FAPIIS

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There is no doubt that contractors have the power to challenge an erroneous assessment of their performance on a government contract. FAR 42.1503 requires the government to issue past performance reviews in draft. Contractors are entitled to rebut any inaccuracies in the draft. Even if the government declines to make a requested change, contractors are entitled to have their comments included in the final report. Under the FAR disputes clause, contractors may submit a claim challenging a faulty past performance assessment. Denial of such a claim can be appealed to a Board of Contract Appeals or the United States Court of Federal Claims.

Of course getting a court decision reversing a poor past performance assessment presents a number of hurdles. One such hurdle is the requirement that a contractor submit a “claim” and that the contracting officer issue a final decision denying it. Without a claim and a final decision or sufficient passage of time to establish a “deemed denial,” there would be no jurisdiction allowing a Board or the Court to consider a contractor challenge to a poor past performance assessment.

But what happens when a negative past performance assessment is linked to unresolved disputes over delays, change orders, or government backcharges? Wouldn’t a resolution in the contractor’s favor necessarily require a reassessment of the contractor’s performance? As a matter of common sense, yes. Unfortunately common sense doesn’t create Contract Disputes Act jurisdiction. The recent decision in Extreme Coatings, Inc. v. United States, No. 11-895C (Fed. Cl. Oct. 3, 2012), concludes that a claim involving affirmative contractor claims or government counterclaims does not meet the jurisdictional requirement for a claim challenging past performance.

The Contractor’s Perspective is up to three entries on the application of FAR 52.204-10, which requires some federal contractors and first-tier subcontractors to report the compensation of their top-five highest paid executives. Even though it has been almost two years since the requirement first appeared in the FAR, the topic still generates a lot of interest and a lot of questions. Here are answers to some of the questions we received in the executive compensation reporting segment of our recent webinar on Transparency in Government Contracting. We hope you find them useful.

Question: Does FAR 52.204-10 apply only to new contracts or does it also apply retroactively to existing contracts?

Answer: Even though the statutory requirement for reporting executive compensation became law in April 2008 when President Bush signed the Government Funding Transparency Act of 2008, the contractual requirement didn’t go into effect until July 8, 2010, when the FAR Councils published FAR 52.204-10 as an “interim rule.” According to the text of the interim rule, FAR 52.204-10 is required in all contracts over $25,000 that are awarded after July 8, 2010. It does not apply to contracts awarded before on or before July 8, 2010.

Since the Federal Awardee Performance and Integrity Information System opened to the public on April 15, 2011, contractors have been concerned that their trade secrets and other proprietary information might also become accessible. With good reason—the interim version of FAR 52.209-9 provided for the public availability of all newly submitted information other than “past performance reviews.”

The final rule on public access to FAPIIS specifically addresses the problem. Rather than simply ignoring Freedom of Information Act exemptions entirely as the interim rule did, the final form of FAR 52.209-9 (Jan. 3, 2012) [pdf] includes a mechanism that allows the contractor to identify information covered by a FOIA exemption.

Contractors seeking to comply with the new requirement to report the compensation of their five highest paid executives under FAR 52.204-10 (July 2010) still have a lot of unresolved questions. We heard some of the questions during our June 8, 2011 webinar on the topic, which was sponsored by L2 Federal Resources, LLC, publisher of The Contracting Post. Thanks for hosting!

Here are some of the questions posed, along with our answers.

One response to the shortage of experienced federal contracting personnel and qualified DCAA auditors is to turn the job over to the public at large.  That seems to be the plan when it comes to the new federal contractor transparency initiatives, the most recent of which is the rule that will make the Federal Awardee Performance and Integrity Information System (FAPIIS) available to the public after April 15, 2011.  Like the business model adopted by Wikileaks, the concept appears be that posting selected contractor performance data on the internet will be like hiring 300 million inspectors general.  As with many government initiatives, the results are likely to cost more and achieve less than anticipated.