Overview
FAR 33.213 establishes the Government’s authority to require a contractor to continue performance while a claim or dispute is pending a final resolution. It distinguishes between claims "arising under" the contract and those "relating to" the contract, ensuring that essential services or supplies are not interrupted during legal or administrative disagreements.
Key Rules
- Mandatory Performance: Under the Disputes statute (41 U.S.C. 7103(g)), agencies can compel a contractor to continue performance in accordance with the Contracting Officer’s decision while a claim is being resolved.
- "Arising Under" vs. "Relating To":
- Arising Under: Claims that can be resolved via a specific contract clause (e.g., Changes or Differing Site Conditions) other than the Disputes clause.
- Relating To: Claims that cannot be resolved under any clause other than the Disputes clause (often referred to as breach-of-contract claims).
- Statutory Scope: While the obligation historically only applied to claims "arising under" the contract, current law extends this to claims "relating to" the contract when specified.
- Financing Requirement: If a contract includes FAR 52.233-1 with its Alternate I, and a dispute "relating to" the contract occurs, the Contracting Officer must consider providing financing for the continued performance, provided the Government’s interest is secured.
Practical Implications
- No Work Stoppage: In most cases, contractors do not have the right to "walk off the job" due to a dispute; doing so puts them at high risk of a termination for default.
- Financial Safeguards: Alternate I serves as a critical mechanism for contractors to maintain cash flow during protracted "relating to" disputes, where the lack of a specific adjustment clause might otherwise cause financial exhaustion.