For government contractors, a Contractor Performance Assessment Reporting System (CPARS) rating can make or break future opportunities. But how objective are these ratings? A recent ruling[1] by the Armed Services Board of Contract Appeals (Board) sheds light on a crucial reality—CPARS ratings are not purely fact-based assessments; they’re the government’s opinion on contractor performance.
The Case: A Battle Over CPARS Ratings
St. Michael’s Inc. (SMI) challenged three CPARS ratings issued by the Defense Logistics Agency (DLA), arguing that the ratings were unfair. The dispute centered on staffing shortages. SMI claimed that since the contract didn’t require specific staffing levels and the agency wasn’t negatively impacted, the ratings were arbitrary. DLA, however, stood by its assessment, and the Board ultimately ruled in its favor.
The Key Takeaway: CPARS Ratings Are Subjective
One of the most significant aspects of this ruling is the Board’s clear stance on how CPARS ratings are determined. While CPARS guidance suggests that ratings should be fact-based and objective, it does not establish rigid criteria for individual scores. Instead, the Board noted that CPARS guidance explicitly allows for subjective judgment, using language like “may,” “should,” and “subjective” throughout.
In other words, a CPARS rating isn’t just a factual performance evaluation—it’s the contracting agency’s opinion based on its interpretation of events during performance.
Why This Matters for Contractors
1. Expired CPARS Ratings Cannot be Revised
The Board found that once a CPARS rating expires, it becomes inaccessible and unchangeable. This means that even if a contractor successfully challenges a rating after it expires, there is no mechanism to revise it.
2. Agencies Have Discretion in Determining the Impact of Performance Issues
The ruling demonstrates that agencies have significant leeway in deciding whether and to what extent a particular event had a negative impact on their operations—and whether that impact justifies a negative rating. Even if a contractor believes an issue had little or no effect, the agency’s subjective assessment can still drive the final rating.
3. Subjectivity in Ratings Means Proactive Relationship Management Is Key
Since CPARS ratings involve agency discretion, maintaining strong communication with contracting officers throughout performance can help mitigate the risk of negative, opinion-driven ratings.
4. Keeping Detailed Performance Records Is More Critical Than Ever
Given the Board’s ruling, contractors should proactively document their performance to ensure they can counter subjective CPARS ratings with clear, objective evidence. Maintaining thorough records of deliverables, compliance with contract terms, and agency communications can help contractors prove they met or exceeded requirements, potentially heading off unjustified negative ratings before they are finalized.
Final Thoughts: What Contractors Should Do Now
This case underscores an uncomfortable truth—contractors are not just being judged on objective performance metrics; they’re being evaluated through the lens of government perception. The best defense? Stay engaged with contracting officers, document performance diligently, and challenge questionable ratings before they become permanent.
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[1] Appeals of St. Michael’s Inc., ASBCA No. 62226, ASBCA No. 62271 (Jan. 29, 2025).
