ASBCA Opens the Door to Contractors Seeking Monetary Damages for Unfair CPARS Reviews
As past performance reviews become an increasingly important part of the bid evaluation process, the performance assessments catalogued in the Contractor Performance Assessment Reporting System (“CPARS”) will have greater significance than ever before. CPARS reviews generally set forth the Government’s evaluation of a contractor’s performance based on several factors, including quality of performance, adherence to performance schedule, cost control, and management capabilities. While each assessment is theoretically based on objective facts and data, it is not unheard of for contractors to receive biased, inaccurate, or misleading evaluations. These unfair assessments can substantially damage a contractor’s prospect for securing future Government contract awards, but contractors currently have limited avenues to address them.
The strongest remedy available in recent years has been a declaration from the Armed Services Board of Contract Appeals (“ASBCA”) or the Court of Federal Claims (“COFC”) that the evaluation was arbitrary and capricious together with a remand to the contracting officer with “proper and just” instructions, but this remedy does not necessarily scrub the negative review from CPARS. However, the ASBCA may have left the door open for a new type of remedy available to contractors who receive an unfair CPARS assessment.
In Government Services Corporation, ASBCA No. 60367, 16-1 B.C.A. ¶ 36411, the contractor submitted a certified claim to the contracting officer in the amount of $100,000, alleging that a negative CPARS rating it received constituted bad faith and a breach of the duty of good faith and fair dealing. Interestingly, the amount of the contractor’s certified claim was based on the estimated future administrative and legal expenses that would be required to counter the negative impact of the review. When the government failed to issue a final decision in response to the contractor’s claim, the contractor appealed this deemed denial to the ASBCA.
The Government moved to dismiss for lack of jurisdiction, arguing that the contractor’s claim did not include a “sum certain” because it had failed to state “a mathematical basis for any portion of its $100,000 claim or assign a specific dollar value to any component thereof.” The ASBCA denied the government’s motion, specifically concluding:
The Board has repeatedly held that use of estimated or approximate costs in determining the value of a claim is permissible so long as the total overall demand is for a sum certain…. That the $100,000 figure was derived from estimated costs does not change the fact that it was a total overall demand for payment of a specific dollar amount, and as such, meets the FAR’s requirement that a monetary claim be for a sum certain.
While the Board merely retained jurisdiction rather than settling the merits of the case, its opinion at least allows for the possibility that contractors may be able to obtain monetary damages from the Government as relief for an unfair negative CPARS review. As usual, we will monitor this situation going forward.