FAR 42.1502—Policy.
Plain-English Summary
FAR 42.1502 establishes the Government’s policy for collecting and recording contractor past performance information, primarily through CPARS, so source selection officials and program personnel have a consistent record to use in future acquisitions. It covers when past performance evaluations must be prepared, including the general rule of annual and completion-time evaluations, the types of contracts and orders that require evaluations, and special rules for orders under multiple-agency contracts and single-agency task- and delivery-order contracts. It also sets specific mandatory evaluation thresholds for construction and architect-engineer contracts, including default terminations, and explains that evaluations generally apply to the entity, division, or unit that actually performed the work. The section further requires evaluation of small business subcontracting performance and unjustified reduced or untimely payments to small business subcontractors when the subcontracting plan clause applies, while identifying situations that are not treated as unjustified. Finally, it excludes contracts awarded under subpart 8.7 from performance evaluation and requires agencies to promptly report other contractor information under FAR 42.1503(h). In practice, this section matters because it drives what performance data gets entered into CPARS, when it must be done, and what issues will affect a contractor’s future competitiveness for federal work.
Key Rules
Annual and completion evaluations
Past performance evaluations must be prepared at least annually and again when the work under a contract or order is completed. This creates a continuing record of performance, not just a closeout-only assessment.
CPARS is the required system
All past performance reports must be entered into CPARS, the Governmentwide evaluation reporting tool. Agencies must use CPARS for the official record and follow CPARS submission instructions.
General contract and order coverage
Agencies must evaluate contracts and orders that exceed the simplified acquisition threshold, unless a specific exception applies. If a modification pushes the dollar value above the threshold, an evaluation is required.
Multiple-agency order evaluations
Orders over the simplified acquisition threshold placed under Federal Supply Schedules, GWACs, or other multi-agency/task-order or delivery-order contracts awarded by another agency must be evaluated. Agencies also evaluate their own orders under their own multiple-agency contracts.
Single-agency order discretion
For single-agency task-order and delivery-order contracts, the contracting officer may require order-level evaluations when they would provide more useful source-selection information than the overall contract evaluation. This is a judgment call based on the breadth of the basic contract and differences among orders.
Construction and A-E thresholds
Construction contracts of $900,000 or more, and architect-engineer services contracts of $45,000 or more, require evaluations, as do any such contracts terminated for default regardless of dollar value. Agencies may also evaluate lower-dollar construction and A-E contracts.
Subcontracting and payment performance
When the contract includes the small business subcontracting plan clause, evaluations must address performance against subcontracting goals and any unjustified reduced or untimely payments to small business subcontractors. The contracting officer must consider the contractor’s written explanation and apply the rule that three or more unjustified incidents in a 12-month period constitute a history of unjustified reduced or untimely payments.
Excluded and additional reporting
Agencies must not evaluate performance for contracts awarded under subpart 8.7. Agencies must also promptly report other contractor information in accordance with FAR 42.1503(h), which ties this policy section to the detailed reporting procedures.
Responsibilities
Contracting Officer
Ensure required evaluations are prepared on time, determine whether order-level evaluations are appropriate for single-agency task and delivery orders, evaluate contractor explanations for reduced or untimely payments, decide whether such payments are justified, and ensure information is entered into CPARS and other required reporting channels.
Agency
Prepare evaluations for covered contracts and orders, including those performed outside the United States; use CPARS as the Governmentwide repository; apply the special rules for multiple-agency orders, construction, and architect-engineer contracts; and refrain from evaluating contracts awarded under subpart 8.7.
Contractor
Perform in a way that supports favorable past performance ratings, provide written explanations when reduced or untimely payments to small business subcontractors are questioned, and understand that performance by the entity, division, or unit that actually performed the work is what will generally be evaluated.
Small Business Subcontractor
Provide timely performance and payment-related information as needed to support the prime contractor’s subcontracting plan performance record, while recognizing that late performance can affect payment timing and evaluation outcomes.
Source Selection Officials
Use CPARS past performance information as part of future source selection decisions and rely on order-level evaluations when they provide more useful information than the overall contract record.
Practical Implications
Contractors should expect CPARS entries not only at closeout but also at least annually, so performance issues can affect future competitions long before a contract ends.
A modification that pushes a contract or order above the simplified acquisition threshold can trigger a new evaluation requirement, so both sides should watch dollar growth closely.
For multi-agency vehicles, the ordering agency—not just the base contract holder—may have to evaluate each qualifying order, which means performance can be recorded in multiple places across different agencies.
Small business subcontracting performance is part of the evaluation when the clause applies, and repeated unjustified late or reduced payments can materially hurt ratings and future award prospects.
Agencies should not assume every order needs a separate evaluation under single-agency task/delivery contracts; the contracting officer should decide whether order-level data is actually more useful than the overall contract assessment.
Official Regulatory Text
(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/ . (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).