For government contractors, an unfavorable performance rating review posted to the Contractor Performance Assessment Reporting System (“CPARS”) can be extremely costly.  Many of the government-negotiated solicitations include past performance as an important, and sometimes even primary, evaluation factor for contract award.  An unfavorable CPARS review on a past contract can cause the contractor to incur substantial extra costs in addressing the unfavorable review with contracting officers on future solicitations, and, in some instances, the contractor saddled with an unfair or inaccurate CPARS may have to challenge the review and recover some of these costs.

Both the Federal Court of Claims and the Armed Services Board of Contract Appeals (“ASBCA”) have held that they have jurisdiction to hear Contract Dispute Act claims regarding unfair and/or inaccurate CPARS review.  The relief available to contractors until this year was a declaration from the Court of Claims or Board that an unfair or inaccurate CPARS review was arbitrary and capricious.  Neither the Board nor the Court had the authority or power to order the contracting officer to change the unfavorable review.  The contractor who received a declaration from the Court or the Board regarding an unfavorable CPARS review may use it in the future to explain the unfavorable review when bidding new government work; however, the unfavorable review remains in the CPARS system and shows up on all future solicitations, the Board or Court decision notwithstanding.

The Board of Contract Appeals has recently validated a new type of claim related to an unfavorable CPARS review.[ii] In that case, the contractor received a CPARS review that it believed was both inaccurate and unfair.  The contractor’s claim involved $100,000 in estimated damages, not based on future profits from lost work, which cannot be recovered, but instead on the estimated cost to address the unfavorable review on future proposals.  The innovative contractor calculated how many proposals it would submit on solicitations that require consideration of past performance during the time period that an unfavorable review would remain in the CPARS system, and then estimated the cost, both administrative and legal, of addressing the issue with future contracting officers in the form of negotiations as well as protests.

Not unexpectedly, the government moved to dismiss the contractor’s claim on the basis that the contractor had failed to state a sum certain.  The BCA rejected the government’s argument and validated the contractor’s estimated claim allowing the litigation to proceed.  While the Board has not yet issued a decision granting such a claim, the ability to pursue monetary relief for an unfavorable CPARS review could be a game-changer for government contractors suffering the consequences of inaccurate and unfair reviews.

[i] Thank you to Michael Payne and the Federal Construction Contracting Blog (12/9/17) for bringing this case to our attention.
[ii] Appeal of Government Services Corporation, ASBCA #60367, 16-1BCA, paragraph 36411 (June 20, 2016).

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