7. Contract Disputes Act

• Pages: 441-468

441

CONTRACT DISPUTES ACT

7

Contract

Disputes

Act

441

Citations:

41 U.S.C.A. §§601-613 (2007); 28 U.S.C. §§1346(a)(2), 1491(a)(2),

2401(a), 2414, 2510, 2517 (2000); 31 U.S.C. §1304(a)(3)(C)(2000); en-

acted November 1, 1978 by Pub. L. No. 95-563, 92 Stat. 2383; significantly

amended April 2, 1982 by Pub. L. No. 97-164, title I, §§156-157, 161, 96

Stat. 25, 47-49, November 5, 1990 by Pub. L. No. 101-509, Sec. 104, 104

Stat. 1447, and November 15, 1990 by Pub. L. No. 101-552, 104 Stat. 273;

October 29, 1992 by Pub. L. No. 102-572, title IX, Sec. 907(a)(1),106 Stat.

4518; October 13, 1994 by Pub. L. No. 103-355, title II, Sec. 2351(a)((1)),

(b), (e), 2352, 108 Stat. 3322; February 10, 1996 by Pub. L. No. 104-106,

div. D, title XLIII, Sec. 4321(a)(6), (7), 4322(b)(6), 110 Stat. 671, 677;

October 19, 1996 by Pub. L. No. 104-320, Sec. 6, 110 Stat. 3871; November

18, 1997 by Pub. L. No. 105-85, div. A, title X, Sec. 1073(g)(3), 111 Stat.

1906; January 6, 2006 by Pub. L. No. 109-163, div A, title VIII, subtitle E,

§847(d)(1)-(4), 119 Stat. 3393; October 17, 2006 by Pub. L. No. 109-364,

div. A, title VIII, subtitle E, §857, 120 Stat. 2394.

Lead Agency:

Office of Federal Procurement Policy, Office of Management and Bud-

get, Washington, DC 20503 (202) 395-5802.

Overview:

Background. The Contract Disputes Act of 1978 was intended to bring

greater consistency, fairness, and efficiency to the resolution of disputes aris-

442 CONTRACT DISPUTES ACT

7

ing out of government contracts. Before the Act’s passage, this process was

governed by various contract clauses, agency regulations, judicial decisions,

and statutory provisions; procedures varied depending on the nature of the

dispute and the agency involved. The legislation reflected in large part the

recommendations of the Commission on Government Procurement, created

by Congress in 1969 to recommend improvements in the procurement pro-

cess.

Coverage. The Act and its procedures apply to claims arising under or

relating to express or implied contracts made by executive branch agencies

for the procurement of property other than real property, services, construc-

tion, alteration, repair, or maintenance of real property, or for the disposal of

personal property. The Act does not reach bid protests or proceedings for the

debarment or suspension of government contractors.

The term “claim” is not defined by the Act; however, the Federal Acquisi-

tion Regulation (FAR), a detailed regulation establishing uniform procedures

and policies for procurement by federal executive agencies, defines it as:

Claim, as used in this clause, means 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 re-

lating to this contract. . . . A voucher, invoice, or other routine re-

quest for payment that is not in dispute when submitted is not a

claim under the Act.1

Cognizable claims, include disputes arising under specific contract clauses

(for example, when the parties cannot agree on an amount of compensation

owed under clauses authorizing equitable adjustment for contract changes or

for site conditions different from those anticipated when the contract was

formed) as well as claims for breach of contract. Terminations for default are

considered claims by the government under the Act.

Agency Procedures. The system established by the Contract Disputes

Act begins with the contracting officer, an agency official authorized to enter

into, administer, and terminate contracts on behalf of the government. The

contracting officer plays a dual role in the disputes process, both representing

the government as a party to the contract and rendering decisions on claims

arising out of disputes between the parties. If a dispute arises during contract

performance that cannot be amicably resolved (e.g., through exchange of

148 C.F.R. §52.233-1(c) (2007).