Government Contract Disputes & Claims

Anytime you enter into a contract you may be faced with a dispute or need to file a claim.  This is what today’s topic is all about.  In government contracting there are 4 levels that a claim maybe processed through.  We are going to talk about these todays.

As a small business owner, the better educated you are the better decisions you can make.  This is especially true when you have a material disagreement or issue relating to a government contract.  This could result in you having to file a dispute or a claim with the government through the Contract Disputes Act.

Contract Disputes Act (CDA)

This is where the Contract Disputes Act (CDA) of 1978 comes into play.  The Contract Dispute Act or CDA for short provides standard procedures for negotiating and litigating Government Contract disputes.  This process is to design to be transparent and fair.  Did you know that the Contract Dispute Act has four levels?

Levels of Contract Disputes Act

Now as we have discussed previously, it is best to resolve any disputes at the lowest level possible.  You must first file your dispute with the Contracting Officer.  The Contracting Officer in turn, will issue a Contracting Officer’s Final Decision.  Basically, the Contracting Officer’s Final Decision is a decision based on the dispute’s merits.  Now a contractor has the right to appeal the contracting officer’s decision.  A contractor may appeal to the United States Court of Federal Claims or the Board of Contract Appeals.  Still not happy with the decision? You have the option of filing your appeal through the next level. The next level is with the United States Court of Appeals for the Federal Circuit.  Still not satisfied.  Your last result is to file your appeal with the Supreme Court of the United States.

When to File a Contract Dispute?

Changes are often made to a government contract.  These changes can be adding work to the contract or changing the scope of work.  Then the government could alter the conditions that will impact the performance of the contract.  As you can imagine, these changes will impact the contractor.  You, the contractor will have to be paid for these additional expenses that incurred as a result of the increased workload or changed conditions.  In good faith you must your requests for additional expenses incurred to the contracting officer.  If the contracting officer (CO) delays in responding to you or rejects your additional compensation request.  What do you do?  Well you could continue to go back and forth with the contracting officer or instead file a claim.

Contracts Not Eligible for Contract Dispute Act

As we said earlier the Contract Dispute Act provides an administrative resolution of government contract disputes.  The Contract Dispute Act applies to any express or implied contract by an executive agency. It applies to procurements of property (other than real property), services, construction, alteration, repair or maintenance of real property and disposal of personal property.

The Contract Dispute Act does not cover the following the lower tiers of Non-Appropriated Funds Instrumentality (NAFI). An example is Morale and Welfare Funds. It also does not apply to agencies operating without appropriated funds. These include the Federal Prison Industries, and US Mint. It also does not apply to contracts for Research and Development, barter agreements, grants or cooperative agreements.

Next we will discuss who can file a Contract Dispute claim.

Who Can File a Contract Dispute Act Claim?

In order to file a claim, the contractor must be a party to a federal government contract.  So, if you are a subcontractor and are not in privity of the contract you are not covered by the Contract Dispute Act.  Does that mean you are not covered?  Not necessarily.  A prime contractor can sue the government using the Contract Dispute Act on your behalf by sponsoring your claim.  Also your surety company cannot file a claim either.

Now that we have discussed who can file a claim, let’s get into the steps to take to file your claim.

How to File Your Claim?

The first step you must make is to write a demand letter to the contracting officer.  You need to keep your end goal in mind while composing the letter.  That goal could be the compensation for the additional workload.  It could also be the adjustment or interpretation of a contract term or other relief relating to the contract.

When writing your letter, it is best to write the main facts as you see them.  Remember to always be polite!  And don’t be afraid to ask for what you want.  In addition, set a deadline for the contracting officer to respond to your letter.  Lastly, end the letter by stating that you will promptly seek legal remedies if the government does not meet your demand.  This goes without saying but remember to make and keep copies for your records.

Now if your monetary claims are greater than $100,000 your claim needs to be certified.  You will need to state that your claim is made in good faith.  Ensure that your supporting data is accurate and complete to the best of your knowledge and belief.  I would add this statement to the letter. In addition, I would include a copy of your supporting documentation to help support your case.  Also make sure that the amount of money you are demanding accurately effects the contract adjustment for which you believe the government is liable.  Lastly ensure that the individual submitting the claim is authorized to do so on the contractor’s behalf.

Next we will talk about the length of time a contracting officer has to make his or her determination.

Contracting Officers Decision

Generally, the contracting officer has 60 days to decide.  If your claim is greater than $100,000 then within that 60 days, the contracting officer must notify the contractor of a firm date by which a final decision will be made.  The contracting officer’s decision is final.  If you are not in agreement, then you will need to file your claim with the United States Court of Federal Claims or the Board of Contract Appeals.


This is one of those situations where it is best to have an attorney advise and help you through the process.  They can be worth their weight in gold in these situations.  Remember that sooner or later you will face a government claim.  Be sure that you take the appropriate steps to help you in your case.  The first step is to take copious notes.  You will need these as you compose your demand letter to the contracting officer.  Your supporting documentation can go a long wait to ensuring that you receive the moneys or relief that you are do.


For more articles.

Support our channel: 
Subscribe to Our Podcast:
Provide a Review of Our Podcast
Continued support:
One-Time support: