Have you ever received a negative CPARS that you felt was unjustified?  Did that negative CPARS cause you to lose other contract awards?  That is what happened to the contractor-protester in Colonna Shipyard, Inc. v. U.S., a recent post-award protest case heard before the Court of Federal Claims.  Unfortunately for the protestor in that case, the Court found that a bid protest was not an appropriate time to challenge the CPARS, and, therefore, partially dismissed the protest.

A little background: Colonna Shipyard had submitted a proposal in response to a Navy Solicitation relating to dry-docked phased maintenance of the USNS Prevail.  When the agency evaluated Colonna’s proposal, it reduced Colonna’s past performance rating based on a negative CPARS that had been issued to Colonna in connection with another Navy contract relating to maintenance on the USNS Narragansett.  Ultimately, the agency awarded the Prevail contract not to Colonna, but to its competitor Lyon Shipyard Inc. 

After a flurry of different filings (we won’t go into the tortured procedural history here), Colonna filed a bid protest before the Court of Federal Claims, challenging the award of the Prevail contract to Lyon.  Colonna challenged the award based primarily upon the fact that the agency had justified the source selection decision by relying on the negative CPARS, which Colonna argued was full of misinformation and false statements.  Colonna’s bid protest complaint had four counts: (1) Bid Protest; (2) Breach of Contract; (3) Breach of the Covenant of Good Faith and Fair Dealing; and (4) De Facto Debarment.  The Agency moved to dismiss on jurisdictional grounds, arguing that the bid protest was, in reality, nothing more than a CPARS challenge, and that such challenges were appropriate only as Contract Disputes Act (CDA) Claims, and not as bid protests. 

For the most part, the Court agreed with the agency.  Even though Colonna styled Count I of its action as a “Bid Protest,” it focused on the protestor’s argument concerning the “correction” of the negative Narragansett CPARS.  The Court explained that it lacked jurisdiction to correct the CPARS.  Therefore, the Court dismissed Count I of the complaint.  Similarly, the Court found that the Breach of Contract claim (Count II) was a CDA claim outside the jurisdiction of the Court, and that the De Facto Debarment claim (Count IV) was, again, nothing more than a challenge to Colonna’s CPARS, which was also a CDA claim, not a bid protest claim.  Accordingly, Counts II and IV were also dismissed. 

With regard to the Good Faith and Fair Dealing claim, though, the Court felt a little differently.  Although the protestor’s argument on this court included allegations concerning the Agency’s bad faith in issuing the negative Narragansett CPARS, the allegations were not limited to CPAR-related issues.  The Court emphasized that Colonna had also alleged that the Agency acted in bad faith in evaluating the Prevail proposals, and that there may have been a conflict of interest.  The Court reasoned that there was “no jurisdictional impediment to Count III of the complaint, as long as the focus is on the bad faith actions which allegedly compromised the award of the Prevail Contract, rather than on alleged bad faith actions related to the issuance of the CPAR.”  In other words, the Good Faith claim was allowed to proceed – but only with regard to the allegations that related to the agency’s purported misconduct during source selection; the Good Faith arguments relating to the CPARS were thrown out.

So, what can contractors learn from this convoluted case?  Several things:

1. If you get a negative CPARS that you think is illegitimate or unjustified, you want to challenge it as soon as possible, and in any case, before it has the ability to negatively impact your ability to get other contract awards. That may include responding to the CPARS evaluation within the system itself, filing a claim to the Contracting Officer, or even initiating an action before the COFC or the Boards of Contract Appeals. 
2. Be aware of what you can – and can’t argue – as part of a protest. Obviously, as this case shows you, arguments based on “correcting” a prior negative CPARS are a no-go (whether you style them as a “bid protest”, a Good Faith claim, or a debarment claim.)  But that does not mean that you cannot challenge an agency’s improper evaluation of your past performance.  Plenty of protests involve arguments about whether an agency properly evaluated contractors’ CPARS and overall performance history.
3. Be aware that arguments concerning good faith and fair dealing are a powerful tool, both in the CPARS context and elsewhere. However, it is critically important that you understand the difference between the types of Good Faith arguments that belong in a bid protest (allegations concerning improprieties in source selection) as opposed to the type of Good Faith arguments that belong in a CDA claim (allegations concerning misconduct in administering a contract, or paying or evaluating a contractor).