Thursday, March 22, 2012


Yes, there is a judicial remedy if you are aggrieved by a negative performance evaluation. The Court of Appeals for the Federal Circuit (CAFC) handed down an opinion today affirming an opinion by the Court of Federal Claims (COFC) that it had jurisdiction to hear a complaint that a contractor had been wronged by a negative performance evaluation. Jurisdiction was based on the Contract Disputes Act (CDA) which also gives jurisdiction for such claims to the Armed Services Board of Contract Appeals (ASBCA) and the Civilian Board of Contract Appeals (CBCA). Thus, you also can go to the Boards for redress.

But be wary. Todd Construction ended up losing the case. It tried to get the court's attention on procedural (due process type) issues but failed because it could not show that it was prejudiced by a significant procedural error. That is, it failed to show that but for the error, it would have taken curative action or that the performance evaluation would have been different. Todd therefore lacked standing to sue with respect to the procedural violations.

Todd then tried to show the government acted arbitrarily and capriciously in assigning an inaccurate and unfair performance evaluation. However, Todd admitted that some of the performance problems were not the government's fault but were instead caused by Todd's subcontractors. Don't forget, the prime contractor is not excused unless the subcontractor also has encountered excusable causes of nonperformance. Todd was just blaming subcontractors. The CAFC said: "To raise a plausible inference that the ratings were arbitrary and capricious, the contractor would, at the very least, need to allege facts indicating that all of the substantial delays were excusable."

The teaching of the case is that you can seek judicial relief from negative performance evaluations. But you had better be sure your failure to perform is excusable. And, don't forget, all compensable changes are excusable causes of delay and failure to perform.

This reaffirmation of the jurisdiction of judicial tribunals under the CDA to grant declaratory relief suggests some creative approaches to contract administration. If you have a dispute of significant importance regarding interpretation of the contract, interpretation of regulations relating to the contract, propriety of termination for default or for that matter nearly any dispute relating to the contract and your contracting officer stonewalls you, consider certifying a claim for declaratory relief and demand a final decision. Avail yourself of the disputes clause mechanism early to provoke a response and if necessary, get the matter before a judge. And, don't forget alternative disputes resolution (ADR). Judges can act as mediators even if the case is not officially before the tribunal.

No comments:

Post a Comment