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This article is for your personal information only and is not intended as legal advice. This area of the law is very complex. Every case is different and the information contained herein is general. This information is not intended to be legal advice. Nor is this material intended to replace consultation with a professional. Always consult a licensed attorney for your particular case. Nothing herein shall create an attorney/client relationship.
Claims: I Have A Government Contract But The Contracting Officer Is Not Treating Me Fairly, Or The Government Refuses To Pay Us!
Q. What is a government contracts claim?
A. A claim is a written demand or assertion by one of the contracting parties seeking the payment of money, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. A claim can be made by either the government or a contractor. If the government makes a claim, usually it is because it has overpaid a contractor due to some contract change or defective pricing issue on the part of the contractor. A claim is normally resolved under the contract clause that provides for relief to government contractors during contract performance.
Q. Our company is not being paid, and the government owes us lots of money. We can't afford to wait forever. What can we do?
A. If the government owes you money, there are laws that force the government to timely pay for correct invoices and also provide for interest if such payment is late. If the government incorrectly asserts your company is not owed money, you can file a claim for payment initially with the contracting officer, and you can then appeal his decision if you believe it's wrong. Such a claim depending on the amount may have to be "certified," and counsel can help you understand how that's done to protect your rights.
Q. How do I make a formal complaint about how I am being treated by the contracting officer?
A. An ordinary letter to a contracting officer or COTR/COR typically does not have teeth, visibility, or urgency. But a letter that is a "claim" has all three. A claim gets the contracting officer's attention as well as the attention of the lawyers in the agency. It also opens up the possibility that you can go over the head of the contracting officer and bring your complaint to a court if necessary (the U.S. Court of Federal Claims in Washington, DC) or to an independent board of contract appeals, also in Washington.
Q. Do I have to travel to Washington, DC if I file a claim?
A. No. The court and Appeal Boards may travel outside of Washington to where the contract is being performed or where the witnesses are located. Regardless, if you retain an experienced law firm in the Washington metropolitan area, the firm can help cover the procedural requirements that are involved.
Q. What is the downside of filing a claim?
A. One possible downside is that some contracting officers would consider you a trouble-maker or rate your performance on the contract lower because you filed a claim. Filing a claim can be a difficult decision, so it's important to consult with counsel to gauge the strength and merits of the claim.
Q. What if the contracting officer refuses to answer my claim?
A. Answer or no answer, you can bring your complaint to the Court or Board of Contract appeals. If the contracting officer does not promptly answer your claim, usually within 90 days, you can ignore the contracting officer's failure to answer and can then bring the claim directly to the court or a Board of Contract Appeals. The contracting officer cannot ultimately prevent your ability to have the claim resolved by being silent or unresponsive.
Q. What kind of issues can I bring to the contracting officer and court/board of contract appeals?
A. The most common issue is the government not paying you money that is owed for work performed. The government, for example, may read the contract differently than you do and is making you do work that is not part of the contract. If contracting officer is incorrectly reading the contract or making you do free work, you can take these issues over the contracting officer's head and get an independent opinion from the court or a board to protect your rights.
Q. Do I have to keep working while I fight it out with the contracting officer?
A. Yes, you must keep working absent extraordinary circumstances. You cannot stop while you and the contracting officer or court/Board decides who is right. You have a "duty to proceed" with the work and making sure the work gets done.
Q. What happens if the government wants to change the scope of a government contract during performance?
A. Most government contracts contain a Changes clause, which gives the government unilateral authority to order changes in the scope of work during a contractor's performance of a government contract. While changes to a government contract can often benefit the contractor by resulting in additional work, they can also create disputes between the government and the contractor. If the government orders a "change" that is within the scope of the original contract, most likely the government will not increase the price of the contract to account for the change. Most disputes here involve a contractor's claim that the "change" requires work beyond the scope of the original contract, and thus the contractor is entitled to additional payment to cover such a change. The government's position is often that the "change" is not really a change at all, and since the work being requested of the contractor is within the scope of the original contract, the contractor is not entitled to an upward adjustment of the contract price. A change falls under the general scope of the contract if total work performed is essentially the same work or end product as called for in the original contract.
Q. What is an "Equitable Adjustment"?
A. If the government agrees that the change is outside the scope of the contract, when these changes impact the cost of performing the contract or its schedule, an equitable adjustment may be used to ensure that a contractor is fairly compensated for additional unanticipated work. However, if the government orders a change in the contract that reduces the amount of work called for in the contract, the government may use and equitable adjustments to lower the overall contract price to account for the change.
Q. Do I need a lawyer to file a claim, or to go over the contracting officer's head to the court or a board of contract appeals?
A. You do not need a lawyer to get the contracting officer to consider your claim. If you do not like the contracting officer's decision and decide to appeal to a Board of Contract Appeals, you do not need a lawyer. However, some claims need to be "certified" with various legal requirements, and if the company does not have counsel it may not preserve its rights. Also, legal counsel can help with various procedural steps to help you protect the rights of the company, such as by pursuing certain discovery and by prosecuting claims before the Court of Federal Claims.
Q. Can I get the government to pay my legal fees?
A. As with protests, it is possible to get the government to pay a portion of your legal fees. Legal counsel would assist the company to preserve such rights. Keep in mind that the Board or Court of Federal Claims has alternative dispute resolution procedures that may be available to help negotiate cases and perhaps include reimbursement of legal fees to resolve a particular matter.
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