Dispute Clauses in Government Contracts
Dispute clauses in government contracts are governed by 48 CFR (Code of Federal Regulation) 52.233-1, along with 41 U.S.C. (United States Code), Chapter 71.3 min read
Dispute clauses in government contracts are governed by 48 CFR (Code of Federal Regulation) 52.233-1, along with 41 U.S.C. (United States Code), Chapter 71, Contract Disputes. Specifically, in 1978, the Contract Disputes Act (CDA) was created to provide specific procedures dealing with government contract disputes.
For example, if a federal contractor wants to dispute a contract that he or she entered into with a government agency, then the CDA will process such a dispute. For this reason, the CDA has a standard dispute clause that is used in government contracts, which identified the obligation of a federal contractor who is in dispute with the government. The overall purpose of the dispute clause is to ensure that the federal contractor continues performing under the contract until the dispute has been settled. Therefore, if the federal contractor wants his rights to be reviewed it is important for the contractor to follow the CDA’s mandatory procedures so not to risk losing such rights during the dispute resolution process.
Government Contract: An Overview
Government contracts are highly regulated by both statutes and regulations.
These laws identify several items of interest if being faced with a government contract dispute, including the following:
- The method that a government agency must use to solicit a contract
- How the government agency can negotiate the contract
- How the agency can reward a contract to a federal contractor
- The costs that the government will reimburse if additional costs are incurred on the federal contractor
The government agencies entering into contracts usually include several provisions, including issues of affirmative action, drug-free requirements, subcontracting, and employee wages for those who are conducting work for the government agency.
Board of Contract Appeals Board
There are 11 board of contract appeals (BCA) agencies, all of which were created to hear and determine the appropriate action for contract disputes between government agencies and federal contractors. Such appeals agencies are subject to the rules under the CDA. Therefore, if a dispute arises and one of the parties isn’t happy with the outcome, either party can appeal to the BCA within a certain period of time.
When a contractor files an appeal, he or she must file a Notice of Appeal with the appropriate BCA within 90 days after receiving the board’s final decision.
The appeal is usually a letter that simply identified why the party believes the wrong decision was made. Thereafter, the BCA will provide a docket number for the appeal to both parties. Within 30 days after the docket number was provided, the party appealing must also file a complaint. After the complained is filed, the government agency will then have 30 days to answer the complaint.
The case will then go through the typical discovery phase, as with most cases. This is where additional documentation and evidence is filed and shared with the other party. Furthermore, the appealing party can also call a subcontractor as a witness if need be.
Keep in mind that BCA appeals are usually less formal than most court cases. The BCA administrative judge will hear the case. After this stage, the case will be heard, and decisions will be rendered by a 3-judge panel. If the losing party is still unhappy with the outcome of the case, he or she can appeal to the Federal Circuit Court of Appeals.
U.S. Court of Federal Claims Appeals
As previously noted, after the appeals board has rendered a decision, the federal contractor has a period of one year to file a complaint. Therefore, after the 3-judge panel has heard the appeal and made a decision, you have one year to determine if you will appeal again by filing a complaint with the U.S. Court of Federal Claims Appeals.
The government agency will then have 60 days to file an answer. After the answer is filed, discovery can be conducted by both parties. While the BCA is less formal in their procedures, the Court of Federal Claims is more formal in the complaint process. The decision will be made by only one judge as opposed to a 3-judge panel. Thereafter, the federal contractor can appeal again up to the Federal Circuit Court of Appeals.
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