When Should a Contractor Contest a CPARS Rating?

The Contractor Performance Assessment Reporting System or CPARS was established so that different government agencies could better gather and share information regarding the past performance of contractors. “The primary purpose of the CPARS is to ensure that current, complete and accurate information is available for use in procurement source selections.” (Guidance for Contractor Performance Assessment Reporting System).

The CPARS has five ratings upon which it “grades” a contractor’s performance. The five ratings are:
• “Exceptional” (Performance meets contractual requirements and exceeds many to the Government’s benefit);
• “Very Good” (Performance meets contractual requirements and exceeds some to the Government’s benefit);
• “Satisfactory” (Performance meets contractual requirements);
• “Marginal” (Performance does not meet some contractual requirements); and
• “Unsatisfactory” (Performance does not meet most contractual requirements and recovery is not likely in a timely manner).

In assigning a rating, generally the following areas are assessed:
• Quality;
• Cost Control;
• Management;
• Small Business Subcontracting;
• Regulatory Compliance; and
• “Other Areas”.

The Assessing Official must also select the applicable choice to the following statement: “Given what I know today about the contractor’s ability to perform in accordance with this contract, I (‘would’ or ‘would not’) recommend them for similar requirements in the future.”

Given that the primary purpose of the CPARS is to permit other contracting officers to look at past performance as part of their decision process in other procurements, the question becomes, whether a contractor should comment on a CPARS rating. However, if a contractor decides to comment on a CPARS rating, the contractor must also state whether or not the contractor agrees or disagrees with the rating.

There are some obvious situations in which a contractor should always provide a response, such as when the rating is based on incorrect facts (even if the error is apparently in the contractor’s favor). For example, a contractor gets an “Exceptional” and the commentary to support the rating does not relate to the contract being evaluated. There is a strong argument that a contractor must correct such a mistake to avoid any perception of impropriety on the part of the contractor. This would be true for any such similar mistake regardless of the rating.

A contractor should also provide a response if gets a marginal or unsatisfactory rating and it disagrees with the rating. An instance of this may be where the assessing official’s narrative describes situations to support the negative rating in which the contractor was not at fault due to excusable or extenuating circumstances that either the assessing official was unaware of or simply ignored. One example relates to quality. A reseller sells 100 widgets and 10% fail. Upon further investigation by the reseller, it learns that 10 of the widgets came from a different manufacturer than the 90 that did not fail. The reseller promptly replaces the 10 widgets that failed, but is given a “Marginal” for “Quality” anyway. The reseller should disagree with the rating and provide comments in this situation to “correct” the record.

A contractor may also want to provide comments when it gets a “Satisfactory” rating for an element for two reasons. First, although a “Satisfactory” means that a contractor fulfilled the requirements of the contract, there can be a perception issue. The FAR states that, “A fundamental principle of assigning ratings is that contractors will not be evaluated with a rating lower than Satisfactory solely for not performing beyond the requirements of the contract/order.” A contractor that gets just “Satisfactory” ratings may be perceived as a contractor that only follows the letter of the contract. But why is this “bad?” Unfortunately, we live in a time where everyone wants a little bit more – a baker’s dozen (13) for the price of a dozen (12). What is being purchased can also affect how a “Satisfactory” is perceived. If the government is purchasing a large quantity of small dollar widgets or hourly services, then all that may be expected is that the seller provide the widgets in good working order or hours on time and at the agreed upon price. Conversely, when the government is purchasing a complicated weapon’s system, the Government is usually looking for more than just “Satisfactory” ratings for its contractors. It may well be an “unwritten” evaluation criteria that the chosen contractor is willing to go beyond merely “meeting contractual requirements.”

The second reason a contractor may want to comment on a “Satisfactory” rating is “grade inflation.” Although, the CPARS requires the assessing official to provide a narrative with each rating, in some cases, all the assessing official does is put in the rating. When they just put in the rating, they can and frequently will make the rating more than a “Satisfactory,” so no one will object. Thus, a “Very Good” becomes more like a “Satisfactory” and the “Satisfactory” is more like a “Marginal.”

A contractor may want to add comments to the CPARS to “market” itself. Instead of just agreeing with the assessment, the contractor now has 24,000 characters to describe other events that occurred during the performance of the contract that makes it more desirable to other contracting officers. But beware, a little of this type of marketing goes a long way and a lot of this type of marketing could be viewed negatively.

Finally, when should a contractor refrain from commenting? The most obvious situation is where the contractor gets a less than “Satisfactory” rating and the narrative describes fairly accurately why the rating is negative. A contractor will not help itself simply by indicating it does not agree with the assessment without some facts to back up its position. In this situation, the best thing the contractor can do is to read the assessment and then not respond. A contractor may also want to refrain from commenting if it gets a “Satisfactory” or better without a lot of or any narrative and the contractor does not have anything to add to the comments that would potentially lead to an increase in the rating. One of the requirements of the CPARS is that if a contractor disagrees with the assessment, a level above the Assessing Official must review the assessment and essentially give a new assessment. This creates work and if the contractor does not have good facts to potentially lead to a better assessment, the contractor takes a risk that the new Assessing Official will decrease the assessment. This becomes the final assessment, which is only reviewable pursuant to litigation.

For more information, contact MWL Counsel Jody Reed.

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