This is the seventh of an eight-part series addressing cutting-edge strategies for Certified Claims under the Contract Disputes Act (CDA). Certified Claims are the primary avenue available to government contractors to recover damages due to changes, delays, inefficiencies, and other government-caused issues – a particularly important point for contractors seeking to maintain positive cashflow while facing the prospect of an economic slowdown or recession.
You can check out previous posts starting here.
In this series, I’ve looked at the CDA in terms of a contractor’s ability to pursue time and costs against the federal government. Those remedies are key to contractors holding the government accountable for project changes and delays – and staying financially solvent.
But while time and money are undoubtedly important – they are not the only metrics that matter for a successful business.
For federal contractors, it is not an exaggeration to say that performance evaluations are the lifeblood of the business. A less-than-satisfactory evaluation in the Contractor Performance Assessment Reporting System (CPARS) affects far more than just the agency’s assessment of performance on a particular project. A negative evaluation follows a contractor around – impacting the ability to obtain future contracts due to the specter of negative past performance ratings.
Fortunately for contractors, the CDA offers the ability to challenge and reverse negative CPARS evaluations through the established Claims process.
The CPARS Portal Process & CDA Claims
The first step in any successful CPARS challenge involves meaningful participation in the evaluation process through the CPARS portal. Federal Acquisition Regulation (FAR) Part 42.15 entitles contractors to submit comments regarding a disputed performance evaluation. Specifically, contractors are entitled to submit comments, rebuttal statements, and/or other information in response to the agency’s evaluation.
The agency must then review those comments at a level above the contracting officer and update the evaluation, if necessary. In an ideal world, the contractor’s detailed and impactful comments demonstrate to the government that an adjustment is required.
However, if the review and comment process proves unsuccessful in resolving the issues, both the U.S. Court of Federal Claims and Boards of Contract Appeals recognize that contractors may bring a CDA Claim to address performance evaluation disputes.
Keys to CPARS Claim Litigation
Although litigation over a performance evaluation dispute is a relatively new development – the law is now clear that a condition precedent to litigating the issue before a Court or Board is a CDA Claim. That is – just like a Claim for damages based on (for example) delay or a differing site condition – the contractor must file a written claim in accordance with the CDA and receive a denial of that Claim in order to move forward.
Generally speaking, in order to prevail on a performance evaluation dispute, the contractor must be prepared to prove that the agency’s evaluation is arbitrary, capricious, and contrary to law. This requirement ties back neatly to the CPARS comment process. From the outset, the contractor’s goal should be to show that the agency’s evaluation is at odds with the project record, as well as common sense.
The takeaway for contractors is therefore very simple – engage in the process and follow the required steps in the CPARS portal when disputing a CPARS evaluation. The contractor must participate in the review and comment procedure articulated in FAR 42.15 – but if that fails, the next logical step is to proceed with a CDA claim (or, perhaps as an intermediate step, a request for equitable adjustment). Before a performance evaluation dispute can escalate to CDA litigation, the contractor must be armed with a denial or deemed denial of that Claim.
Come back next Tuesday (December 20) when I’ll wrap up this series with Part 8 and discuss best practices for contractor CDA claims.
Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group. You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.