Too often, government contractors treat negative evaluations in the Contractor Performance Assessment Reporting System (CPARS) like a squeaky wheel. They know an unfavorable CPARS evaluation can cause trouble down the road, but they wait until a serious issue arises to try to get the problem fixed. A decision this week from the U.S. Court of Federal Claims (COFC) illustrates why contractors should take immediate steps to challenge improper CPARS evaluations − before the negative evaluations start to impact their competitive standing in government procurements. 

Background

In Colonna's Shipyard, Inc. v. United States, No. 19-1373C, a disappointed offeror (Colonna's) brought a post-award bid protest challenging the Navy's award of a dry-dock maintenance contract to a competitor. According to Colonna's protest, the Navy improperly rejected its proposal based on an inaccurate CPARS evaluation of Colonna's performance on a prior Navy contract. Id. at 2. Colonna's also filed a separate lawsuit at COFC challenging the CPARS evaluation under the Contract Disputes Act of 1978, 41 U.S.C. §§ 7101-7109 (2012) (CDA). See id. at 2-3. 

The government moved to dismiss Colonna's bid protest for lack of jurisdiction, arguing that Colonna's could only challenge the merits of the CPARS evaluation in the CDA action. See id. at 3. Colonna's asserted that the Court had jurisdiction to "correct" the CPARS evaluation in the protest matter because the evaluation had caused the company to lose the dry-dock maintenance contract and would likely cause it to lose other contracts in the future. Id. at 2-3.

But the Court disagreed and dismissed Colonna's protest for lack of jurisdiction, citing the Federal Circuit's decision in Bannum, Inc. v. United States, 404 F.3d 1346, 1353 (Fed. Cir. 2005) (holding that "a bid protest is not the proper forum" to litigate performance assessments). Id. at 3-4. COFC also dismissed a separate breach of contract claim included in Colonna's complaint, finding that it raised matters of contract administration that are outside the Court's bid protest jurisdiction. See id. at 4. The Court similarly rejected Colonna's de facto debarment claim because it also challenged the merits of the CPARS determination, a challenge that must be raised in a CDA claim. See id. at 5-6. But all is not lost for Colonna's. The Court found it has jurisdiction to consider what it interpreted as an allegation that the Navy acted in "bad faith" when it selected Colonna's competitor for contract award. See id. at 4-5. In doing so, COFC explained that, "[a]lthough there are many concerns when a bidder challenges a CPAR within the framework of a bid protest in this court ... allegations of bad faith conduct in the selection of an awardee are not outside of the court's bid protest jurisdiction."  Id. (internal citations omitted). 

Key Takeaways

COFC's decision in Colonna's Shipyard offers several important reminders for any government contractor that is wrestling with whether, how, and when to challenge a negative CPARS evaluation:

• Do Not Wait to Challenge an Erroneous CPARS Evaluation. Colonna's Shipyard highlights the importance of timely challenging an improper CPARS determination − before the determination starts to impact your company's ability to compete for new work. By regulation, a contractor is entitled to rebut an unfavorable CPARS evaluation, typically within 14 days of being invited to respond. FAR 42.1503(d). If that does not work, the contractor may challenge the determination by submitting a CDA claim to the contracting officer. If the contracting officer denies the claim, the contractor can immediately appeal to COFC or an appropriate Board of Contract Appeals. See Colonna's Shipyard at 4; Cameron Bell, ASBCA No. 61856, 2019 WL 2067642 (May 1, 2019). And though a contractor has a six-year statutory window to submit a CDA claim, there is a significant risk that a negative CPARS evaluation will impair a contractor's competitive standing if the evaluation goes unchallenged for too long. 
• Do Not Wait to Protest, Dispute (Now). The decision in Colonna's Shipyard makes clear that COFC does not have bid protest jurisdiction to consider the merits of a CPARS challenge. A contractor may viably contest an agency's CPARS evaluation, however, by pursuing an action under the CDA. Even then, contractors should keep in mind that a successful CDA challenge may not automatically result in a better CPARS rating. Rather, the more likely relief is a remand to the agency with instructions to reevaluate the contractor's performance fairly, accurately and in accordance with applicable regulations. To some, that may not be perfect relief, but it is a necessary first step in securing a fair assessment of your company's past performance. 
• If You Have a Plausible Basis to Allege Bad Faith, Make the Argument. The fact that COFC found it has bid protest jurisdiction to consider Colonna's bad faith argument signals that COFC, like the Boards of Contract Appeals, may be hesitant to outright dismiss bad faith claims in matters of public procurement. Thus, when challenging a negative CPARS determination through the CDA disputes process, a contractor should consider the viability of asserting a claim based upon the breach of the duty of good faith and fair dealing, provided it has a plausible factual basis for doing so. See, e.g., Cameron Bell, 2019 WL 2067642; Government Services Corp., ASBCA No. 60367, 16-1 BCA ¶36,411. 

For more information, please contact:

Alejandro L. Sarria, asarria@milchev.com, 202-626-5822

Jason N. Workmaster, jworkmaster@milchev.com, 202-626-5893

Abigail T. Stokes*

*Former Miller & Chevalier attorney

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