42.1502 Policy
Source: FAR 42.1502 on acquisition.gov
Past performance evaluations are mandatory for most contracts and orders above the simplified acquisition threshold and must be entered into CPARS, with special attention to small business subcontracting performance and payment practices.
Overview
FAR 42.1502 establishes the policy for preparing and submitting past performance evaluations for government contracts and orders. These evaluations are required at least annually and at contract/order completion, and must be entered into the Contractor Performance Assessment Reporting System (CPARS). The regulation specifies thresholds and types of contracts/orders that require evaluations, including construction and architect-engineer contracts, and details special requirements for small business subcontracting performance. Exceptions and special cases, such as contracts under subpart 8.7, are also addressed.
Key Rules
- Annual and Completion Evaluations
- Past performance evaluations must be prepared at least annually and at contract/order completion, and entered into CPARS.
- Thresholds for Evaluations
- Required for contracts and orders exceeding the simplified acquisition threshold, construction contracts ≥ $900,000, and architect-engineer contracts ≥ $45,000, with certain exceptions and allowances for lower-value contracts.
- Multiple-Agency and Single-Agency Orders
- Evaluations are required for orders over the threshold under multiple-agency contracts; for single-agency contracts, evaluations may be required if more useful for source selection.
- Small Business Subcontracting Assessment
- Evaluations must assess performance against small business subcontracting plans and unjustified reduced/untimely payments to small business subcontractors.
- Exceptions
- No evaluations for contracts under subpart 8.7; special reporting for contracts terminated for default.
Responsibilities
- Contracting Officers: Ensure timely preparation and submission of evaluations, assess small business subcontracting performance, and determine justification for payment issues.
- Contractors: Provide explanations for payment issues and comply with small business subcontracting plans.
- Agencies: Oversee compliance, ensure evaluations are entered into CPARS, and report other contractor information as required.
Practical Implications
This section ensures that contractor performance is systematically evaluated and documented, impacting future source selections and accountability. Contractors must be proactive in managing performance and subcontractor relationships, while agencies must maintain rigorous evaluation and reporting processes. Common pitfalls include missing evaluation deadlines, incomplete CPARS entries, and inadequate documentation of payment issues or subcontracting performance.
(a) General. Past performance evaluations shall be prepared at least annually and at the time the work under a contract or order is completed. Past performance evaluations are required for contracts and orders as specified in paragraphs (b) through (f) of this section, including contracts and orders performed outside the United States. These evaluations are generally for the entity, division, or unit that performed the contract or order. Past performance information shall be entered into CPARS, the Governmentwide evaluation reporting tool for all past performance reports on contracts and orders. Instructions for submitting evaluations into CPARS are available at http://www.cpars.gov/" target="_blank">http://www.cpars.gov/.
(b) Contracts. Except as provided in paragraphs (e), (f), and (h) of this section, agencies shall prepare evaluations of contractor performance for each contract (as defined in FAR part 2) that exceeds the simplified acquisition threshold and for each order that exceeds the simplified acquisition threshold. Agencies are required to prepare an evaluation if a modification to the contract causes the dollar amount to exceed the simplified acquisition threshold.
(c) Orders under multiple-agency contracts. Agencies shall prepare an evaluation of contractor performance for each order that exceeds the simplified acquisition threshold that is placed under a Federal Supply Schedule contract or placed under a task-order contract or a delivery-order contract awarded by another agency (i.e., Governmentwide acquisition contract or multi-agency contract). Agencies placing orders under their own multiple-agency contract shall also prepare evaluations for their own orders. This evaluation shall not consider the requirements under paragraph (g) of this section. Agencies are required to prepare an evaluation if a modification to the order causes the dollar amount to exceed the simplified acquisition threshold.
(d) Orders under single-agency contracts. For single-agency task-order and delivery-order contracts, the contracting officer may require performance evaluations for each order in excess of the simplified acquisition threshold when such evaluations would produce more useful past performance information for source selection officials than that contained in the overall contract evaluation (e.g., when the scope of the basic contract is very broad and the nature of individual orders could be significantly different). This evaluation need not consider the requirements under paragraph (g) of this section unless the contracting officer deems it appropriate.
(e) Past performance evaluations shall be prepared for each construction contract of $900,000 or more, and for each construction contract terminated for default regardless of contract value. Past performance evaluations may also be prepared for construction contracts below $900,000.
(f) Past performance evaluations shall be prepared for each architect-engineer services contract of $45,000 or more, and for each architect-engineer services contract that is terminated for default regardless of contract value. Past performance evaluations may also be prepared for architect-engineer services contracts below $45,000.
(g) Past performance evaluations shall include an assessment of the contractor's-
(1) Performance against, and efforts to achieve, the goals identified in the small business subcontracting plan when the contract includes the clause at 52.219-9, Small Business Subcontracting Plan; and
(2) Reduced or untimely payments (as defined in 19.701), made to small business subcontractors, determined by the contracting officer to be unjustified. The contracting officer shall-
(i) Consider and evaluate a contractor's written explanation for a reduced or an untimely payment when determining whether the reduced or untimely payment is justified; and
(ii) Determine that a history of unjustified reduced or untimely payments has occurred when the contractor has reported three or more occasions of unjustified reduced or untimely payments under a single contract within a 12-month period (see 42.1503(h)(1)(vi) and the evaluation ratings in Table 42-2). The following payment or nonpayment situations are not considered to be unjustified:
(A) There is a contract dispute on performance.
(B) A partial payment is made for amounts not in dispute.
(C) A payment is reduced due to past overpayments.
(D) There is an administrative mistake.
(E) Late performance by the subcontractor leads to later payment by the prime contractor.
(h) Agencies shall not evaluate performance for contracts awarded under subpart 8.7.
(i) Agencies shall promptly report other contractor information in accordance with 42.1503(h).