Disputing Contract Issues

Now we turn our attention to the matter of "disputes," which is very different from a protest. As a government contractor, you have the right to "dispute" all material disagreements or issues in controversy that relate to a contract and to file a claim.

According to the regulations, a "claim" means a written demand or assertion by one of the contracting parties seeking, as a matter of right, the payment of money; the adjustment or interpretation of contract terms, including the period of performance; or other relief arising under or relating to the contract. A voucher, invoice, or other routine request for payment or equitable adjustment that is not in dispute when submitted is not considered a claim. The submission may be converted to a claim, by written notice to the contracting officer if it is disputed either as to liability or amount, or is not acted upon in a reasonable time.

Warning Only a contractor, as a party to a federal government contract, is allowed to file a dispute claim. This intentionally excludes a subcontractor from being able to enter into the disputes process.

What kinds of issues do contractors typically dispute? Contractors dispute any number of things, including defective specifications, changing delivery dates, failure by the government to supply a contractor with what he/she needs to fulfill a contract, or any other "event" that would keep a contractor from completing the contract or from being able to perform the contract. The dispute is triggered when one of these events occurs and all informal attempts to resolve the issue fail.

Dispute Procedures

A contractor who wants to dispute an action or issue is required to submit the claim in writing to the contracting officer. In it, the contractor should describe the situation, state what action it is asking for, and request a final decision. After the contracting officer receives the contractor's written notice, he/she will have up to 60 days to respond. If the contractor does not hear from the contracting officer within that 60-day period, the contractor may consider its request denied.

If the contracting officer denies the action, the contractor can file a written "Notice of Appeal" with the Contracts Appeals Board and send a copy to the contracting officer. The contractor has only 90 days to do this.

Warning If your claim is denied by the Contracting Officer and you decide to pursue your claim with the Contracts Appeals Board, carefully consider all the facts and document everything. Do not try to overstate or exaggerate the facts to win your case. If you are found to have misrepresented a fact with intent to deceive or mislead, your claim will be found to be fraudulent and you might have to pay a civil penalty. Whatever else happens, your days of doing business with the government will be over forever.

If the contracting officer denies your action, you also have the option of applying directly to the Court of Federal Claims instead of going through the Notice of Appeal process. This court is authorized by the Contracts Disputes Act to hear and decide an appeal of a contracting officer's final decision, but it can take up to a year before you receive a decision.

One major consideration is time. Claims under $100,000 tend to move through the system faster then a claim over that amount. This is because the Board of Contract Appeals is mandated to make a decision within 60 to 120 days, respectively. The smaller claims will take priority and the board will postpone an appeal concerning a larger dollar contract. The Court of Federal Claims could take up to a year or more just to reach the trial stage. If the dollar amount of the contract is large enough, the dispute could conceivably go to the U.S. Supreme Court.

Work Smart If you decide to go through the dispute process, you can probably do most of the work yourself in the early stages if you read the FAR, follow the rules, and/or get help from a PTAC. However, if your claim is denied by the Contracting Officer and you want to appeal the adverse decision, you will need legal assistance in these later appeals. For information, check out this site.