Overview
FAR 42.1503 prescribes the mandatory processes, responsibilities, and standardized criteria for evaluating contractor performance and documenting that information in the Contractor Performance Assessment Reporting System (CPARS). It establishes a transparent framework for government-contractor communication, including specific rating scales and rebuttal procedures, to ensure past performance data is objective and available for future source selections.
Key Rules
- Responsibility: Agencies must assign specific roles for evaluations; if no individual is designated, the Contracting Officer (CO) remains responsible for the evaluation function.
- Evaluation Factors: Evaluations must, at a minimum, address Technical Quality, Cost Control (not required for FFP), Schedule/Timeliness, Management/Business Relations, and Small Business Subcontracting (where applicable).
- Standardized Rating Scale: Agencies must use a five-point adjectival scale—Exceptional, Very Good, Satisfactory, Marginal, and Unsatisfactory—supported by narratives that meet the specific definitions found in Tables 42-1 and 42-2.
- Contractor Rebuttal Period: Contractors are afforded 14 calendar days from the date of notification to submit comments, rebutting statements, or additional information regarding the evaluation.
- Level-Above Review: In cases of disagreement between the contractor and the CO, the agency must provide a review by an official at a level above the CO, though the final conclusion remains the agency's decision.
- Reporting Timelines: Evaluations (and contractor comments) become available to source selection officials within 14 days of the initial notification. Negative performance data, such as terminations for cause or default, must be reported to FAPIIS within 3 calendar days.
- Data Currency: Past performance information is generally relevant for three years after contract completion, except for construction and architect-engineer contracts, which are relevant for six years.
Practical Implications
- Tight Turnarounds: Contractors must have internal processes ready to review and respond to CPARS notifications within the 14-day window, as evaluations become visible to other government agencies' source selection officials even if a rebuttal is pending.
- Documentation is Paramount: Because ratings higher than "Satisfactory" require proof of significant benefits and ratings lower than "Satisfactory" require proof of specific failures and government notifications, both parties must maintain detailed performance records throughout the life of the contract.
- Subcontractor Management: Large businesses face significant reputational risk if they fail to meet small business subcontracting goals or have a history of unjustified late payments to small business subcontractors, as these must be specifically documented and rated.