Note: This post was updated on 6/17/2021
Any experienced federal contractor will tell you that a good past performance record is critically important to success in the government sector. Past performance information is defined in the FAR as:
“Relevant information, for future source selection purposes, regarding a contractor’s actions under previously awarded contracts or orders. It includes the contractor’s record of conforming to requirements and to standards of good workmanship; forecasting and controlling costs; adherence to schedules, including the administrative aspects of performance; reasonable and cooperative behavior and commitment to customer satisfaction; reporting into databases; integrity and business ethics; and business-like concern for the interest of the customer.”
A contractor’s past performance therefore not only impacts its overall reputation as a government contractor, but also has a direct effect on that contractor’s ability to secure future work. Given that past performance is an evaluation factor on virtually all competitive procurements, negative reviews make a contractor less competitive. They can thereby cost a contractor any number of contract opportunities, decrease revenue streams and adversely impact the company’s bottom line.
For these reasons, sophisticated contractors make sure to familiarize themselves with the past performance evaluation and review process, and all aspects of the Contractor Performance Assessment Reporting System (CPARS). They know what types of contracts require a past performance evaluation; they know when and how contracts are reviewed, and what specifically is being evaluated by the government. Most importantly, these contractors know how to challenge – and hopefully overturn – negative CPARS.
Below, I discuss five important questions and answers relating to CPARS, and contractor rights and remedies relating to past performance evaluations. For further advice about your particular CPARS situation, you should contact a legal professional.
What is CPARS.gov?
The Contractor Performance Assessment Reporting System – located at www.cpars.gov -- is “The official source for past performance information.” As the website itself explains, government officials can use the site to objectively evaluate contractor performance, by reviewing relevant performance and integrity information before making a source selection decision. Contractors, on the other hand, can use the website to review their own active performance and integrity information. This allows the contractor to assess whether or not there are any issues with their past performance history that might impact their ability to gain future work. Contractors can also use this site to comment on the government’s evaluation of their performance. Through this process, a contractor can refute and rebut a negative performance evaluation. But more on that below.
When Are Past Performance Evaluations Required and How Often are They Completed?
As a general rule, agencies must complete performance evaluations for all contracts and orders exceeding the simplified acquisition threshold. Evaluations must be completed for all orders exceeding the simplified acquisition threshold that are placed under a Federal Supply Schedule contract, a task-order or deliver-order contract awarded by another agency, a government-wide acquisition contract or multi-agency contract. Agencies placing orders under their own multiple-agency contract shall also prepare evaluations for their own orders. For single agency task-order and delivery-order contracts, the contracting officer may require performance evaluations for orders exceeding the simplified acquisition threshold, if such evaluations would produce more useful past performance information for source selection officials than that contained in the overall contract evaluation.
The rules are a little different with regard to construction and Architecture-Engineering (AE) contracts. Performance evaluations must be completed for all construction contracts in excess of $700,000.00, and all contracts that are terminated for default, regardless of contract value. Similarly, with regard to AE contracts, the agency must evaluate all contracts in excess of $35,000.00, and all contracts that are terminated for default, regardless of contract value.
“Final” past performance evaluations must be prepared when a contract or order is completed. In addition, for contracts with a duration of over 365 days, the agency must prepare “interim” CPARS evaluations, and must do so at least annually. The first interim evaluation must reflect evaluation of at least the first 180 calendar days of performance under the contract/order, and may include up to the first 365 calendar days of performance.
What Does the Government Evaluate and How?
An agency’s evaluation of a contractor’s performance should include a clear, non-technical description of the principal purpose of the contract or order, and most relevant for our purposes, reflect how the contractor performed. The evaluations should be tailored to the contract type, size, content, and complexity of the contractual requirements. FAR 42.1503 provides a list of evaluation factors that must be reviewed as part of each evaluation. It requires that the agency evaluate the contractor with respect to the following categories:
(i) Technical (quality of product or service);
(ii) Cost control (not applicable for firm-fixed-price or fixed-price with economic price adjustment arrangements);
(iii) Schedule/timeliness;
(iv) Management or business relations; and
(v) Small business subcontracting, including reduced or untimely payments to small business subcontractors when 19.702(a) requires a subcontracting plan (as applicable, see Table 42-3).
42.1503 also provides that agencies can add other applicable categories (such as “trafficking violations, tax delinquency, failure to report in accordance with contract terms and conditions, defective cost or pricing data, terminations, suspension and debarments, and failure to comply with limitations on subcontracting,” etc.) and/or subfactors. For each category, the reviewing agency should assign the contractor one of five ratings: exceptional, very good, satisfactory, marginal, or unsatisfactory. FAR 42.1503, Table 42-1 provides the criteria associated with achieving each rating.
For each factor, the agency should provide a supporting narrative, which explains the rating. This explanation should include “clear relevant information that accurately depicts the contractor’s performance.” Key to contractors is the fact that the evaluation should be based on “objective facts supported by program and contract or order performance data” (emphasis added).
In addition to these individual factor ratings, each CPARS should contain an “overall” evaluation. This is the equivalent of an overall “thumbs up” or “thumbs down” from the agency. The evaluator must state whether, knowing what it knows of the contractor’s ability to perform in accordance with the subject contract/order’s most significant requirements, it would or would not recommend the contractor for similar future contracts.
How Will I Know If a CPARS Evaluation Has Been Generated?
When the government completes a performance evaluation, the CPARS system will generate a notification to the contractor, alerting the contractor that an evaluation is ready for comment. Review it promptly, and as outlined below, act quickly if you need to rebut or challenge negative comments.
How Do I Challenge An Unjustified or Unfair Negative CPARS?
Contractors’ primary CPARS-related concern is how to handle a negative CPARS review. As outlined above, a positive past performance record is crucial to success in government contracting. A negative review can have severe negative consequences. But a contractor who has received an unjustified negative review is not without recourse. Contractors have response rights, and there are potential remedies that a contractor can pursue to address an unfair, unjustified or unwarranted CPARS evaluation.
As laid out above, a contractor will receive a CPARS-system generated notification when an evaluation has been completed by a reviewing agency. This is the contractor’s opportunity to challenge or rebut negative comments, or provide additional information in response to negative comments received. Contractors should provide a comprehensive response that addresses every criticism used by the agency to support any negative ratings. The more professional and objective a contractor can keep these comments, the better. If there are serial letters or other communications or documents that support the contractor’s comments, the contractor should reference them. These comments should be entered directly into the CPARS system. 14 days after the notice to the contractor is generated, the evaluation goes live, and can be viewed by agency officials reviewing past performance in connection with source selection decisions. If a contractor entered rebuttal comments during that 14 day window, the agency officials can see those comments in addition to the government’s evaluation. It is therefore critical to get comments in within 14 days.
When a contractor disagrees with the evaluation provided by the agency and challenges it, the agency is required to reconsider the evaluation. More specifically, the agency must require someone a level above the contracting officer to review the comments, consider the disagreements and make a decision as to whether or not the ratings should be revised. In many cases, this might result in a correction of any negative rating, and thereby resolve a contractor’s problem. In other cases, the reviewing agency official might conclude that the original, negative ratings were not in err, and allow them to remain. However, even then, a contractor is not out of potential remedies.
If a higher-level agency review does not ultimately result in the removal of the negative rankings, a contractor may file a CDA claim challenging the negative CPARS. As with any CDA claim, CPARS claim must first be filed with the agency. Should the agency deny the claim, or fail to respond within a reasonable time (which is known as a “deemed denial”), the contractor can appeal the denial of the claim to the appropriate Board of Contract Appeal or the Court of Federal Claims.
For more information on this topic, check out author Maria Panichelli’s on-demand Deltek webinar, Contractor Rights and Remedies Regarding CPARS.
