GovCon OnDemand FAR Council Proposes to Eliminate Contractor Right to Agency Appeal of Past Performance Evaluations
The FAR Council is engaged in a revision of the FAR's provisions governing Past Performance assessments. Most of these changes appear to have positive effects for contractors. But one, the revision of FAR 42.1503 to eliminate a contractor's right to internal agency appeal of past performance evaluations, has potentially detrimental and costly implications.
This brief, informative GovCon OnDemand videocast discusses what it could mean for contractors if the avenues for formal litigation of these claims are opening, just as the avenue for less formal administrative resolution under the FAR may be closing.
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The current FAR includes the requirement that "Agencies shall provide for review at a level above the contracting officer to consider disagreements between the parties regarding the evaluation" (FAR 42.1503(b).
Thus, during the course of performance, a contractor disappointed with its performance rating has a FAR-approved administrative avenue by which to raise questions about its current performance evaluations, without resorting to formal litigation.
This has been called a contracting best practice:
- Bannum, Inc. v. U.S., 404 F.3d 1346, 1351 (Fed. Cir. 2005)
- OFFP Policy Letter 92-5 § 7(a)(3) (OFFP Dec. 30, 1992)
However, the FAR Council has proposed the elimination of the right of a contractor to appeal past performance evaluation directly to the issuing agency:
- FAR Case 2012-009
- FR 54864-54872
If the FAR Council eliminates this avenue of internal agency appeal, a contractor will have only two choices:
- Accept the finding, or
- Pursue formal litigation at the Boards of Contract Appeals or the Court of Federal Claims.
In previous years, such formal litigation has been rare, but that may be changing.
Boards of Contract Appeals: Traditionally the Boards of Contract Appeals denied all performance evaluation appeals. However, recent Board decisions have ruled the Board will hear such claims under specific contract provisions. [See, e.g., Sundt Constr., Inc., ASBCA No. 56293, 09-01 BCA ¶ 34084 (2009).]
Court of Federal Claims: In 2011, the Federal Circuit squarely confirmed the jurisdiction of the Court of Federal Claims to hear challenges to past performance evaluations. [Todd Construction, L.P. v. United States, 656 F.3d 1306 (Fed.Cir. 2011).] The Federal Circuit found that performance evaluations are intrinsic to the performance under the contract, whether or not the contract contains explicit terms relating to them.
What are the implications?
- Courts are opening, just as the FAR Agency recourse may close down.
- Likely to increase the volume of such litigation.
- Negative impact on "economy and efficiency" of the past performance evaluation system.
To learn more about how these issues may affect your company or if you have any questions, please contact:
Stuart W. Turner
+1 202.942.5759
Lauren J. Schlanger
+1 202.942.6808
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