Every seasoned government contractor knows the weight a negative Contractor Performance Assessment Report (CPAR) can carry. A blemish in the CPAR System (CPARS) can mean the difference between winning a new contract or losing to a competitor—regardless of price or technical merit. Therefore, when agencies issue a negative CPAR that seems unfair or unfounded, contractors understandably seek more than just the opportunity to respond—they want recourse. A recent decision from the Armed Services Board of Contract Appeals (ASBCA) offers insight into what that recourse might look like—and where its limits lie.
CPAR: The Stakes and The Process
CPARS is the official record of a contractor’s past performance on federal contracts, and agencies generally consider that information during future source selections. When a CPAR is completed, contractors may comment on each evaluation criterion and indicate whether they concur with the agency’s evaluation. If the agency refuses to revise a disputed CPAR, a contractor can file a certified claim with the contracting officer challenging the CPAR and, if denied, appeal to the applicable Board of Contract Appeals or the U.S. Court of Federal Claims.
Critically, while Boards and courts cannot directly revise a CPAR, they can find that the evaluation was improper and direct the agency to re-evaluate the contractor. In some cases, a contractor may be awarded monetary damages if the improper CPAR caused harm.
Sungwoo: A Test Case for Damages
In Appeals of Sungwoo E&C Co., Ltd, ASBCA No. 61144[1] (June 3, 2025), the contractor challenged several unsatisfactory CPAR ratings received under a general construction MATOC (Multiple Award Task Order Contract). The agency cited performance issues and, based on those ratings, declined to exercise option years. Sungwoo sought two forms of relief: (1) reversal of the negative CPARS and (2) monetary damages for lost work due to the agency’s refusal to award additional contracts and exercise options.
The ASBCA denied both. It found the agency’s CPAR evaluations were not arbitrary or capricious, pointing to “[o]verwhelming record evidence” of performance failures. Because the ratings were deemed reasonable, Sungwoo could not recover damages tied to the agency’s subsequent decisions not to exercise option years.
Still, the case is important for contractors considering CPAR challenges—particularly where damages are at stake.
Key Takeaways for Contractors
- Damages are on the table—but only under narrow circumstances. The ASBCA confirmed it has jurisdiction over claims for monetary relief tied to arbitrary and capricious CPAR evaluations. That said, such claims must be clearly pled in the certified claim submitted to the contracting officer. Failure to do so can deprive the Boards of jurisdiction.
- The bar for proving a CPAR is “arbitrary and capricious” remains high. A CPAR is inherently subjective, and overcoming the presumption of regularity is difficult. Contractors must show more than disagreement—they must demonstrate bad faith, abuse of discretion, or a clear factual error.
- Don’t expect compensation for lost future contracts. Even if a CPAR was improperly issued, consequential damages—like lost profits from not winning future awards—are generally not recoverable before the Boards. This underscores the need to act quickly to mitigate reputational harm through claims and comments within CPARS.
Practical Guidance
Contractors confronting a negative CPAR should:
- Engage early with assessing officials to clarify misunderstandings.
- Submit detailed, evidence-based comments in CPARS.
- If informal efforts fail, consider whether a certified claim is appropriate—and if seeking damages, be specific in your pleading.
If you need help crafting a strategic response or challenging an unfair CPAR, please contact Sam Finnerty, Daniel Figuenick, or another member of PilieroMazza’s REAs, Claims, and Appeals or Government Contracts practice groups.
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