Contractor Performance Assessment Reports (CPARs) are a critical currency in the world of government contracting—shaping future awards, past‐performance evaluations, and a contractor’s reputation. Positive assessments can help contractors secure future work with the government, while even a single marginal or unsatisfactory rating can ripple across future procurements, damaging a contractor’s competitive standing for years. When a contractor receives a negative CPAR, it must act quickly to correct issues with the ratings and recommendations before government customers rely on the negative CPAR to the contractor’s detriment.
That’s why the recent decision in SLSCO, Ltd. v. United States, No. 24-447C (Fed. Cl. June 24, 2025), is so important. The Court of Federal Claims (COFC) tackled the boundaries of CPAR challenges and clarified when procedural flaws, government discretion, and agency obligations rise to the level of a legal claim.
In this blog, we help you understand what happened, what the contractor argued, and what this case means for your business when faced with a negative CPAR.
The Case in Brief
SLSCO, Ltd. had a contract with the U.S. Army Corps of Engineers (USACE) to build 46 miles of border fencing in New Mexico. Due to delays from environmental litigation, USACE modified the schedule and then eventually terminated the contract for convenience in 2021.
USACE initially gave SLSCO a “Marginal” rating under every evaluation criterion in a CPAR covering the first year of performance, but then vacated the CPAR after pushback from SLSCO. Rather than issue a new CPAR for the first year of performance, the agency issued a consolidated CPAR for the entire two-year performance period. That report gave SLSCO a mixed bag:
“Unsatisfactory” for Schedule;
- “Marginal” for Quality, Management, and Regulatory Compliance; and
- “Satisfactory” for Small Business Subcontracting.
SLSCO challenged the CPAR through a Contract Disputes Act (CDA) claim. While some ratings were adjusted, the “Marginal” scores for Quality and Management remained. SLSCO then sued under the Tucker Act and the CDA in the COFC. The Court ultimately dismissed the case, holding that SLSCO lacked standing with respect to its procedural challenges and failed to state a claim with respect to its challenges to the ratings.
What the Contractor Argued Was Wrong with the CPAR
SLSCO made several pointed claims—some of which will sound familiar to many contractors:
- Late Issuance & Overbroad Coverage: The CPAR impermissibly covered a two-year period of performance and was issued “woefully late” with respect to the performance periods at issue, robbing SLSCO of real-time feedback and course correction opportunities.
- Unsupported Ratings: The “Marginal” Schedule rating ignored USACE’s own unilaterally imposed delays, and the “Marginal” Quality rating lacked supporting detail.
- Failure to Consider Contract Modifications: The CPAR didn’t reflect the government’s own changes to scope and schedule, or the termination for convenience.
- No Meaningful Opportunity to Rebut: SLSCO claimed it wasn’t given a fair chance to respond before the CPAR was finalized.
The court acknowledged the contractor’s frustration but drew a hard line on what qualifies as a legal claim the Court will consider.
Key Legal Takeaways For Contractors
- Procedural Challenges Require Demonstrable “Prejudice” to Establish Standing: “Timeliness” errors—such as missing procedural deadlines, failing to issue annual CPARs on time, or covering only a single performance year—are considered minor procedural violations, not “fundamental procedural rights.” Thus, to establish standing, a contractor must plead and prove actual prejudice—i.e., show that, but for the procedural misstep, there was a substantial chance the outcome would have been different.
In SLSCO, the Court held that claims asserting the contractor merely lost the opportunity to correct the issues or the ability to respond to the government’s concerns earlier (e.g., “deprived…of the ability to address…deficiencies in future review periods” or “hindered…ability to protect its rights”) are too speculative. Absent facts showing that, but for the government’s procedural violations, the contractor likely would have obtained a different rating or experienced tangible harm, such procedural claims will be dismissed for lack of standing.
Takeaway: If you’re challenging a late-issued or multi‑year CPAR, be prepared to allege with specificity how the delay or over‑broad coverage caused you concrete harm—such as a demonstrable lost award, or how you would have achieved a measurably different past performance rating had the procedural missteps not occurred.
- FAR 42.15 Isn’t Automatically “Incorporated” into Every Contract: SLSCO argued that by entering its contract, the government implicitly promised to comply with FAR 15’s requirements for issuing CPARs—making any departure by the government a breach of contract. The Court disagreed and concluded that the government owed Plaintiff no contractual duty to provide a CPAR, “fair or otherwise.”
Takeaway: Review your solicitations and award documents carefully. If compliance with specific CPAR processes matters to you, as it should to all contractors seeking further business with the government, seek to incorporate those requirements contractually (e.g., via a tailored clause or solicitation provision), rather than relying on FAR references alone. Absent an express contract clause incorporating the CPAR regulations, contractors cannot treat FAR 42.15 as a standalone contractual obligation. Also, be mindful of the fact that many of the processes and protocols for CPARs are in CPARS Guidance documents and not the FAR itself.
- Ratings Are Reviewed Under a High Bar: “Abuse of Discretion”: Courts won’t second-guess a CPAR unless the rating is clearly unreasonable. While CDA claims are reviewed without giving deference to the previous decision, the Court still defers to an agency’s discretion in assigning CPAR ratings. Unless the agency had no reasonable basis for the assessment, the rating and recommendation will stand.
Takeaway: Don’t just argue that a rating and/or recommendation is unfair—build a factual record. Document contract performance, correspondence, and evidence showing the government’s rating was objectively wrong or based on erroneous facts.
- Good Faith and Fair Dealing Claims Have Limits: SLSCO tried to invoke the implied covenant of good faith and fair dealing (and its attendant duty to cooperate), which is a duty inherent in every government contract, arguing that a “procedurally and substantively deficient CPAR” undermined the contractor’s reasonable contractual expectations. But because those duties must be tied to express contract terms—and here the only alleged wrong was non-compliance with FAR or DOD guidance, which were not expressly incorporated into the contract—the Court dismissed these claims. In short, no explicit contractual obligation = no duty = no claim.
Takeaway: Implied duties won’t rescue you. Anchor any claims to clear contract language or risk dismissal as a result of the claim being “untethered” to the contract.
Practical CPAR Strategy Moving Forward
The SLSCO case is a harsh reminder that not every unfair CPAR will result in a winning legal claim. But it also provides a roadmap for contractors who want to challenge flawed evaluations or avoid them altogether:
- Preserve Evidence During Performance: Document delays, modifications, and communications during performance, as well as evidence of harm based on any negative performance assessments. Do not wait until you receive a deficiency notice to start tracking impacts to your performance. These details matter if ratings later seem unfair.
- Negotiate CPAR Protections Up Front: Don’t assume the FAR or CPARS Guidance documents apply—ask for them to apply specifically to your contract.
- Respond Thoroughly to Draft CPARs: CPARs first appear in draft status, giving contractors time to challenge the ratings before they become available to other procuring officials. Use the agency comment period to timely advocate your position, create your record, and potentially nip the harmful CPAR in the bud.
- Focus on Measurable Harm: Especially if you’re considering legal action.
If you need help crafting a strategic response or challenging an unfair CPAR, please contact Sam Finnerty, Lauren Brier, Eric Valle, or another member of PilieroMazza’s REAs, Claims, and Appeals or Government Contracts practice groups.
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