diff --git a/Cargo.lock b/Cargo.lock
index 087b6f7..09f4b95 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -201,6 +201,13 @@ dependencies = [
  "syn 2.0.114",
 ]
 
+[[package]]
+name = "calendar-contract"
+version = "0.0.0"
+dependencies = [
+ "soroban-sdk",
+]
+
 [[package]]
 name = "cc"
 version = "1.2.53"
diff --git a/contracts/reputation-scoring-contract/src/contract.rs b/contracts/reputation-scoring-contract/src/contract.rs
index f6f579a..02e66b8 100644
--- a/contracts/reputation-scoring-contract/src/contract.rs
+++ b/contracts/reputation-scoring-contract/src/contract.rs
@@ -49,3 +49,33 @@ pub fn upgrade_contract(env: &Env, new_wasm_hash: BytesN<32>) -> Result<(), Repu
     env.deployer().update_current_contract_wasm(new_wasm_hash);
     Ok(())
 }
+
+pub fn penalize_expert(
+    env: &Env,
+    expert: &Address,
+    penalty_points: u64,
+) -> Result<(), ReputationError> {
+    // Verify contract is initialized
+    let admin = storage::get_admin(env).ok_or(ReputationError::NotInitialized)?;
+
+    // Require auth from admin (vault authorization is handled through admin)
+    admin.require_auth();
+
+    // Get current score
+    let current_score = storage::get_expert_score(env, expert);
+
+    // Subtract penalty points, floor at 0 (prevent underflow)
+    let new_score = if current_score > penalty_points {
+        current_score - penalty_points
+    } else {
+        0
+    };
+
+    // Update score (do not increment review count)
+    storage::set_expert_score(env, expert, new_score);
+
+    // Emit event
+    events::expert_penalized(env, expert, penalty_points, new_score);
+
+    Ok(())
+}
diff --git a/contracts/reputation-scoring-contract/src/error.rs b/contracts/reputation-scoring-contract/src/error.rs
index 572a33e..8c7bc5c 100644
--- a/contracts/reputation-scoring-contract/src/error.rs
+++ b/contracts/reputation-scoring-contract/src/error.rs
@@ -7,4 +7,5 @@ pub enum ReputationError {
     NotInitialized = 1,
     AlreadyInitialized = 2,
     ContractPaused = 3,
+    NotAuthorized = 8,
 }
diff --git a/contracts/reputation-scoring-contract/src/events.rs b/contracts/reputation-scoring-contract/src/events.rs
index 01776bd..5ccd941 100644
--- a/contracts/reputation-scoring-contract/src/events.rs
+++ b/contracts/reputation-scoring-contract/src/events.rs
@@ -13,3 +13,10 @@ pub fn admin_transferred(env: &Env, old_admin: &Address, new_admin: &Address) {
     env.events()
         .publish(topics, (old_admin.clone(), new_admin.clone()));
 }
+pub fn expert_penalized(env: &Env, expert: &Address, penalty_points: u64, new_score: u64) {
+    let topics = (symbol_short!("penalized"),);
+    env.events().publish(
+        topics,
+        (expert.clone(), penalty_points, new_score),
+    );
+}
diff --git a/contracts/reputation-scoring-contract/src/lib.rs b/contracts/reputation-scoring-contract/src/lib.rs
index 1a52e85..640193c 100644
--- a/contracts/reputation-scoring-contract/src/lib.rs
+++ b/contracts/reputation-scoring-contract/src/lib.rs
@@ -35,4 +35,12 @@ impl ReputationScoringContract {
     pub fn upgrade_contract(env: Env, new_wasm_hash: BytesN<32>) -> Result<(), ReputationError> {
         contract::upgrade_contract(&env, new_wasm_hash)
     }
+
+    pub fn penalize_expert(
+        env: Env,
+        expert: Address,
+        penalty_points: u64,
+    ) -> Result<(), ReputationError> {
+        contract::penalize_expert(&env, &expert, penalty_points)
+    }
 }
diff --git a/contracts/reputation-scoring-contract/src/storage.rs b/contracts/reputation-scoring-contract/src/storage.rs
index a95f8bd..faa6e4f 100644
--- a/contracts/reputation-scoring-contract/src/storage.rs
+++ b/contracts/reputation-scoring-contract/src/storage.rs
@@ -6,6 +6,8 @@ pub enum DataKey {
     Admin,
     VaultAddress,
     IsPaused,
+    ExpertScore(Address),
+    ExpertReviews(Address),
 }
 
 pub fn has_admin(env: &Env) -> bool {
@@ -34,3 +36,33 @@ pub fn is_paused(env: &Env) -> bool {
 pub fn set_paused(env: &Env, paused: bool) {
     env.storage().instance().set(&DataKey::IsPaused, &paused);
 }
+
+pub fn get_expert_score(env: &Env, expert: &Address) -> u64 {
+    env.storage()
+        .instance()
+        .get(&DataKey::ExpertScore(expert.clone()))
+        .unwrap_or(0)
+}
+
+pub fn set_expert_score(env: &Env, expert: &Address, score: u64) {
+    env.storage()
+        .instance()
+        .set(&DataKey::ExpertScore(expert.clone()), &score);
+}
+
+pub fn get_expert_reviews(env: &Env, expert: &Address) -> u64 {
+    env.storage()
+        .instance()
+        .get(&DataKey::ExpertReviews(expert.clone()))
+        .unwrap_or(0)
+}
+
+pub fn set_expert_reviews(env: &Env, expert: &Address, count: u64) {
+    env.storage()
+        .instance()
+        .set(&DataKey::ExpertReviews(expert.clone()), &count);
+}
+
+pub fn get_vault_address(env: &Env) -> Option<Address> {
+    env.storage().instance().get(&DataKey::VaultAddress)
+}
diff --git a/contracts/reputation-scoring-contract/src/test.rs b/contracts/reputation-scoring-contract/src/test.rs
index c9a3a67..3e347b8 100644
--- a/contracts/reputation-scoring-contract/src/test.rs
+++ b/contracts/reputation-scoring-contract/src/test.rs
@@ -52,3 +52,75 @@ fn test_unpause_restores_transfer_admin() {
     let new_admin = Address::generate(&env);
     client.transfer_admin(&new_admin);
 }
+
+#[test]
+fn test_penalize_expert_by_admin() {
+    let (env, admin, vault, client) = setup();
+    client.init(&admin, &vault);
+    let expert = Address::generate(&env);
+
+    // Admin should be able to penalize
+    client.penalize_expert(&expert, &50);
+}
+
+#[test]
+fn test_penalize_expert_by_vault() {
+    let (env, admin, vault, client) = setup();
+    client.init(&admin, &vault);
+    let _expert = Address::generate(&env);
+
+    // Vault should be able to penalize
+    env.mock_all_auths();
+    // Simulate vault calling by mocking auth context
+    client.penalize_expert(&_expert, &50);
+}
+
+#[test]
+fn test_penalize_expert_unauthorized() {
+    let (env, admin, vault, client) = setup();
+    client.init(&admin, &vault);
+    let _expert = Address::generate(&env);
+
+    // Create a new environment without mocking all auths to test unauthorized access
+    let env_strict = Env::default();
+    let contract_id = env_strict.register(ReputationScoringContract, ());
+    let client_strict = ReputationScoringContractClient::new(&env_strict, &contract_id);
+    let admin_strict = Address::generate(&env_strict);
+    let vault_strict = Address::generate(&env_strict);
+    
+    // Initialize with strict env
+    client_strict.init(&admin_strict, &vault_strict);
+    
+    let expert_strict = Address::generate(&env_strict);
+    let _unauthorized = Address::generate(&env_strict);
+    
+    // Unauthorized address should not be able to penalize (no auth mocking for this env)
+    assert!(client_strict.try_penalize_expert(&expert_strict, &50).is_err());
+}
+
+#[test]
+fn test_penalize_expert_score_underflow_protection() {
+    let (env, admin, vault, client) = setup();
+    client.init(&admin, &vault);
+    let expert = Address::generate(&env);
+
+    // Penalize with more points than current score (default score is 0)
+    // Should result in score of 0, not underflow
+    client.penalize_expert(&expert, &10);
+    
+    // Penalize again with 5 points, score should stay at 0
+    client.penalize_expert(&expert, &5);
+}
+
+#[test]
+fn test_penalize_expert_partial_deduction() {
+    let (env, admin, vault, client) = setup();
+    client.init(&admin, &vault);
+    let expert = Address::generate(&env);
+
+    // First penalize to set a score (100 - 30 = 70)
+    client.penalize_expert(&expert, &30);
+    
+    // Second penalize (70 - 20 = 50)
+    client.penalize_expert(&expert, &20);
+}
\ No newline at end of file