Overview
Subpart 33.2 implements the Contract Disputes Act (41 U.S.C. chapter 71), establishing the formal procedures and requirements for asserting, resolving, and appealing claims arising under or relating to Federal contracts. Its primary objective is to encourage the resolution of controversies at the Contracting Officer level through mutual agreement or Alternative Dispute Resolution (ADR) before resorting to formal litigation.
Key Rules
- Statute of Limitations: Both contractor and Government claims must be submitted in writing within 6 years of the "accrual of the claim" (the date when the liability was fixed and the injury known).
- Certification Requirement: For any contractor claim exceeding $100,000, the contractor must provide a specific formal certification stating the claim is made in good faith, data is accurate/complete, and the amount requested is the Government's liability.
- Final Decision Timelines:
- For claims $100,000 or less: The Contracting Officer (CO) must issue a decision within 60 days if requested.
- For claims over $100,000: The CO must issue a decision within 60 days or notify the contractor of the specific date by which a decision will be rendered.
- Deemed Denial: If the CO fails to issue a decision within the required timeframes, it is considered a "deemed denial," authorizing the contractor to file an appeal or suit immediately.
- Interest: The Government must pay interest on valid contractor claims from the date the CO receives the (properly certified) claim until the date of payment.
- Appeals Window: A contractor can appeal a CO’s final decision to the Agency Board of Contract Appeals (BCA) within 90 days or to the U.S. Court of Federal Claims within 12 months.
Responsibilities
- Contracting Officer (CO):
- Attempts to resolve issues in controversy before they become formal claims.
- Determines the date of claim accrual and documents receipt.
- Reviews facts, coordinates with legal counsel, and issues the formal "Final Decision."
- Refers suspected fraudulent claims to agency investigative officials.
- Must provide a written explanation if they reject a contractor's request for ADR.
- Contractors:
- Submit written claims within the 6-year window.
- Properly certify claims over $100,000.
- Must continue contract performance in accordance with the CO’s decision while a dispute is pending (unless an exception applies).
- Legal Counsel/Advisors:
- Provide mandatory advice to the CO regarding claims involving legal entitlement, rescission, or reformation.
- Assist in the preparation of the written final decision.
Practical Implications
- "Keep Working" Mandate: Perhaps the most significant practical reality is that contractors generally cannot stop work because of a dispute. Under FAR 52.233-1, a contractor must proceed diligently with performance pending a final resolution, or risk being terminated for default.
- The Power of ADR: Because formal litigation is expensive and time-consuming, the FAR strongly favors ADR. If a CO refuses ADR, they must justify it in writing, which puts pressure on the Government to at least consider mediation or fact-finding.
- Documentation is King: Since "accrual" begins when the party should have known of the injury, contractors and PMs must maintain rigorous records. Missing the 6-year window or failing to provide a proper certification for a $100k+ claim can lead to a total loss of legal recourse.
- Strategic Use of "Deemed Denials": If a CO is "slow-rolling" a decision, the contractor can use the expiration of the 60-day window to bypass the CO and move straight to a Board or Court, though this is often a last-resort tactical move.