Government Contracts Monitor

The CPARS Process: Engage Early and Often

November 8, 2016

As federal contract dollars become more and more scarce, contractors must aggressively posture themselves to win contracts. Since past performance often plays a key role in source selection, a poor past performance rating can have far-reaching impacts. Fortunately, the Contractor Performance Assessment Reporting System (CPARS) process allows contractors to be actively engaged in ensuring that future source selection officials have a fair and accurate assessment of their past performance. Contractors must be aware of their rights and responsibilities in this regard—and should, whenever possible, take full advantage of any opportunity to help shape their CPARS ratings. Of course, contractors sometimes have to fight for the right to be heard. In the recent case of Colonna's Shipyard, Inc., ASBCA Nos. 59987, 60104, and 60105, the Armed Services Board of Contract Appeals (ASBCA) clarified the boundaries of its jurisdiction over disputes concerning such ratings.

The Navy awarded the Appellant, Colonna, a fixed price contract to dry-dock and repair a navy vessel and barge. After Colonna performed the contract, in July 2014, the Navy issued its first CPAR rating, in accordance with the terms of the contract. The CPAR awarded Colonna unsatisfactory performance ratings and contained numerous errors—a fact that the Navy did not dispute. Colonna quickly communicated its concern over the errors to the Navy, and sought to have the rating modified. Eight months later, in March 2015, the Navy re-issued the CPAR, which again assigned Colonna a poor performance rating and contained many errors. Colonna filed a claim with the Contracting Officer (CO) a few weeks later, requesting that the CPAR be withdrawn and refiled with accurate facts. Some three weeks after that claim was filed, in April 2015, the Navy again amended the CPAR but repeated many of the same errors. Colonna submitted a second claim a month later, in May 2015, largely identical to the first, objecting to the revised CPAR; it filed its initial claim at the ASBCA that same day, asserting a deemed denial of its March and May claims by the Agency. In September 2015, the Navy made additional minor changes to the CPAR; Colonna filed an amended complaint at the ASBCA in January 2016, in addition to a partial motion for summary judgment. The Navy filed a motion to dismiss in response.

The ASBCA and Court of Federal Claims (COFC) first asserted jurisdiction over CPARS disputes in Todd Construction, L.P. v. United States¸656 F.3d 1306, 1314 (Fed. Cir. 2011), in which COFC reiterated that jurisdiction under the Contract Disputes Act (CDA) exists where a claim has “some relationship to the terms or performance of a government contract.” In its motion to dismiss, the Navy alleged that Colonna sought specific performance or injunctive relief which was beyond the scope of the CDA, because Colonna’s complaint stated that the CPARs “be vacated from the Navy’s past performance evaluation system, and the Contracting Officer should be ordered to issue a new CPAR for this contract that is fair and accurate.”

The Board has repeatedly held that it has jurisdiction to review challenges to negative performance evaluations. However, the CDA stops short of granting the ASBCA jurisdiction to order specific performance or grant injunctive relief—in other words, the Boards of Contract Appeals may only order “equitable,” or financial, relief for damages. The same is true for COFC. In this case, the Board ruled that it could require the CO to review the CPAR, but not to reissue it.

Colonna also alleged that the Navy had constructively debarred it from winning contracts, because the negative past performance reflected poorly on Colonna and thus it was penalized in competitions that considered past performance. In addition, Colonna asserted that its due process rights had been violated because it was not given the chance to respond to the Navy’s negative comments about its performance before they were posted to CPARS. The Navy countered that the Board lacked jurisdiction over both of these claims since the Board cannot consider “constructive debarment” or claims based on the Constitution. The Board agreed that it could not rule on the due process argument, but declined to dismiss Colonna’s complaint because Colonna’s arguments were based on a procedural deficiency under the terms of the contract—namely, errors in the CPARS process—which then caused the due process violation. Ultimately, the Board retained jurisdiction over this issue but declined to characterize it as a question of due process; rather, it was considered a question of procedure under the CDA. Ultimately, however, Colonna’s success on the jurisdictional issue amounted to a Pyrrhic victory; the Board found that material issues of disputed facts prevented it from disposing of the entire claim on either side’s summary judgment motion.

CPARS can be a very frustrating and confusing system for a contractor to navigate, and CPARS claims are particularly challenging for a number of reasons. First, they must be very carefully crafted to ensure that the alleged dispute falls within the Board’s or COFC’s jurisdiction under the CDA. Additionally, the contractor must consider what relief it will seek. This can be among the most frustrating elements because, as Colonna experienced, it can take quite some time to resolve disputes at either the Board or COFC. Colonna initially engaged with the Navy to correct the CPAR in July 2014. Now, over two years later, the claim has not yet been resolved. Throughout the entirety of CPARS litigation, the contents of the CPAR continue to negatively impact the contractors’ ability to compete for contracts unless the agency voluntarily agrees to remove the report from the system. There is no remedy to the contractor for the missed opportunities during this period because those damages cannot be quantified and are beyond the jurisdiction of the CDA.

While there is no easy answer for the frustrated contractor, the best way to handle a negative CPAR is to engage directly with the agency as soon as possible. FAR 42.1503(d) requires the agency to provide its evaluations to contractors as soon as practicable after completion of the evaluation.” It further grants contractors up to 14 days from the date the CPAR becomes available “to submit comments, rebutting statements, or additional information.” Contractors who fail to do so have only themselves to blame. If a dispute arises during this 2 week window, the FAR requires the agency to refer that dispute to a level above the CO. While the agency ultimately retains control over what it posts on CPARS, a contractor’s actively engaging from the outset and properly appealing when necessary is critical to preserving to its opportunity to shape its CPAR and protecting its interests.