Defense and military contractors could face changes in their evaluation process, as both the House and Senate look to reform the Department of Defense's (DoD) assessment methods.
The 2026 defense policy bill proposes to reform the Department of Defense’s (DoD) Contractor Performance Assessment Reporting System (CPARS) by replacing the current subjective narrative evaluations with an objective, “negative-only” scoring system. This new system would document only material performance failures of contractors rather than including subjective positive or overall performance assessments.
This reform aims to make contractor evaluations more objective and focused on documenting failures rather than subjective ratings, potentially streamlining contractor accountability and improving transparency. Both the House and Senate versions of the bill support this change.
However, several potential issues and concerns have been raised regarding this reform:
- Risk of incomplete performance capture: By only recording negative information, the new system might fail to provide a full picture of a contractor’s overall performance, including strengths and improvements.
- Possible bias or misunderstanding in use: Eliminating narrative context could lead to misunderstandings of the performance record or unfairly penalize contractors for isolated issues without nuance.
- Implementation challenges: Transitioning from detailed subjective reports to a strictly negative-only metric could face difficulties in defining what constitutes a "material failure" and ensuring fair application across diverse contracts.
- Impact on contractor relationships and competition: Contractors might be more reluctant to accept government work if performance evaluation is perceived as punitive or one-sided.
While the reform intends to enhance objectivity in contractor assessments, stakeholders caution that focusing solely on negatives may compromise a balanced evaluation system, potentially affecting acquisition decisions and contractor behavior.
The amendment, introduced by Rep. Elise Stefanik (R-N.Y.), aims to require the DoD to revise the Defense Federal Acquisition Regulation Supplement to create an "objective, fact-based, and simplified system for reporting contractor performance." The new rules would require DoD contracting officers to document negative performance events within 30 days of verifying them.
Under the proposed reform, contractors will have access to their scores and underlying data in CPARS, and will be able to submit comments or rebuttals to challenge negative entries. Each negative event would be categorized into one of five categories: failures in innovation, technical development or prototype delivery; failures in manufacturing, quality control or delivering products; failures in maintenance, logistics or support services; failures in professional, administrative or operational services; failures in software, hardware, cybersecurity or IT systems.
Within one year of enactment, DoD must update CPARS to automatically calculate composite scores from the data contracting officers enter and create a way for contractors to review and respond to reported events and scores. The Senate version of the defense bill largely mirrors the House measure, seeking to eliminate subjective contractor evaluations from CPARS and establish objective criteria for negative performance events.
Notably, contracting officers do not have to do annual or regular performance evaluations unless they have confirmed a negative performance event. Alba, a partner with the law firm PilieroMazza, expressed concerns that the reform could lead to more litigation over contractor performance evaluations and more improper retaliation by government personnel. Alba suggested that CPARS should not be released until all disputes are resolved to avoid harm to contractors.
For contracts awarded before the new rules take effect, contracting officers can continue using the old CPARS system until those contracts are closed or terminated. The Defense Department is required to create a standardized scoring mechanism for negative contractor performance events based on the number and value of contracts. The measures now head to the full House and Senate for consideration, and the committees will have to merge their versions during the conference process.
The federal workforce may question the reimagined workforce restructuring in the sports industry, as the reform in the Defense Federal Acquisition Regulation Supplement (DFARS) for the Department of Defense’s (DoD) Contractor Performance Assessment Reporting System (CPARS) prepares to eliminate subjective evaluations and focus on negative-only scoring.
This new sports policy could potentially increase legal disputes, with stakeholders expressing concerns over potential biases, unfair evaluations, and improper retaliation, mirroring fears previously raised by contractors regarding the DoD reform.
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