Government Contract Law

*Government Contract Law*

Undergrad Research Paper:

Government Claims

After many years of failed attempts at resolving who had the appropriate authority to resolve issues that arose in contracts, Congress finally passed Contract Disputes Act of 1978. This act set out procedures for filing and resolving claims between Contractors and the Government. It also provides for the payment of interest on contractor claims, certification of contractor claims, and a civil penalty for contractor claims that are fraudulent or based on a misrepresentation of fact. The Contract Disputes Act of 1978, also known as CDA, was one of the first forms of Alternate Dispute Resolution specifically devised for contract disputes. It requires the Boards of Contract Appeals to “provide to the fullest extent practicable, informal, expeditious, and inexpensive resolution of disputes.” It was designed to encourage the resolution of contract disputes by negotiation prior to the onset of formal litigation.

 A claim is a written demand by the contractor seeking an adjustment to the contract terms, payment, or other relief arising under the contract. There are a variety of situations that cause disputes between the government and contractor. A dispute could be caused by the inability to agree upon an equitable adjustment, inability to agree upon the amount due following a termination for convenience, disallowance of costs, or Cost Accounting Standards noncompliance.

“The three principal means of disputes resolution between the contractor and the Contracting Officer are unassisted negotiation, Alternate Dispute Resolution ("ADR"), and appeal of a Contracting Officer's Final Decision to the Armed Services Board of Contract Appeals ("ASBCA") or the United States Court of Federal Claims ("COFC") under the Contract Disputes Act of 1978 ("CDA")” (DCMA.MIL).

In an unassisted negotiation, the parties attempt to reach a settlement without involvement of outside parties. If the negotiation is successful, parties would have identified the issues upon which they differ, disclosed their respective needs and interests, and identified possible settlement options, as well as negotiated terms and conditions of agreement. The goal in unassisted negotiation is to make sure that each party is in a better position than if they had not negotiated.

        The Government first prefers that these disputes be resolved mutually between the Contracting Officer and the Contractor at the lowest possible appropriate Contracting Officer’s level. The parties may use ADR such as mediation and arbitration by a neutral party, to resolve their issues. “Alternative dispute resolution (ADR) means any type of procedure or combination of procedures voluntarily used to resolve issues in controversy. These procedures may include, but are not limited to, conciliation, facilitation, mediation, fact-finding, minitrials, arbitration, and use of ombudsmen” (Acquisition.gov).