Infotech and the Law: Negative performance review? You now have relief

Jonathan Cain

For the past 10 years, the Federal Acquisition Regulation has required formal evaluations of contractor performance, which have become an inherent part of source selection decisions. It is remarkable, then, that given the importance of these evaluations, contractors have been powerless to challenge unfair or punitive reviews -- until now, thanks to the U.S. Court of Federal Claims.

Since 1995, for contracts worth more than $1 million, and since 1998 for contracts worth more than $100,000, contracting officers must submit reviews of contractor performance to federal databases. The evaluation is to rate each contractor at the end of a contract, or annually in multiyear deals, on factors such as conformance to requirements and workmanship standards, its record of cost forecasting and control, and adherence to schedules. Evaluations are kept for three years and must be checked before the contractor wins another contract.

These relatively objective measures are widely accepted, but contracting officers also rate companies on subjective criteria -- a contractor's "reasonable and cooperative behavior" or "commitment to customer satisfaction" -- that are subject to abuse.

The contracting officer must give a copy of the evaluation to the contractor. A contractor that disagrees with an evaluation, has the right to have a challenge put in the file to balance any negative statements. But including subjective evaluation factors at all has given many contractors cause for concern about disputing a negative evaluation, fearing the challenge will result in even more negative comments on the charge of being "difficult."

Contractors that have received negative performance evaluations know the frustration of having no effective way to correct an inaccurate or punitive evaluation. A contractor's response may be put in the file, but there is no assurance that other contracting officers will give any credence to such attempts at correcting the record. This fact also may chill a contractor's willingness to aggressively pursue related monetary claims in disputed cases, for fear of being tagged "uncooperative" or indifferent to the customer's welfare.

In previous cases, boards of contract appeals have decided they do not have jurisdiction to consider a contractor's challenge to a critical past performance evaluation. This gave the contractor no way to protect its reputation.

In October, the U.S. Court of Federal Claims provided an avenue for relief. The court held that it had jurisdiction to enter a declaratory judgment under the Contract Disputes Act (CDA) that a past performance evaluation was erroneous and had to be corrected by the contracting agency.

The contractor had taken steps to preserve its right to have the evaluation corrected. It had given the agency a timely written response to the negative evaluation and, citing grounds in the response, asked that the agency correct the evaluation.

The court concluded that this timely written response, while it did not seek monetary relief, was a "claim" related to a contract under the CDA, and that the government's failure to grant the relief entitled the contractor to bring the matter to the court.

This decision means it's even more important now to review and respond promptly and carefully to negative past performance evaluations. A contractor should request that the contracting officer correct a poor evaluation and provide facts to support the request. In significant cases, a formal claim in court may be justified.

Jonathan Cain is a member of the law firm Mintz Levin Cohn Ferris Glovsky & Popeo PC in Reston, Va. The opinions expressed in this article are his. He can be reached by e-mail at jcain@mintz.com.

About the Author

Jonathan Cain is a member of law firm Mintz Levin.

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