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Contractor Appeals of Negative Past Performance Evaluations




by:
Thomas F. Rath
Husch Blackwell LLP - Washington Office

 
December 17, 2013

Previously published on December 13, 2013

Contractors have the constitutional right to rebut past performance evaluations before they are stigmatized by the government’s assessments in the future. See Old Dominion Dairy Products, Inc. v. Secretary of Defense, 631 F.2d 953 (D.C. Cir. 1980). But full exercise of this right has the potential to conflict with the practical interest in efficient government procurement. The final revisions to the rules governing the process for reporting and appealing past performance evaluations demonstrate that the two ideals are not easily balanced. The Federal Register notice announcing the final revision to FAR 42.1503 can be found at 78 Fed. Reg. 46783 (Aug. 1, 2013).

Helpful rules revisions

First the good news. The August 2013 final revisions to the rules requiring the government to evaluate past performance retain the existing requirement to allow contactor rebuttal and appeal. Commenters to the government’s proposal were unanimously against scrapping or substantially modifying the process. As summarized in the discussion of the final rule, commenters insisted that the appeals process “ensures that individual Government rater bias or lack of understanding of the complete program, not just contracting issues, can be brought out and addressed.” According to one commenter, at least 30 percent of past performance evaluation appeals result in substantive changes. The final rule maintains verbatim the language of former FAR 42.1503(b), now located at FAR 42.1503(d).

Lingering problems

While the new rule retains the contractor appeals process, it did not solve an old problem—what weight agencies should give appealed evaluations in solicitations that take place at the same time an appeal is pending. Contractors have 30 days to submit “comments, rebutting statements, or additional information” concerning their past performance evaluations. But the FAR gives no guidance on what happens next, except that the appeal should be heard “at a level above the contracting officer.” The rule leaves all the “[s]pecifics of the appeal process . . . to agencies’ discretion.”

The commentary on the final rule also states that “the existence of an appeal need not delay making a past performance evaluation available to source selection officials.” Agencies are therefore required to enter past performance evaluations into CPARS even while an appeal is pending, and there is very little restraint on how long it might be until the evaluation is corrected. The possibility that a contractor could lose an opportunity because of an inaccurate evaluation is alive and well.

One variation of the problems associated with issuing evaluations before disputes are resolved appears in Extreme Coatings, Inc. v. United States, No. 11-895C (Fed. Cl. Oct. 3, 2012). The government's negative past performance evaluation cited “unacceptable deficiencies” in the contractor’s dam repair work in Montana. The contractor claimed that differing site conditions caused the problems underlying the performance and asked for an adjustment and changes to the evaluation reflecting the contractor’s lack of control over the problems. We discussed the procedural issues associated with Contract Disputes Act jurisdiction over the evaluation claim in an earlier post. Extreme Coatings was left under the cloud of a negative evaluation despite disputing whether it was actually responsible for the conditions that led to the government’s dissatisfaction in the first place.

Practically, contractors like Extreme Coatings face fewer risks when they submit their rebuttal information as soon as possible. This material at least alerts other contracting officers to the existence of a dispute, reducing the chances that an opportunity will be lost because of an inaccurate evaluation. But it would be naive to think that this is complete protection against misuse of disputed evaluations. The ultimate question of how much weight to give a disputed evaluation in subsequent contract award decisions—and the risk of unfair stigma—is left to the discretion of officer making the award.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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