What are the mechanics in filing a claim against the government?

When a contract is entered into between two private individuals or entities, a breach of contract suit may be brought when contract disputes arise and/or when one party fails to perform according to the terms of the contract.  When a contract is entered into with the government, however, federal rules impose specific requirements and limitations on how disputes are handled. The rules that apply to disputes over federal contracts are found in The Contract Disputes Act (41 U.S.C. section 601 et seq.) Disputes over state contracts are handled in accordance with state law. The formal dispute resolution process commences when a contractor submits a claim to the contracting officer in accordance with the Contract Disputes Act. The claim, in writing, must demand money, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract (see FAR Clause 52.233-1, Disputes). The claim must also request the contracting officer for a final decision. On claims exceeding $100,000, there must be a good faith certification the accuracy and completeness of the supporting data.

A voucher, invoice, or other routine request for payment is not a claim under the CDA until the Government disputes the request either as to liability or amount, or it is not acted upon in a reasonable time. Once the submission is deemed a claim, interest begins to accrue on the claim at the rate established by the Secretary of the Treasury pursuant to Pub. L. 92-41 (85 Stat. 97). See 41 U.S.C. section 611. Moreover, the clock begins to run concerning the time in which the contracting officer must issue a final decision. Once the contracting officer issues a final decision, the contractor may appeal the decision to either the U.S. Court of Federal Claims or the applicable board of contract appeals.

The government generally has sovereign immunity, which means it cannot be sued unless it waives that immunity. The Contract Disputes Act is a limited waiver of immunity and is narrowly construed, so any contractor who has a dispute the government must be sure to follow procedures exactly in order to maintain a claim. If procedures are not followed and requirements not met, the disputing party may lose its right to make a claim.

To begin the dispute process, the disputing party must make a written demand seeking payment of a certain sum of money or other relief. The written demand must either specify a "sum certain" and it must demand that a final decision be made on the dispute. For claims where more than $100,000 in compensation is sought, the contractor must certify the claim and must attest that the contractor is making a good faith claim supported by data that is complete and correct/accurate as far as the contractor is aware. The contractor also must certify that the amount of compensation sought is an actual adjustment or amount that the contractor believes the government owes.

The first step in the resolution process is for the contractor who is filing the dispute and the government contracting agency to attempt to negotiate a resolution. If they are unable to do so, the official who entered into the contract must issue a written "final decision" articulating the contracting agencies position on the claim. Without a written final decision, the disputing contractor cannot go forward with his dispute. His only option at that point will be to wait until time passes and then view the government agency's decision as a "deemed denial." Deemed denials can be appealed either to the U.S. Court of Federal claims or to one of eleven agency boards that handle contract appeals. 

If the contracting official who issued the contact issues a final decision that the disputing contractor does not agree with, the contractor has 90 days to file a notice of appeal with the appropriate agency board handling contract appeals. This must be in writing and should include both the contract number and the date that the contracting officer issued the final decision. The case will be docketed, the contracting agency will be required to respond with its answer within 30 days, and the dispute will then be heard before an administrative law judge from one of the 11 agencies.
Disputes arising from government contractors can be very challenging to handle because of the number of different federal regulations that are in place and because of the stringent time limits. As such, it is very important to have legal representation for any claim against the federal government arising out of a contractual relationship.