Ask many government contractors, and they’ll tell you that even a single negative report in the Contractor Performance Assessment Reporting System can have a powerful adverse impact on winning future prime contracts.

Given the importance of these performance reports, it’s little wonder that a contractor on the receiving end of a negative CPAR may want to ask a judge to review the matter. But as one recent case demonstrates, a contractor cannot challenge a CPAR with a judge until the contractor has followed the FAR’s claims process.

The decision of the Armed Services Board of Contract Appeals in SkyQuest Aviation LLC, ASBCA No. 62586 (2021), involved a contract between the Air Force and SkyQuest Aviation LLC. Under the contract, SkyQuest was to provide “functional check flight pilot, flight engineer, and related services in exchange for $429,000.”

After performance began, a dispute arose as to whether the contract required that pilots possess a certain certification. The parties were unable to resolve the dispute and the Air Force terminated the contract for cause.

After termination, the Air Force apparently issued a negative CPAR to SkyQuest. SkyQuest then filed an appeal with the ASBCA. In its appeal, SkyQuest requested, in addition to monetary relief, that the ASBCA: (1) remove the termination for cause; and (2) direct that the CPAR be removed, corrected, and resubmitted.

The ASBCA wrote that, under the Contract Disputes Act, “we only possess jurisdiction over an appeal of a claim if a contractor presented that claim to the [Contracting Officer].” A claim, in turn, is defined in FAR 52.233-1 as a “demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to [the] contract.”

When a contractor seeks to overturn a termination for default or cause, the contractor need not first file a claim with the Contracting Officer because a termination for default or cause “is a government claim not subject to CO presentment under the CDA.” Accordingly, the ASBCA held, SkyQuest “did not need to present” its argument to the Contracting Officer before seeking to overturn the termination for cause.

But the challenge to the CPAR was a different story. Unlike a termination for cause or default, a CPAR is not a “government claim.” Therefore, the ASBCA wrote, “[w]e only possess jurisdiction over a CPAR claim if the contractor presented to the CO a valid claim–i.e., a written demand or assertion seeking, as a matter of right, an adjustment to the CPARS rating.”

The ASBCA wrote that there was no “evidence in the record that [SkyQuest] presented a written demand or assertion seeking, as a matter of right an adjustment to the CPAR.” Therefore, the ASBCA held, it did not have jurisdiction over SkyQuest’s CPARS claim. The ASBCA dismissed that portion of SkyQuest’s appeal.

After receiving a negative CPAR, it might seem a little silly to present a formal claim to the same Contracting Officer who just wrote (or agreed with) that CPAR. Strange as it may seem, though, it’s what the FAR requires–first a claim to the Contracting Officer, and only then (if the claim is denied or deemed denied), an appeal to a judge.

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