Difference Between REA vs Contract Disputes Act Claims – Appealing Contracting Officer’s Final Decision

Government contractors often find themselves in a precarious position when they file a request for equitable adjustment (Government REA Contracting Act) but later made the argument that it meets the requirements of a Contract Disputes Act claim.

Understanding the applicable laws can save contractors thousands in attorney fees when seeking a change order or increasing their chances of getting an equitable adjustment under the FAR.

What is the Contract Disputes Act?

The Contract Disputes Act of 1978 (CDA) is a federal law enacted to provide a uniform, fair and efficient system of resolving contract disputes between the United States government and its contractors. The CDA establishes procedures for filing claims, negotiating an equitable adjustment, obtaining a final administrative decision by the contracting officer, and filing suit in the U.S. Court of Federal Claims or respective board of contract appeals when necessary.

How to Prepare a Legally Sufficient Claim to the Contracting Officer

To prepare a legal contract dispute (CDA) claim, you must follow very distinct criteria. Under the CDA you must:

1. Must make a written demand or assertion for a certain sum of money or ask for other relief under the contract. A mere notification of an issue or amount will not qualify as a CDA claim.
2. Your CDA claim must request payment, adjustment to contract terms, or other relief related to a contract between the government and your company. A claim must be a sum certain or calculated by a simple formula. Approximations won’t qualify.
3. When the claim exceeds $100,000, you must certify it, stating that it is submitted in good faith and includes correct and complete data. The claim must come from an authorized party in the company.
4. You must submit the claim within a six-year statute of limitations.
5. Your CDA claim should be submitted to a contracting officer, not a contracting officer’s representative, or another administrative official.
6. Your claim must contain a request for a final decision or a clear indication that it’s being issued by the contracting officer. Including sufficient information to show the basis for the relief requested is also advised.

Note: Missing any one of the above requirements could get your claim denied or your appellate case dismissed. This is why having an experienced government contract dispute lawyer can be helpful.

What is the Difference Between a Request for Request for Equitable Adjustment and a Contract Dispute Act (CDA) Claim?

A Contract Disputes Act (CDA) claim is a formal process whereby a contractor requests payment, and the government responds with a decision. If this decision is unfavorable, the contractor may appeal the decision within 90 days to the Board of Contract Appeals (BCA) or within one year to the Court of Federal Claims.

On the other hand, a Request for Equitable Adjustment (REA) is an informal process where a contractor may ask for a change order or submit an uncertified request. This approach provides the government and contractor with an opportunity to discuss and negotiate a request outside of time limits imposed by the CDA. If the contracting officer agrees to issue a change order, both parties avoid a formal dispute resolution process. Nonetheless, contractors should avoid getting bogged down in constant letter writing and negotiations. If it becomes apparent that the contracting officer has no intention of issuing a change order, the contractor should proceed to the formal CDA claims process.

An agency is required to issue a final decision within 60 days of a CDA claim. Failure to issue a final decision can deem the claims as denied, which can be appealed to a Board of Contract Appeals or the Court of Federal Claims. REAs are not subject to any time limit, providing both parties with an informal opportunity to negotiate and avoid the formal dispute process. Contractors should be cautious, however, not to engage in lengthy negotiations that could potentially harm their position in the event that the government declines the REA and the contractor is forced to pursue a CDA claim.

REA Government Contracts v Contract Disputes Act Claim  Change Order Requirements

When it comes to REA government contracts and change order requests, the Contract Disputes Act states that ” a contractor claim against the Federal Government REA construction claims to a contract shall be submitted to the contracting officer for a decision.” 41 USC 7103 (a)(l). This is an important requirement when looking at the Board’s jurisdiction over a contract claim.  Boards of Contract Appeals can only hear a contractor claim appeals case when you submit a legally sufficient claim for the contracting officer’s final decision.

The Contract Disputes Act does not define the term “claim.” However, when compared to the Government REA Contracting Act, the FAR defines a “claim” as “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 relating to the contract.” See FAR 2.101. Furthermore, any claim that exceeds $100,000 must be certified under 41 USC 7103(b).

• Appeal Boards look at Contract Disputes Act claims on the merits and facts of each case.
• Appeal Boards use a “common sense” approach

 Courts look at the totality of the correspondence between the contractor and the government when determining the sufficiency of a claim or change order request for adjustment.  See Lael Al Sahab & Co., ASBCA Nos. 58344, 59009, 15-1 BCA ~ 35,809 at 175,129; Vibration & Sound Solutions Ltd., ASBCA No. 56240, 09-2 BCA ~ 34,257 at 169,270.

How long does a contractor have to submit a claim to the contracting officer? Depending on the facts of each case,  your claim extra work for as a contractor against the Federal Government relating to a contract and each claim by the Federal Government against a contractor relating to a contract shall be submitted within 6 years after the accrual of the claim.

Submission of a CDA Claim and Change Order

Requesting Contracting Officer’s Final Decision: The Contract Disputes Act does not give a particular format or give any precise wording. Courts have ruled that government contractors need only submit “a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim.”  See Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987).

• A routine request for payment is not a claim under the CDA statute.

What Happens After You Submit a CDA Claim to the Contracting Officer?

When you submit a Contracts Disputes Act claim to a contracting officer that meets all the criteria, he or she must issue a final decision on the claim. For claims that are under $100,000, the decision must be made within sixty days of receiving it. If the claim is for more than $100,000, the officer can issue a final decision within sixty days, or provide a reasonable date for when a final decision will be given.

However, if the contracting officer fails to provide a final decision within a reasonable time, the contractor can proceed with an appeal to the BCA or the Court of Federal Claims. It’s important to note that appeals resulting from a “deemed denial” may lead to an order requiring the contracting officer to make a final decision.

Contracting Officer Final Decision

Each claim by a contractor against the Federal Government relating to a contract shall be submitted to the contracting officer for a decision. Each claim by a contractor against the Federal Government relating to a contract shall be in writing. Courts have ruled that a request for a contracting officer’s final decision need not be explicit, however, but may be implied from the context of the submission. See Rex Systems, Inc. v. Cohen, 224 F.3d 1367, 1372 (Fed. Cir. 2000); Ellett, 93 F.3d at 1543. See Federal Circuit Court reverses Court of Federal Claims on REA claim for negligent estimates.

As a government contractor, you don’t want to take chances with free language. You will spend thousands in attorney fees litigating the question of whether your Government REA met the requirements of the Contract Disputes Act. When seeking a change order of equitable adjustment and extra work from the government, you should always seek legal review to make sure that your contract claim against the government meets the CDA requirements. 

How to Appeal the Contracting Officer’s Final Decision of a Contract Disputes Act Claim?

It’s paramount for government contractors to comply with the Contract Disputes Act (CDA) when appealing a final decision. Following the CDA guidelines ensures contractors can effectively challenge a contracting officer’s final decision before the Court of Federal Claims (COFC) or the BCA that has jurisdiction over their contract.

While timing plays an important role in deciding where to file an appeal, contractors should also consider other factors such as procedural rules, the ability of the government to bring a False Claims Act counterclaim, and their preference for a formal or less formal litigation process.

Please note that once you choose a forum to file their appeal, their decision is final, and they can’t pursue their CDA claim in the other forum. Moreover, it’s important to note that filing a Contract Disputes Act claim appeal with a Board doesn’t require a formal complaint.

Instead, the appeal should be written, express dissatisfaction with the final decision, show intent to appeal and sent both to the contracting officer and the Board. Conversely, if you want to appeal the contracting officer’s decision before the Court of Federal Claims, the contractor must file a complaint that sets forth the factual and legal basis for their case.

Can Government Contractors Get Attorneys Fees When Appealing a Contract Disputes Act Case?

Government contractors should be aware that, in general, they may not receive attorneys’ fees when pursuing a claim under the Contract Disputes Act (CDA). However, there are certain circumstances where attorneys’ fees can be recovered. For instance, if an individual or small business is deemed to be the prevailing party and the government’s position was not substantially justified, the Equal Access to Justice Act permits the recovery of attorneys’ fees up to $125 per hour. Additionally, the claimant must meet the size standards set forth by the Act.

For immediate help with your Contract Disputes Act claim, call Watson &. Associates, LLC at 1.866.601.5518.