CPAR Challenge Wasn’t A Viable “Protest,” Says Federal Court

A contractor’s attempt to challenge an adverse Contractor Performance Assessment Report was not a bid protest subject to the bid protest jurisdiction of the U.S. Court of Federal Claims.

In a recent decision, the Court rejected a protester’s creative attempt to challenge a CPAR as part of a bid protest.  Instead, the Court held, a CPAR ordinarily must be challenged through the FAR’s claims and appeals processes–although the Court appeared to leave the door open to bid protest challenges in limited circumstances.

The Court’s decision in ITility, LLC v. United States, No. 15-237C (2016) involved a past performance evaluation ITility, LLC received from the U.S. Air Force under a program management support contract.  After various disputes arose, the Air Force issued a stop work order and allowed the period of performance to expire.  The Air Force subsequently issued an interim CPAR report concerning the contract.  The CPAR presumably rated ITility’s performance negatively (the actual rating is redacted from the Court’s decision).

As was its right, ITility filed comments on the interim CPAR, stating that the rating was erroneous and that the Air Force was to blame for the issues that had arisen under the contract.  After reviewing ITility’s comments, the Air Force issued a final version of the CPAR, which softened some of the original language, but did not amend the actual ratings.

ITility then filed a bid protest complaint in the Court.  ITility alleged that the CPAR was inaccurate and would harm ITility’s competitive standing in pending procurements.  ITility alleged that it had submitted 11 pending proposals worth approximately $200 million and intended to submit proposal in response to 27 additional solicitations worth as much as $1.5 billion, all of which would involve the consideration of past performance.  ITility sought an injunction preventing the Air Force from continuing to publish the CPAR, and to enjoin the agencies to which ITility had submitted pending bids from reviewing the CPAR.

The government filed a motion to dismiss, arguing that the matter was outside of the Court’s bid protest jurisdiction.  The government contended that ITility’s complaint was not truly a bid protest, but rather a complaint about the administration of the Air Force contract–a matter to be resolved under the FAR’s claims and appeals procedures.

The Court wrote that its jurisdiction over bid protests “does not extend to complaints of contractors concerning the administration of contracts they have been awarded and performing.”  The Court explained that “[w]hen a party objects to a decision by a federal agency that was made because that party was a government contractor, and not because the party was an offeror for a contract to be awarded, the matter is properly viewed as” seeking relief under the FAR’s claims processes, rather than presenting a bid protest.

The Court wrote that it is “beyond doubt” that a contractor can challenge an adverse CPAR under the Contract Disputes Act, or CDA, which governs claims.  In this case, ITility’s “challenges to the substance of the Air Force CPAR involve questions of contract administration that must be brought under the CDA.”  And since ITility “had not submitted a claim to the contracting officer under the CDA’s requirements . . . our court lacks subject-matter jurisdiction over the first two counts of the complaint.”

The court then addressed ITility’s third count–the one involving the use of the CPAR by other agencies.  The Court wrote that “instead of alleging that the CPAR has been relied upon to its detriment, ITility discusses prospective use only,” using wording such as it “would be arbitrary and capricious” for an agency to rely on the CPAR.  The Court continued:

In sum, the use of a CPAR by a procuring agency may not be challenged before it has actually been used.  ITility has alleged no assessment of its ability, in a contract award competition, that relied upon the Air Force’s CPAR to its detriment.  Accordingly, the claims in court three of the complaint are not ripe for review, and must be dismissed for lack of subject-matter jurisdiction.

The Court granted the government’s motion to dismiss.

It is little wonder that a contractor like ITility would seek to use the Court’s bid protest jurisdiction to challenge an adverse CPAR.  After all, the ordinary CDA claims process can take months to pursue, whereas an injunction can be issued in a matter of days in a bid protest.  And, as ITility apparently argued in its filings, it is not even clear under applicable legal authority whether a court may enjoin an agency, as part of a CDA action, from publishing or relying on a certain CPAR.

But while the Court left the door open to consider a challenge to a CPAR where that CPAR has been actually relied upon by an agency in a particular procurement, the ITility case confirms that a CPAR ordinary cannot be challenged through the bid protest process.  Instead, as cumbersome and time-consuming as it may be, a CDA challenge remains the primary legal option to challenge an adverse CPAR.

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