Federal contractors understandably associate litigation at the Court of Federal Claims (COFC) with recovering monetary damages.  Appealing denied claims to the COFC (along with the Boards of Contract Appeals) is the exclusive way for contractors to recover damages for changes, delays, and other government-caused impacts under the Contract Disputes Act (CDA).

But contractors can suffer other kinds of harm at the government’s hands – including reputational damages via the Contractor Performance Assessment Reporting System (CPARS). 

To avoid or mitigate that harm, Contractors need to:

• Proactively manage CPARS evaluations for every covered contract to identify unfair, arbitrary, or factually incorrect ratings. 

• Timely submit responsive comments through the CPARS portal – including specific facts and performance details to counter the agency’s erroneous narrative, and

• If necessary, proceed with filing a CDA claim challenging the evaluation.

For additional information regarding CPARS strategy, claims, and appeals, check out my presentation materials and other posts.

A new decision at the COFC also reinforces contractors’ ability to take CPARS battles to court by seeking declaratory relief.

Declaratory Relief Primer

The COFC decision addresses a contractor’s claim for declaratory relief (in addition to monetary damages).

The short version – the contractor leased commercial space to the USPS.  When the agency allegedly failed to pay rent or maintain the property, the contractor demanded payment (of course) – but also sought a declaratory judgment stating that USPS could no longer exercise its option to purchase the building due to its material breach.

The government moved to dismiss the declaratory judgment claim, arguing that the COFC lacks jurisdiction under the CDA to award non-monetary relief. The Court denied the motion and reinforced critical precedent – contractors have jurisdiction at the COFC to seek declaratory relief.

The decision specifically highlights the importance of declaratory relief when money alone cannot resolve the dispute or restore the parties’ contractually defined positions.

Relevance to CPARS Disputes: Protecting Reputation Through Non-Monetary Relief

A negative CPARS rating can ruin a contractor’s reputation and ability to secure future work.  Contractors seeking staying power in the federal marketplace need to understand and monitor the CPARS system – and learn to harness it as a business development tool.

The concept of declaratory relief is critically important to challenging an unfair CPARS evaluation.  Money is often not the (primary) factor – but these contentions claims need a forum for contractors to fight back against unreasonable, arbitrary, and capricious agency action.

Important note – disagreement with a CPARS evaluation does NOT confer immediate jurisdiction at the COFC.

Contractors must trust the process, including participating in the defined comment period through the CPARS portal.  CPARS comments (if done effectively) can be a powerful tool to push back on arbitrary evaluations by presenting factual, legal, and procedural arguments.

If the government persists, contractors must submit a formal CDA claim that meets all of the statutory requirements.  If the government denies that claim, the path forward at the COFC is secure.

Takeaways for Government Contractors

• Non-Monetary Claims Are Viable: Contractors should not overlook the power of declaratory relief in contract disputes. It can be a valuable tool to gain leverage.
• Trust the Process: Contractors must follow the CPARS comment period requirements and submit a formal CDA claim.  Jumping immediately to litigation will get you bounced.
• CPARS Litigation Is Real—and Growing: Developing case law gives contractors a forum to protect their reputational interests – even without direct financial harm.