Federal contractors historically have been powerless to obtain judicial review and revision of flawed past performance evaluations that may haunt them for years. Do two recent COFC decisions pave the way to challenge those evaluations in court? Definitely maybe.
In the span of two weeks, the COFC issued separate decisions holding that contractors' challenges to allegedly flawed past performance evaluations were "claims" under the Contract Disputes Act (CDA), and that the COFC has jurisdiction to review those claims. The question remains, however, what measure of relief the court is capable of providing, given a standard that suggests its inability to grant injunctive relief in the absence of a related claim for monetary damages.
The Boards of Contract Appeals, an alternative venue to appeal a contracting officer's (CO's) final decision under the CDA, have previously concluded that challenges to past performance evaluations are not "claims" over which the Boards have jurisdiction. See, e.g., TLT Constr. Corp., ASBCA No. 53,769, 02-2 BCA ¶ 31969 (2002). The COFC previously exercised jurisdiction over a claim involving a past performance evaluation in Record Steel & Constr., Inc. v. United States, 62 Fed. Cl. 508 (2004), but that claim also involved a request for monetary damages for a constructive change, leaving unclear whether the court would exercise jurisdiction over a claim involving solely past performance issues.
In BLR Group of America, Inc. v. United States, 84 Fed. Cl. 634 (Nov. 25, 2008), and Todd Constr., L.P. v. United States, 2008 WL 5248570, Fed. Cl. No. 07-324C (Dec. 9, 2008), the court rejected the Boards' rationale and determined that a contractor's written request to the CO for revision of a flawed past performance evaluation asserted "a demand . . . seeking, as a matter of right . . . relief arising under or relating to the contract" that was a claim for nonmonetary relief under FAR 52.233-1(c). According to the court, when a contractor's performance evaluation "will be made part of the record upon which its future submissions will be judged, it is entitled to an accurate and fair performance evaluation prepared in accordance with the regulations."
Both decisions pointed to the inequities contractors otherwise face: "This creation of mandatory performance reviews, databases archiving those reviews, and the requirement to consider those archived materials in future contract awards means that a negative review is potentially devastating to a contractor, who may have no opportunity -- or very little opportunity -- to mitigate the impact that review will have on future awards." They cited "sound reasons" to address flawed performance evaluations "as issues of contract performance rather than as part of a bid protest when the contractor seeks future government contracts." Indeed, one driving concern the court noted was that a contractor that challenges past performance in a subsequent bid protest faces a nearly insurmountable standard of review that couples "the greatest deference possible" to the Government with the contractor's "high bar of being able to demonstrate specific prejudice resulting from that erroneous rating."
The court's sound analysis may give contractors helpful backing when negotiating these issues at the CO level, and may in some cases afford a level of review at the contract level that the contractor would not otherwise receive. The court's willingness to exercise jurisdiction over these claims, however, may ultimately be of little solace to contractors if the CO denies the claim. Since the COFC does not have general equity jurisdiction under the Tucker Act, its ability to fashion a viable declaratory judgment or injunctive relief may prevent contractors from achieving an effective remedy at the court. Even if a contractor prevails on the appeal, the absence of effective relief may provide no more than a Pyrrhic victory.
In Todd Construction, the court pointed out that whether or not the court has jurisdiction over the claim was separate from the issue of whether it can provide a remedy, and the jurisdictional issue alone was before the court in both Todd Construction and BLR Group. It appears that the court has the authority to provide "declaratory relief" over these types of claims, but it is unclear what the effect of such a remedy might be, since the court would "be limited to issuing a declaration of rights resolving the parties' nonmonetary dispute." Whether the court also has the ability to remand the past performance evaluation back to the agency with appropriate directions—or additional injunctive authority—over such claims remains for now an open issue. While the Tucker Act, 28 U.S.C. 1491, appears at least to give the court power to remand a matter to the agency "[i]n any case within [the Court's] jurisdiction" even if it may not issue broader specific injunctive relief, the court was unwilling to speculate so much in Todd Construction and required the parties to further brief the remedy issues. (It should be noted, however, that in June 2007, Judge Thomas C. Wheeler of the COFC did issue a temporary restraining order requiring an agency to follow the regulations concerning contractor performance information. See Public Warehousing Co. K.S.C. v. United States, No. 07-366C.)
Another practical concern that may limit the effectiveness of challenging a past performance evaluation via the claims process is time. At least with the claims in Todd Construction and BLR Group, between two and three years has passed since the evaluations at issue were published in government databases, and yet each claim remains in litigation, mired thus far in procedural battles without exploration of the merits of the evaluations. Since past performance evaluations tend to have fading relevance with the passage of time, the COFC's willingness to exercise jurisdiction over these claims may be beneficial in theory, but of limited practical value.
Finally, it bears mention that a contractor must submit a separate written request to the CO that constitutes its "claim." The court agreed with analysis in some Board decisions that the final past performance evaluation is not, itself, a CO's final decision subject to appeal under the CDA. Instead, the contractor must separately challenge that evaluation to the CO in writing; otherwise, there can be no CDA "claim."