No Participation Trophies for Contractors
How to Reform CPARS into a True, Performance-Based Meritocracy
Greg Little is a senior counselor at Palantir Technologies.
Brighton Timmins is chief of staff of CHAOS Industries.
The government’s most important scorecard for contractor performance doesn’t actually keep score.
Imagine a contractor that goes above and beyond—that delivers ahead of schedule, under budget, and adds innovations that save the government millions. In the Contractor Performance Assessment Reporting System (CPARS), that contractor’s record looks nearly identical to a contractor that barely met the minimum requirements. Both are labeled “Very Good.” Both are safe from challenge. One outperformed, the other coasted, but the system treats them the same. That’s the problem: CPARS treats excellence the same as mediocrity.
Now picture a government program manager late at night, staring at a half-finished CPARS evaluation. The contractor delivered late, quality slipped, and costs ballooned. Everyone knows it. But hitting “submit” on an honest review would mean weeks of vendor rebuttals, legal letters, and paperwork. The easier path is obvious: mark “Satisfactory” or “Very Good,” close the file, and move on. That’s how truth gets buried in the federal past performance system.
CPARS is the government’s official tool for evaluating contractor performance, meant to record quality, timeliness, cost control, and management on every significant contract. In theory, it provides contracting officers and source selection officials with a trusted history of vendor performance. Instead of relying only on flashy proposals, the government could look at CPARS to see which firms delivered and which did not.
But in practice, the system doesn’t work. Ratings are inflated, negative reviews are rare, and narratives often say little. “Marginal” and “Unsatisfactory” ratings remain extremely rare; fewer than 2 percent of contractors receive those ratings. It isn’t because contractors never underperform (we read about failures everyday). It’s because government employees know that calling out poor performance leads to battles, not accountability.
The subjectivity of CPARS makes this problem worse. As one legal analysis put it, “performance evaluations are inherently subjective.” That subjectivity fuels disputes and discourages candor, since any negative comment can—and often does—become a fight. The message is clear: tell the truth and you suffer, play it safe and you coast. Over time, accountability gets punished and mediocrity gets rewarded.
Bad data on contractor performance fuels a self-perpetuating cycle of failure. As the Department of War Inspector General found, federal source selection officials often do not have access to timely, accurate, and complete past performance assessment information needed to make informed decisions about contract awards. Worse, unreliable data in CPARS can lead directly to contracts for poorly performing contractors. In other words, the very system designed to prevent mistakes may be causing them.
Why does this matter? Because past performance isn’t just a bureaucratic exercise. It’s supposed to be the government’s most powerful tool for accountability and value. In fact, past performance is one of the key pillars of evaluation when the government makes best value determinations, helping to ensure that contracts are awarded to those most likely to deliver successful results. Every vendor can promise lower costs, faster timelines, and innovative solutions. Past performance is the only evidence of whether they can actually deliver. If it worked, CPARS would be like a credit score: a trusted, comparable signal of reliability. Instead, it has become like a perverse version of Yelp, where every restaurant has five stars—useless for deciding where to eat.
The consequences go beyond paperwork. A ship delivered late isn’t just a number; it means a strike group isn’t where it needs to be. A poorly built IT system doesn’t just frustrate users; it leaves networks vulnerable to breach. A weapons program that doubles in cost doesn’t just waste money; it erodes readiness and forces trade-offs elsewhere. When CPARS fails to separate strong performers from weak ones, the government risks buying from the wrong companies. That means taxpayers pay more, warfighters get less, and missions suffer.
Imagine if sports worked this way. Instead of batting averages or quarterback ratings, every player was just labeled “Very Good.” Fans couldn’t tell the difference between a superstar and a benchwarmer. Teams couldn’t build rosters based on skill. That’s procurement today: a league with no scores, no standings, and no way to tell who’s any good.
There is a better way. Instead of relying on subjective narratives that invite disputes, the government could adopt a point-based meritocracy where performance is continuously measured across objective dimensions: timeliness, quality, cost discipline, collaboration, innovation, and value—measured not as the ability to meet requirements, but the ability to deliver more mission impact per dollar spent.
But to make this kind of system work, the government also has to rethink how it structures contracts. Most federal contracts today are compliance-based: they focus on whether a vendor delivered the required inputs or checked the right boxes. That makes it nearly impossible to measure value or reward innovation.
What’s needed is a shift toward outcome-based contracts, where success is tied to measurable results: ships delivered on time, systems that actually work in the field, or labor hours saved through automation. If the contract is framed around outcomes, then performance scoring has real teeth. A vendor that hits the outcome gets rewarded; a vendor that doesn’t sees it reflected immediately in its score. Outcome-based contracts align incentives, make continuous monitoring meaningful, and create the space for a real meritocracy to emerge.
But outcome-based contracts aren’t just a government fix—they require industry buy in, too. For decades, vendors have built their businesses around compliance: delivering the required inputs, producing the mandated reports, checking the boxes to prove effort. That model thrives in a CPARS world where “Satisfactory” is good enough and ratings rarely differentiate performance.
Shifting to outcome-based contracts demands more. It means companies must be willing to be judged on real results: systems that actually work in the field, ships that arrive on time, dollars saved, hours freed for government personnel. That’s uncomfortable for some vendors, because it raises the bar. But it’s also the foundation of trust. Industry should welcome this shift, because in a true meritocracy, firms that consistently deliver value will finally stand apart from those that just get by.
When both government and industry embrace outcome-based contracts, measurement becomes possible. Instead of fighting over narratives in CPARS, both sides could look at the same scorecard tied to outcomes. That transparency would create fairness for contractors, accountability for government, and confidence for taxpayers.
And crucially, this wouldn’t be a once-a-year report filed at contract closeout. It would be continuous monitoring, with performance scored and updated throughout the life of the contract. If a project slips behind schedule in month six, that dip would be reflected in real time. If a vendor course-corrects and recovers, its score would improve. That feedback loop would give both the government and the contractor visibility into how they’re doing, and the opportunity to fix problems before they spiral. It would also prevent the common CPARS trap where years of mediocre performance are hidden by a single rushed evaluation at the end.
Here’s how it could work:
Timeliness: Contracts delivered on or ahead of schedule score higher. A program finished six months early might earn a 9/10, while one 12 months late gets a 0/10.
Quality: Measured by defect rates or system reliability. A software system with 99.9 percent uptime earns a 10/10; one plagued by outages earns a 4/10 (or less).
Cost discipline: Staying within budget is the baseline. Delivering savings earns additional points; repeated overruns lower the score.
Collaboration and responsiveness: Assessed through surveys of government program teams—did the vendor problem-solve quickly, or did they drag out every dispute?
Innovation and value: The hardest but most important. A shipbuilder that delivers on time, enabling fleet readiness, may score 10/10 even if costs were higher because the operational value outweighs the price. A contractor that automates manual processes, saving 20,000 government labor hours, earns a value score far above one that just meets the minimum spec.
These scores, updated continuously, would then be rolled into a composite—like a contractor “credit score” that moves with performance. Past performance would no longer be frozen in outdated paperwork. It would be alive, visible, and responsive to how contractors actually perform over time.
Such a system would change the incentive structure. Contractors couldn’t rely on relationships or intimidation to protect their records—they’d have to deliver. Government employees wouldn’t be vilified for telling the truth, because the truth would be built into the system itself. High-performing firms would finally have proof of their value. Poor performers would either improve or fall behind.
Some will argue that government contracts are too complex to be reduced to a score. But complexity is not an excuse for opacity. Airlines move billions of passengers while compiling metrics of safety, on-time arrivals, and customer satisfaction. Sports track performance across dozens of stats. Credit scores distill millions of data points into a number trusted by lenders. What matters is not precision, but differentiation—metrics that let buyers separate signal from noise.
The deeper issue is trust. CPARS fails not because people don’t care, but because no one trusts the data or believes it will make a difference. Contracting officers know the ratings are inflated. Program managers know that fighting vendors isn’t worth the effort. Vendors know that CPARS won’t make or break their next award. So the system lumbers on: ritualized, hollow, a performance evaluation system that performs nothing.
CPARS was supposed to bring meritocracy into federal contracting—a system where excellence rises, mediocrity falls, and results matter more than rhetoric. Instead, it has buried meritocracy under paperwork. By punishing candor and rewarding evasion, CPARS has created an anti-meritocracy where everyone looks the same on paper regardless of performance. And everyone gets a participation trophy.
A true meritocracy would look very different. Contractors that deliver readiness on time, create real mission value, and innovate and collaborate effectively would earn higher scores and more opportunities. Contractors that underperform, delay, or inflate costs would face real consequences. And government officials would no longer be stuck in a culture where honesty brings retaliation, because accountability would be hardwired into the system.
Fixing CPARS is about giving decision-makers the truth—and trust—they need to spend wisely and win decisively.