Performance Evaluations

In accordance with the Federal Acquisition Regulations1, agencies shall prepare an evaluation of contractor performance for each contract that exceeds the simplified acquisition threshold2 at the time the work under the contract is completed. This requirement does not mean that all contractors are treated equally; rather, contractors must be treated fairly and unbiased.

In addition, there is a firm obligation that the government and the contractor deal with each other in good faith and fair dealings.3 This general obligation of good faith in the performance and enforcement of the contract is generally enforced on both parties. The government encourages an attitude of cooperation by contractors with the government by using past performance evaluations that are fair and unbiased.

The concept of “good faith” emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party.4 This philosophy excludes “bad faith.” Therefore, “subterfuges and evasions violate the obligation of good faith in performance even though the actor believes his conduct to be justified.”5

It is well established that the government, in its “contracting capacity”, is bound by the obligation of good faith in contracting to the same extent as the contractor. The obligation to good faith in contracting is generally for the benefit of both parties.

BLR Group of America, Inc. (“BLR”) provides aviation support services to customers. They were awarded a contract from the Air Force (“AF”) for air traffic management systems. BLR hired a subcontractor to be its chief engineer. After two months, BLR released the subcontractor for what it deemed an inappropriate relationship with the lead AF Quality Assurance Person (“QAP”). Thereafter, the lead QAP wholly failed to cooperate with BLR and actively hindered performance. A few months later, the AF terminated the contract for convenience.

BLR stated that the AF was required to perform an evaluation of its performance using the Contractor Performance Assessment Report (“CPAR”).6 A CPAR was eventually issued but BLR objected to many statements and requested a substantive revision. The AF issued a final CPAR with only a minor change to the Past Performance Information Retrieval Systems (“PPIRS”), but they also included the original CPAR. BLR objected and requested its removal. The AF refused. BLR filed a complaint in the Court of Federal Claims seeking an injunction and removal of the offending CPAR in BLR Group of America, Inc. vs. the United States, No. 07-579C November 25, 2008 after filing two (2) requests with the assessing official and receiving a denial.

The Court concluded that BLR was seeking non-monetary relief arising under or related to the contract7 and further, that it had properly asserted entitlement to relief under

the contract on a legal basis while not asserting a contractual provision as a “matter of right.” The Court noted that both the FAR8 and the AF Regulations9 require agencies to prepare a performance evaluation of contractor performance when the work under contract is completed. The principal purpose of preparing and submitting the CPAR is to provide accurate and unbiased information about a contractor’s performance.10 Since BLR filed its complaint to the Contracting Officer (“CO”), who failed to respond, it met the requirement to file the appeal as a “matter of right” because the claim was subject to the Contract Disputes Act (“CDA”).11 The Court concluded that BLR had submitted a valid claim under the CDA.

The Court stated that “allowing a contractor to challenge a performance evaluation in the Court of Federal Claims is in complete harmony with the overall jurisdictional scheme fashioned by Congress.” Therefore, the Court had the authority to adjudicate all claims founded upon any act of Congress, such as the CDA.12

The Court concurred that the only viable option for BLR was to “challenge an allegedly unfair and inaccurate performance evaluation as a contract-performance claim under the CDA” to avoid being bound to an “inaccurate performance evaluation for unspecified – possibly lengthy – period of time.” Thus, the Court agreed that it was “imperative to quickly address and correct an erroneous performance evaluation.”

The Court stated “In sum, a contractor’s claim requesting a change to a performance evaluation is not a meaningless act. To the contrary, such a claim is a proper mechanism, and provides the proper jurisdictional predicate, to challenge an adverse performance evaluation in the Court of Federal Claims.” Because the Court stated that BLR filed a non-monetary claim in accordance with the CDA, and the CO failed to make a decision so the claim was “deemed denied,” hence, BLR was allowed to pursue its claim appeal.

The moral of the story is that the Government and the contractor must deal with each other in good faith and fair dealing. In the world of government contracts, if the Government fails to perform its obligations then you should pursue a claim; conversely, if you fail to perform according to your obligations the Government can file a claim against you. Protect Yourself!! Always deal with the other party fairly and in good faith, and if the other party fails to reciprocate, then pursue a claim vigorously.

Tom Petruska, Owner
Contracts Unlimited, Incorporated

The foregoing is not a legal opinion nor provides legal advice. You should consult your attorney for legal services.

Footnotes:

1. FAR 42.1502(a)

2. $100,000

3. Article 205 Restatement 2nd, Contracts and Sections 1-203 Uniform Commercial Code (“UCC”)

4. Article 205 Restatement, Second Contracts

5. id

6. FAR 42 1502(a) requires agencies to prepare such a report.

7. FAR 52.233-1

8. FAR 42.1502(a)

9. Air Force Federal Acquisition Regulations Supplement (“AFFARS”) 5342.1503

10. CPARS Policy Guide

11. 41 U.S.C. 405(c)(1)

12. 41U.S.C. 601-613

Contracts Unlimited, Inc. | 1114 Fairfax Pike, Suite 12 | White Post, Virginia 22663-1882
Phone: (877) 327-3812 | Fax: (877) 327-3814
Copyright © 2004-2011, Contracts Unlimited, Inc. All Rights Reserved.