ABSCA Confirms Contractors May Challenge Unfavorable CPARS Ratings

While you might not be able to fight City Hall, you can fight your CPARS rating. In a short opinion published last week, the ASBCA confirmed it has jurisdiction to annul an inaccurate and unfair government evaluation of a contractor’s performance. Cameron Bell Corporation d/b/a Government Solutions Group, ASBCA No. 61856 (May 1, 2019).  Though the ASBCA cannot require the government to issue a specific rating, it can remand the matter to the contracting officer with instructions to redo the evaluation ─ a perhaps imperfect, yet still potent form of relief available to contractors who believe the government has improperly rated their contract performance.By regulation, contractors are entitled to rebut a negative evaluation of their performance in the Contractor Performance Assessment Reporting System, or CPARS. FAR 42.1503(d).  A contractor’s rebuttal submission typically is due within 14 calendar days of the date the agency invites the contractor to respond. See id. If this proves unsuccessful, a contractor may challenge the CPARS rating by submitting a claim with the contracting officer under the Contract Disputes Act (CDA).  See, e.g., Cameron Bell, ASBCA No. 61856, 2019 WL 2067642 (May 1, 2019).  Then, if the contracting officer denies the claim, the contractor can appeal the decision to an appropriate Board of Contract Appeals or the United States Court of Federal Claims.

That is precisely what the contractor did in Cameron Bell.  There, a contractor challenged a less-than “Satisfactory” rating of its performance in a CDA claim.  After the contracting officer denied the claim, the contractor appealed to the ASBCA seeking various forms of injunctive relief.  The government moved to dismiss the appeal for lack of jurisdiction.  But the Board denied the government’s motion in part, finding that the ASBCA has jurisdiction to “assess whether the contracting officer acted reasonably in rendering the disputed performance rating or was arbitrary and capricious and abused his discretion.”  Id. The Board also noted, that while it lacks authority to “order the government to revise a CPARS rating,” the ASBCA “may remand to require the contracting officer to follow applicable regulations and provide [a contractor] a fair and accurate performance evaluation.” Id.

The Cameron Bell decision provides a few helpful reminders to contractors who are considering whether to challenge a negative CPARS rating.  First, the governing regulations provide contractors a basis for establishing that the government has issued a CPARS rating in an arbitrary and capricious manner.  The FAR includes definitions of each rating (i.e., Exceptional, Very Good, Satisfactory, Marginal, Unsatisfactory) and outlines the information the government must provide to justify the rating it assigns.  See FAR 42.1503 and Table 42-1 (Evaluation Ratings Definitions).  These objective guidelines allow contractors to challenge a negative CPARS rating if, for example, the government’s determination is based upon inaccurate, incomplete, inconsistent or otherwise unsupported information or statements.

Second, contractors should be aware that, while the ASBCA cannot order an agency to issue a higher CPARS rating, the Board can direct the government to conduct a “fair and accurate” evaluation of the contractor’s performance in accordance with law and regulation. In many cases, an order remanding a CPARS rating for reevaluation will result in only partial relief for the contractor ─ e.g., where the agency must simply do a better job of explaining why it assigned a low rating. But in other cases, such an order will require the agency to meaningfully reexamine the rating in light of the contractor’s record of performance, the objective guidelines in FAR Subpart 42.15 and the particular challenges raised by the contractor on appeal.  See, e.g., DOD OIG, “Summary of Audits on Assessing Contractor Performance: Additional Guidance and System Enhancements Needed,” (May 9, 2017) at 11 (criticizing the assignment of a “marginal” rating where the agency did not explain the contractor’s purportedly “significant” performance failure and where the evidence showed the alleged failure had no impact on the agency).

Third, contractors also should keep in mind that, in certain circumstances, they may be entitled to recover monetary damages if they can show the government’s arbitrary and capricious performance evaluation “constituted bad faith and a breach of the [agency’s] duty of good faith and fair dealing.”  See, e.g., Government Services Corp., ASBCA No. 60367, 16-1 BCA ¶ 36,411.   Though it can be challenging to prevail on a claim for breach of the duty of good faith and fair dealing, it undoubtedly is a viable theory of recovery in many CPARS rating cases, particularly those where there is clear evidence of government bias or overreach that can be developed further through discovery.  Cameron Bell, 2019 WL 2067642 (“We also have jurisdiction to determine whether the government breached the implied contractual duty of good faith and fair dealing, an issue that [the contractor] raised in its claim to the contracting officer”).

 At bottom, the ASBCA’s decision in Cameron Bell is a helpful reminder that contractors have recourse when they are assigned a less-than positive CPARS rating. Contractors should familiarize themselves with the CPARS process ahead of time so that they can quickly identify the evidence needed to rebut a negative rating and, if necessary, challenge the rating in a CDA claim.

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