diff --git a/README.md b/README.md
index 7c8d667..51023ba 100644
--- a/README.md
+++ b/README.md
@@ -21,7 +21,7 @@ scripts/infra/cloud-instance.sh ec2 ssh
 # Regardless of how you setup your instance
 git clone https://github.com/instructlab/taxonomy.git && pushd taxonomy && git branch rc && popd
 git clone --bare https://github.com/instructlab/eval.git && git clone eval.git/ && cd eval && git remote add syncrepo ../eval.git
-python -m venv venv
+python3 -m venv venv
 source venv/bin/activate
 pip install -r requirements.txt
 pip install -r requirements-dev.txt
diff --git a/pyproject.toml b/pyproject.toml
index b11c7bd..03faef9 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -96,3 +96,6 @@ from-first = true
 # import-heading-firstparty=First Party
 # import-heading-localfolder=Local
 known-local-folder = ["tuning"]
+
+[tool.mypy]
+ignore_missing_imports = true
diff --git a/src/instructlab/eval/exceptions.py b/src/instructlab/eval/exceptions.py
index 1037d90..b3c7ca5 100644
--- a/src/instructlab/eval/exceptions.py
+++ b/src/instructlab/eval/exceptions.py
@@ -107,3 +107,15 @@ def __init__(self, tasks_dir) -> None:
         super().__init__()
         self.tasks_dir = tasks_dir
         self.message = f"Invalid Tasks Dir: {tasks_dir}"
+
+
+class ModelServingAPIError(EvalError):
+    """
+    Error raised when reply retrieval from model serving fails.
+    Attributes
+        message              error message to be printed on raise
+    """
+
+    def __init__(self) -> None:
+        super().__init__()
+        self.message = "Failed to receive a reply from model serving API."
diff --git a/src/instructlab/eval/mt_bench_common.py b/src/instructlab/eval/mt_bench_common.py
index 86f9920..ee23546 100644
--- a/src/instructlab/eval/mt_bench_common.py
+++ b/src/instructlab/eval/mt_bench_common.py
@@ -4,7 +4,7 @@
 """
 
 # Standard
-from typing import Optional
+from typing import Optional, TypedDict
 import ast
 import dataclasses
 import glob
@@ -14,9 +14,13 @@
 import time
 
 # Third Party
+from fastchat import conversation
 from fastchat.model.model_adapter import get_conversation_template  # type: ignore
 import openai
 
+# First Party
+from instructlab.eval import exceptions
+
 # Local
 from .logger_config import setup_logger
 
@@ -247,21 +251,56 @@ def play_a_match_single(
     return result
 
 
+def _is_fatal_openai_error(e: openai.OpenAIError) -> bool:
+    return isinstance(
+        e,
+        (
+            openai.APIConnectionError,
+            openai.AuthenticationError,
+            openai.PermissionDeniedError,
+            openai.NotFoundError,
+        ),
+    )
+
+
+# TODO: copied from instructlab (cli) utils module; consolidate somewhere?
+class Message(TypedDict):
+    """
+    Represents a message within an AI conversation.
+    """
+
+    content: str
+    # one of: "user", "assistant", or "system"
+    role: str
+
+
+def _get_messages(
+    conv: conversation.Conversation, merge_system_user_message: bool
+) -> list[Message]:
+    messages = conv.to_openai_api_messages()
+    if (
+        (merge_system_user_message or conv.name == "mistral")
+        and messages[0]["role"] == "system"
+        and messages[1]["role"] == "user"
+    ):
+        messages[1]["content"] = messages[0]["content"] + "\n" + messages[1]["content"]
+        return messages[1:]
+    return messages
+
+
 def chat_completion_openai(
-    openai_client, model, conv, temperature, max_tokens, merge_system_user_message=False
+    openai_client,
+    model,
+    conv: conversation.Conversation,
+    temperature,
+    max_tokens,
+    merge_system_user_message: bool = False,
 ) -> str:
+    output = None
+    messages = _get_messages(conv, merge_system_user_message)
+
     for i in range(API_MAX_RETRY):
         try:
-            messages = conv.to_openai_api_messages()
-            if (
-                (merge_system_user_message or conv.name == "mistral")
-                and messages[0]["role"] == "system"
-                and messages[1]["role"] == "user"
-            ):
-                messages[1]["content"] = (
-                    messages[0]["content"] + "\n" + messages[1]["content"]
-                )
-                messages = messages[1:]
             response = openai_client.chat.completions.create(
                 model=model,
                 messages=messages,
@@ -269,15 +308,42 @@ def chat_completion_openai(
                 temperature=temperature,
                 max_tokens=max_tokens,
             )
-            return response.choices[0].message.content
-        except openai.OpenAIError as e:
+            output = response.choices[0].message.content
+            break
+        except (
+            # retry won't fix these errors
+            openai.BadRequestError,  # 400
+            openai.UnprocessableEntityError,  # 422
+        ) as e:
+            logger.debug(e)
+            return API_ERROR_OUTPUT  # immediately soft fail
+        except (
+            # retry may help with these errors
+            openai.APIConnectionError,
+            openai.RateLimitError,  # 429
+            openai.InternalServerError,  # >=500
+            # NOTE: Errors listed below may need a revisit: we are not sure if
+            # it's ever helpful to retry them. Leaving them intact for now.
+            openai.AuthenticationError,  # 401
+            openai.PermissionDeniedError,  # 403
+            openai.NotFoundError,  # 404
+            # General catch-all
+            openai.OpenAIError,
+        ) as e:
+            if not _is_fatal_openai_error(e):
+                output = API_ERROR_OUTPUT  # disable hard fail (never raise!)
+            # still, retry in the hope we'll get a successful reply
             if i == API_MAX_RETRY - 1:
                 logger.error(e)
                 break
             logger.debug(e)
             time.sleep(API_RETRY_SLEEP)
 
-    return API_ERROR_OUTPUT
+    if output is None:
+        # not a single attempt was non-fatal; this is indicative of
+        # basic connectivity or server issue -> hard fail
+        raise exceptions.ModelServingAPIError
+    return output
 
 
 def check_data(questions, model_answers, ref_answers, models, judges):