How to challenge a negative Vendor Performance Report
No one likes receiving a bad report card. For government contractors, the consequences of a bad report card can be severe—repeated unfavorable performance reports from a state agency may result in debarment for up to five years. Under Texas law, a vendor has at least two chances to challenge a negative Vendor Performance Report (“VPR”) that it receives from a state agency. If you expect to receive a negative VPR, or already have, you’ll have to act quickly to submit your protest by the deadline, in compliance with the Comptroller’s rules.
When are VPRs posted?
State agencies are required to review vendor performance at specified times:
- at least once a year and at each key milestone identified in the contract, if the contract value exceeds $5 million; and
- upon contract completion or termination of the purchase order or contract, for any purchase of goods or services: (1) of $25,000 or more from contracts administered by the Comptroller; (2) made through an agency’s delegated authority as described in 34 Tex. Admin. Code § 20.82; (3) made pursuant to the authority in Government Code, Title 10, Subtitle D; or (4) for which a state agency is required to use the “best value” standard.[1]
The state agency submits its report—called a Vendor Performance Report (“VPR”)—to the Texas Comptroller of Public Accounts. The VPR is published at TxSmartBuy.com.
State agencies must review a vendor’s performance using a “A” – “F” grading scale established by state law.[2]
Debarment for repeated unfavorable VPRs
The Comptroller may debar a vendor for up to five years if the vendor receives repeated unfavorable VPRs, after considering the following factors: (i) the severity of the substandard performance by the vendor; (ii) the impact to the state of the substandard performance; (iii) any recommendations by a contracting state agency that provides an unfavorable performance review; (iv) whether debarment of the vendor is in the best interest of the state; and (v) any other factor that the Comptroller considers relevant.[3] A list of debarred vendors is available on the Comptroller’s website.
A vendor has at least two chances to challenge a negative VPR
VPRs with an “A,” “B,” or “C” grade can’t be challenged and are published automatically on the Comptroller’s website without agency comments.
If a VPR is given a “D” or “F” grade, the vendor has two chances to challenge it.
VPRs that are given a “D” or “F” grade are placed on hold for 30 calendar days to allow vendors to submit a response. The Comptroller’s Statewide Purchasing Division (SPD) will email the vendor when a negative VPR has been submitted and placed on hold. Vendor comments must be limited to 4,000 characters.
If no vendor response is submitted within 30 calendar days, the VPR will be published as initially submitted by the agency. If the Comptroller receives a response from the vendor within 30 calendar days, it is forwarded to the agency that submitted the VPR. The agency will decide whether to change the report or let it stand as submitted. Once an agency determination is made and sent to SPD, vendor and agency comments are added to the report and the grade is published online at TxSmartBuy.com.
Once the report is published, if the grade is still a “D” or “F,” the vendor has one more chance to challenge it. The vendor has 10 calendar days (from the date the VPR is published) to file a protest with the SPD. The protest must be limited to 4,000 characters. The vendor should use the protest form provided by the Comptroller and submit it via email to vendor.performance@cpa.texas.gov. A protest filed after the 10-day deadline will not be accepted or considered.
Are there any other ways to change a VPR grade?
If a vendor files a response during the 30-day period and the state agency refuses to improve the grade, the state agency could still change the grade later. The executive head of a state agency may—within 4 years of submission of a VPR—request to revise the report and grade by submitting a written justification for the grade revision to the Comptroller.[4]
The Comptroller will publish the grade revision and revised performance report, unless the requested grade revision will result in a grade lower than “C,” in which case the vendor would have the opportunity to challenge it.
How long are VPRs available online?
VPRs are publicly available on TxSmartBuy.com for four years from the date they are submitted to the Comptroller. Reports older than four years may be obtained by submitting an open records request to the Comptroller. Completed VPRs are public information under Section 552.022 of the Texas Public Information Act.
[1] Tex. Gov’t Code § 2155.089(a).
[2] 34 Tex. Admin. Code § 20.509.
[3] Tex. Gov't Code § 2155.077; 34 Tex. Admin. Code § 20.585.
[4] 34 Tex. Admin. Code § 20.115.