations, and civil, criminal and administrative proceedings that include a contractor’s performance of federal, state and local contracts. Since contracting officers will be reviewing this information when they conduct responsibility determinations, contractors need to be certain that the information is accurate. In addition, since some of the information, excluding past performance information, is available for public review, there is a possibility that competitors will look for information to use against a contractor in a bid protest. That provides all the more reason that contractors should be diligent in assuring that inaccurate information does not remain on the system.

The new requirements, that became effective on April 15, 2011, are implemented by FAR 9.104-7 and the clause found at FAR 52.209-9., and further information can be found at the Contractor Performance Appraisal Reporting System (“CPARS”) website, and by reading the FAPIIS User Manual.

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 compliance and federal procurement matters.

In an interesting decision issued by the United States Court of Federal Claims on November 25, 2008, in a case entitled BLR Group of America, Inc. vs. United States, the Court ruled that it had jurisdiction to consider a contractor’s claim that a Contractor Performance Assessment Report (“CPAR”) was “false and highly prejudicial.” The case arose because the Air Force had assigned a final performance rating of “Marginal” to the contractor in several categories, and had refused to amend the rating pursuant to a rebuttal presented by the contractor. Instead, the Air Force disseminated the rating by posting it on the Past Performance Informational Retrieval System (“PPIRS”), a database of performance ratings accessed by contracting officers while making contractor responsibility determinations and while conducting past performance evaluations during the source selection process on negotiated procurements. At a time when contractors are experiencing the rapidly growing use of “best value” negotiated procurements, the accuracy and fairness of contractor performance evaluations can be critical to a contractor’s ability to successfully compete for government contracts.

The Court did not address the merits of the contractor’s contention that the performance rating was “false and highly prejudicial,” but simply ruled that the Court had jurisdiction to consider the case. The government had filed a motion to dismiss and cited a number of Armed Services Board of Contract Appeals decisions where the Board had declined to consider appeals based on challenges to performance evaluations. The Court refused to follow the Board’s decisions (the Court of Federal Claims is not bound by the decisions of the various boards of contract appeals) and concluded that a contractor could file a claim under the Contract Disputes Act of 1978. In doing so, the Court focused on the Federal Acquisition Regulation (“FAR”), which provides that a claim is “a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract.” See FAR 52.233-1. The Court also noted that the contractor was not appealing the performance evaluation itself, and concluded that a contractor’s claim requesting a change to a performance evaluation is a proper mechanism, and provides the proper jurisdictional predicate, to challenge an adverse performance evaluation in the Court of Federal Claims. 

 

In addition, even though the contracting officer had not issued a final decision, the Court ruled that the contractor had made its claim to the contracting officer for a fair and accurate CPAR on January 12, 2007, and that the contracting officer, more than twenty-two months later, had failed to issue a final decision in conformance with 41 U.S.C. 605(a).  The Judge then stated that “Because twenty-two months exceeds the length of time that the court considers “reasonable” for the contracting officer to issue a decision in this case, the court deems the claim denied by operation of 41 U.S.C. § 605(c)(5), which allows plaintiff to pursue the instant appeal.” In other words, the failure of the contracting officer to issue a decision within a reasonable time was treated as a “deemed denial” entitling the contractor to file an appeal.

 

The Court not only held that it had the jurisdiction to consider the case, but it also stated that a contractor is legally entitled to a fair and accurate performance evaluation. In view of what has frequently been the use of performance evaluations as a tool to unfairly punish contractors, and to intimidate them into not filing claims for fear that they will receive lower performance ratings, this decision comes as a welcome leveling of the playing field. We have always felt that the statutory right that contractors have to file claims and appeals should not be diminished by fear of reprisal. All claims should be evaluated on their merits. 

 

Please see the Federal Construction Project Manager’s Bulletin, November 2008, a publication of Construction Contract Specialists, Inc., for an excellent article entitled "The Contractor Performance Evaluation System (Revisited)," authored by Paul Perkins, that addresses the BLR decision and revisits an earlier article. Mr. Perkins presents interesting background information on the contractor performance evaluation system and provides the author’s perspective as a former contracting officer, project manager, and construction consultant.