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“Consistently Inconsistent”: Court of Federal Claims Finds Navy’s Past Performance Rating System Arbitrary

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In Advanced Technology Systems Company v. United States, U.S. Court of Federal Claims, No. 25-515C (July 16, 2025), Advanced Technology Systems Company (ATSC) protested the Navy’s award of a contract for a nationwide maritime surveillance system in Egypt to Forward Slope, Inc. (FSI). ATSC argued that the Navy’s best value determination was flawed, that it used a vague and inconsistent past performance evaluation framework, and that the agency disregarded highly relevant subcontractor past performance. The Court agreed, finding that ATSC had established multiple procurement errors that were both irrational and prejudicial, even though injunctive relief was denied due to national security concerns.

The Decision:
The U.S. Court of Federal Claims sustained the protest in part, ruling that:

  1. Best Value Tradeoff Lacked a Rational Basis: The Navy improperly concluded that Neutral Confidence and Satisfactory Confidence past performance ratings were equal, without providing any rationale. The Court rejected the government’s attempt to justify the decision after the fact, calling the agency’s explanation “conclusory” and unsupported by contemporaneous documentation.
  2. Past Performance Rating System and Accompanying Rationale Were “Incoherent, Indecipherable, and Incomprehensible”: The Navy’s criteria for rating past performance as “Not Relevant” vs. “Somewhat Relevant” was based on undefined and overlapping terms like “some,” “little,” “less,” and “substantially less.” The Court called the system “consistently inconsistent” and held that the ratings lacked a rational basis, making it impossible for offerors to understand how to meet the evaluation criteria.
  3. Unequal Treatment of Subcontractor References: ATSC’s two “Very Relevant” past performance submissions (one from the prime, one from its subcontractor) were discounted because they stemmed from the same contract. Meanwhile, another offeror’s nearly identical structure was counted twice. The Court found this disparate treatment unjustified and prejudicial, particularly since ATSC would have outscored competitors if its second reference had been credited equally.
  4. Prejudice Was Clear: Had the Navy treated past performance correctly, ATSC likely would have scored higher than FSI in two of the four non-price factors, which were explicitly “significantly more important than price.” That showing satisfied the protestor’s burden to demonstrate prejudice.
  5. No Injunction Due to National Security Concerns: Despite ATSC prevailing on the merits, the Court declined to enjoin the contract based on a classified declaration from a senior official outlining serious national security risks tied to delaying performance. The case was remanded to the Navy for a new or clarified decision.

Key Takeaways for Contractors:

  1. Equal Does Not Mean Equally Weighted: Just because a “Neutral Confidence” rating isn’t negative doesn’t mean it must be treated as equal to a “Satisfactory” rating.
  2. Vague Rating Systems Are Vulnerable: Ambiguous, overlapping evaluation language—especially in past performance relevancy criteria—opens the door to successful protest grounds if not applied clearly.
  3. Subcontractor Past Performance Must Be Handled Evenly: Agencies can’t credit one offeror’s prime/subcontractor combo more favorably than another’s without justification.
  4. Contemporaneous Documentation Matters: GAO and the Court won’t accept post-hoc justifications. All evaluation rationale must be documented in real time.
  5. Winning on the Merits Doesn’t Guarantee an Injunction: Even a successful protest can fall short of getting the contract if national security or public interest tips the balance in the government’s favor.