The ability for a Government contractor to secure fair resolution of a contract dispute is essential for maintaining a vibrant competitive marketplace for federal contracts. The perceived fairness of the contract dispute resolution process is influential on contractor participation. S. Rep. No. 95-1118, at 4 (1978) (“The way potential contractors view the disputes-resolving system influences how, whether, and at what prices they compete for Government contract business.”). Yet even after passage of the Contract Disputes Act of 1978, it is often difficult for a contractor to secure a review of a claim on the merits due to a barrage of procedural and jurisdictional hurdles. The U.S. Court of Appeals for the Federal Circuit has cleared some of the thicket in recent years by reiterating its commonsense approach to evaluating the sufficiency of claims, finding that if a submission meets the requirements of a claim, it may be heard on the merits, even if it was not originally styled as a claim.
This Feature Comment discusses this recent guidance, including the Federal Circuit’s treatment of the difficult question of which contractor submissions may be treated as valid claims under the CDA, even if not styled as such in the first instance. We then offer practical guidance for contractors navigating these issues.
Welcome back to our “Lifecycle of a Claim” series. This series explores the Contract Disputes Act (“CDA”) claims process, with practical guidance stemming from recent case law every step of the way. Click the subscribe button on the right to get timely updates right in your inbox!
Click here to read our first post and here to read our second post. This post focuses on Step 5 of this process: submitting a claim.
Seven Elements for Submitting a Claim
Once a contractor has made the decision to pursue a CDA claim, the contractor must ensure that it follows the Contract Disputes Act or risk jeopardizing its ability to obtain meaningful judicial review. While the Federal Circuit has made clear that a claim need not take “any particular form or use any particular wording,” below are seven fundamental elements that should be included:
Welcome back to our “Lifecycle of a Claim” series. This series explores the Contract Disputes Act claims process, with practical guidance stemming from recent case law every step of the way. Click the subscribe button on the right to get timely updates right in your inbox!
Click here to read our first post (covering Steps 1 and 2 of the infographic). This post focuses on Steps 3 and 4 of this process: submitting a request for equitable adjustment (“REA”) and negotiating the REA with the contracting officer.
Terminology Defined: What Is the Difference between an REA and a Claim?
There are two primary methods for pursuing a contract adjustment following a change: submitting an REA or filing a claim.
REA: A request (rather than a demand) to negotiate with the contracting officer to adjust the contract for price, time, or other terms. There is no FAR definition of an REA but generally an REA does not expressly or implicitly request a contracting officer’s final decision (“COFD”) or contain the FAR 33.207(a) certification.
Claim: A “written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract.” FAR 2.101; FAR 52.233-1(c).
Welcome to our new “Lifecycle of a Claim” series. This series will explore the Contract Disputes Act claims process, with practical guidance stemming from recent case law every step of the way. Click the subscribe button on the right to get timely updates right in your inbox!
The claims landscape for government contractors can be a minefield of both procedural and substantive issues. Through this series, we are providing a guide to one common type of claim: those arising out of a “change” to the contract.
This post focuses on Steps 1 and 2 of this process: identifying when a change has occurred and providing timely notice to the Contracting Officer. We begin with a few foundational questions:
What is a change?
There are two primary types of changes:
Actual Changes: According to the Federal Acquisition Regulation (“FAR”), a change occurs when the Contracting Officer issues a written order to make changes within the general scope of the contract to matters such as drawings, designs, or specifications; the method of shipment or packing; or the place of delivery. See, e.g., FAR 52.243-1.
Constructive Changes: A constructive change arises when the contractor is required to perform work beyond the contract requirements, but the Government does not issue a formal change order. Constructive changes can arise from informal orders, defective specifications or other misrepresentations, interference from the Government, or constructive accelerations of performance.
Understanding the basics of cost realism can help offerors submit more competitive proposals and withstand cost realism challenges to award. The Government Accountability Office (“GAO”) cites cost realism as one of its “most prevalent reasons for sustaining protests” in its Fiscal Year 2021 Bid Protest Report.
What is a cost realism analysis?
A cost realism analysis is a FAR 15.404-1(d)(1)-prescribed proposal analysis technique where the agency determines if the proposed costs are realistic for the work to be performed. In a cost reimbursement contract, an offeror’s proposed costs are not controlling because agencies are responsible for all actual and allowable costs. A cost realism analysis determines if an offeror is proposing unrealistically low costs to secure award. An agency cost realism analysis evaluates each offeror’s proposed cost elements (e.g., direct costs, overhead, G&A, material and subcontracting, etc.) for the unique technical approach proposed to determine the expected cost of performance. If the agency determines a proposed cost element is unrealistic, the agency can adjust the offeror’s evaluated cost, typically upward. The agency uses each offeror’s evaluated cost to select the best value awardee. However, the contract award reflects the awardee’s proposed total cost.