Government Contracting by — CDA Procedure

The first step in the CDA process is recognizing that a disagreement between the contractor and the government has risen to the level of a "claim" under the Contract Disputes Act. A claim is a written demand seeking, as a matter of right, the payment of money, adjustment of contract terms, or other relief. Not every disagreement is a claim — routine requests for equitable adjustment (REAs) become claims only when submitted as such or when the contracting officer denies them.

The contractor must submit a written claim to the contracting officer (CO) for a final decision. The claim must be a clear and unequivocal statement that gives the CO adequate notice of the basis and amount of the claim. For monetary claims, the claim must state a sum certain. The submission to the CO is a jurisdictional prerequisite — no appeal or court action can proceed without first presenting the claim to the CO.

The contracting officer must issue a final decision on the claim. The decision must be in writing, state the reasons for the decision, inform the contractor of appeal rights, and describe the applicable time limits for appeal. If the CO fails to issue a decision within the required timeframe, the contractor may treat the failure as a "deemed denial" and proceed to appeal.

A contractor may appeal a contracting officer's final decision to the cognizant Board of Contract Appeals (BCA) within 90 days. The two primary boards are the Armed Services Board of Contract Appeals (ASBCA) for DoD contracts and the Civilian Board of Contract Appeals (CBCA) for civilian agency contracts. Board proceedings are generally less formal than court proceedings and the boards have specialized expertise in government contract disputes.

As an alternative to a Board appeal, contractors may bring a CDA action directly in the U.S. Court of Federal Claims (COFC) within 12 months of receiving the contracting officer's final decision. The COFC is an Article I court located in Washington, D.C. that has nationwide jurisdiction over government contract disputes. COFC proceedings follow the Rules of the Court of Federal Claims (RCFC), which are modeled on the Federal Rules of Civil Procedure.

The CDA encourages the use of Alternative Dispute Resolution (ADR) techniques at every stage of the contract dispute process. ADR methods — including mediation, mini-trials, neutral evaluation, and settlement judges — can resolve disputes faster and at lower cost than formal litigation. Both the Boards and the COFC offer ADR programs, and agencies have their own ADR procedures.

Any contractor claim exceeding $100,000 must be certified by a person authorized to bind the contractor. The certification must state that the claim is made in good faith, that the supporting data are accurate and complete, and that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable. Defective certification was once a jurisdictional bar but is now curable under the 1992 CDA amendments.

The CDA provides that interest on contractor claims runs from the date the contracting officer receives the claim until payment. The interest rate is set by the Secretary of the Treasury and is published semiannually in the Federal Register. Interest is a significant component of large, long-running disputes and compounds the cost to the government of delayed resolution. Government claims against contractors also accrue interest.