A contractor’s performance under certain federal construction contracts is subject to evaluation at least annually and upon project completion. Each Contractor Performance Assessment Report is entered into the Contractor Performance Assessment Reporting System, a government-wide reporting tool and will remain in CPARS for consideration during source selection decisions for six years following project completion.

Inaccurate performance evaluations can significantly and negatively impact a contractor’s future, from impairing bonding capacity to losing bids. The prudent federal contractor, however, must successfully navigate the CPAR process to ensure project outcomes are accurately captured.

Performance Evaluation Requirements

The Federal Acquisition Regulation requires federal agencies to evaluate contractor performance for:

• construction contracts exceeding a simplified acquisition threshold (currently $750,000); and
• construction contracts terminated for default, regardless of contract value.

Performance evaluations should be based on clear, relevant information and objective facts, and they will evaluate the following factors:

• quality of product or service;
• cost control (as applicable);
• schedule/timeliness;
• management or business relations;
• small business subcontracting;
• regulatory compliance; and
• others (as applicable).

Each evaluation factor gets a rating (exceptional, very good, satisfactory, marginal or unsatisfactory), and the ratings must be supported by a narrative explanation. Agencies most often conclude a CPAR by indicating whether the assessing official would recommend the contractor for similar requirements in the future.

The CPAR Process

The FAR, along with applicable agency policies, sets out the basic parameters for performance evaluations. Generally, the AO prepares and signs the evaluation, with input from others, such as the technical office and end user. The AO may be the contracting officer or another government official, as delegated by the CO. The AO provides the evaluation to the contractor’s representative for review, who then has 60 days to submit comments. After day 14 of the 60-day contractor review and comment period, however, the CPAR will be entered into the CPARS, regardless of whether the contractor provides comments. If the contractor’s representative disagrees with the evaluation, a reviewing official, who is a government employee at least one level above the CO, must independently review, then close, the evaluation. The entire evaluation process, including the RO’s review, must be completed no later than 120 days after the end of the performance period under review.

Contractor Commenting Best Practices

A contractor should review each evaluation for compliance with applicable FAR and procuring agency requirements. Potential procedural issues to raise in comments include failure to:

• follow agency procedures;
• properly designate the authority to conduct the evaluation to a qualified AO;
• provide the opportunity for contractor comments; and
• timely conduct the evaluation.

Ratings definitions and notes, set forth in FAR 42.1503, are particularly instructive on potential areas of substantive errors the contractor should address in its comments. To justify a “marginal” rating, for instance, the FAR requires the agency to:

• identify a significant event in each category that the contractor had trouble overcoming and state how it impacted the government; and
• reference the management tool (e.g., management, quality, safety or environmental deficiency report or letter) that notified the contractor of the contractual deficiency.

Here, examples are failure to identify:

• “management tools,” such as directive letters or non-compliance notices; and
• how the government was impacted by the issue.

Where it can, the contractor should also try to show government reliance on inaccurate facts or misinterpretation of the contract requirements. Additionally, a contractor should point to relevant facts not considered by the agency and strengths of the contractor’s performance. If there were any issues, explain mitigating circumstances and steps taken to overcome such issues. Contractors should not ignore material inaccuracies in narratives, even if the narrative is tied to a good rating.

Submitting a Claim

If, after the RO’s review, the agency does not correct an inaccurate evaluation, a contractor’s next step in challenging the evaluation is to submit a claim to the CO under the Contract Disputes Act. In such a challenge, the contractor must identify all issues, claims and forms of relief sought and request a final decision from the CO withdrawing or correcting the evaluation. The contractor’s claim can include a request for monetary relief if the requested amount is a sum certain or capable of determination by a simple mathematical formula.

Appealing a Final Decision

A CO’s final decision on the CPAR challenge, if unfavorable, must be appealed to the appropriate Board of Contract Appeals within 90 days of receipt or to the United States Court of Federal Claims within one year of receipt. Upon a showing of prejudice (e.g., there would be a different outcome if the error were cured), a Board or the COFC may provide declaratory relief, finding the agency failed to comply with applicable FAR provisions and agency procedures, and it can remand the matter to the contracting office with instructions to follow applicable regulations. A Board or COFC may also provide the contractor with a fair and accurate performance evaluation. However, remand of an evaluation may not yield a better rating; instead, remand may merely result in an agency providing better support for a negative rating.

A Board or the COFC cannot grant specific performance or injunctive relief (e.g., order removing the evaluation from CPARS during the pendency of the appeal or order a specific rating be awarded) for a claim challenging a negative CPAR; requesting an improper form of relief may result in dismissal of the appeal.

Do Not Wait to Act

Waiting to challenge a negative CPAR until a future bid protest, generally, has not been a successful means of recourse. A contractor should enable a positive performance rating by not only performing a project in accordance with contract requirements, but also diligently participating in the interim and final evaluation process to ensure project outcomes are accurately captured.