Subpart 33.2 - Disputes and Appeals

Parent topic: Part 33 Protests, Disputes, and Appeals

33.201 Definitions.

As used in this subpartAccrual of a claim means the date when all events, that fix the alleged liability of either the

Government or the contractor and permit assertion of the claim, were known or should have been

known. For liability to be fixed, some injury must have occurred. However, monetary damages need

not have been incurred.

Alternative dispute resolution (ADR) means any type of procedure or combination of procedures

voluntarily used to resolve issues in controversy. These procedures may include, but are not limited

to, conciliation, facilitation, mediation, fact-finding, minitrials, arbitration, and use of ombudsmen.

Defective certification means a certificate which alters or otherwise deviates from the language in

33.207(c) or which is not executed by a person authorized to bind the contractor with respect to the

claim. Failure to certify shall not be deemed to be a defective certification.

Issue in controversy means a material disagreement between the Government and the contractor

that-

(1) May result in a claim; or

(2) Is all or part of an existing claim.

Misrepresentation of fact means a false statement of substantive fact, or any conduct which leads to

the belief of a substantive fact material to proper understanding of the matter in hand, made with

intent to deceive or mislead.

33.202 Disputes.

41 U.S.C. chapter 71, Disputes, establishes procedures and requirements for asserting and resolving

claims subject to the Disputes statute. In addition, the Disputes statute provides for-

(a) The payment of interest on contractor claims;

(b) Certification of contractor claims; and

(c) A civil penalty for contractor claims that are fraudulent or based on a misrepresentation of fact.

33.203 Applicability.

(a) Except as specified in paragraph (b) of this section, this part applies to any express or implied

contract covered by the Federal Acquisition Regulation.
(b) This subpart does not apply to any contract with-

(1) A foreign government or agency of that government; or

(2) An international organization or a subsidiary body of that organization, if the agency head

determines that the application of the Disputes statute to the contract would not be in the public

interest.

(c) This part applies to all disputes with respect to contracting officer decisions on matters "arising

under" or "relating to" a contract. Agency Boards of Contract Appeals (BCAs) authorized under the

Disputes statute continue to have all of the authority they possessed before the Disputes statute with

respect to disputes arising under a contract, as well as authority to decide disputes relating to a

contract. The clause at 52.233-1, Disputes, Disputes, recognizes the "all disputes" authority

established by the Disputes statute and states certain requirements and limitations of the Disputes

statute for the guidance of contractors and contracting agencies. The clause is not intended to affect

the rights and obligations of the parties as provided by the Disputes statute or to constrain the

authority of the statutory agency BCAs in the handling and deciding of contractor appeals under the

Disputes statute.

33.204 Policy.

The Government’s policy is to try to resolve all contractual issues in controversy by mutual

agreement at the contracting officer’s level. Reasonable efforts should be made to resolve

controversies prior to the submission of a claim. Agencies are encouraged to use ADR procedures to

the maximum extent practicable. Certain factors, however, may make the use of ADR inappropriate

(see 5 U.S.C.572(b)). Except for arbitration conducted pursuant to the Administrative Dispute

Resolution Act (ADRA), (5 U.S.C.571, etseq.) agencies have authority which is separate from that

provided by the ADRA to use ADR procedures to resolve issues in controversy. Agencies may also

elect to proceed under the authority and requirements of the ADRA.

33.205 Relationship of the Disputes statute to Pub.

L.85-804.

(a) Requests for relief under Public Law85-804 (50 U.S.C.1431-1435) are not claims within the

Disputes statute or the Disputes clause at 52.233-1, Disputes, and shall be processed under subpart 

50.1, Extraordinary Contractual Actions. However, relief formerly available only under Public

Law85-804; i.e., legal entitlement to rescission or reformation for mutual mistake, is now available

within the authority of the contracting officer under the Contract Disputes statute and the Disputes

clause. In case of a question whether the contracting officer has authority to settle or decide specific

types of claims, the contracting officer should seek legal advice.

(b) A contractor’s allegation that it is entitled to rescission or reformation of its contract in order to

correct or mitigate the effect of a mistake shall be treated as a claim under the Disputes statute. A

contract may be reformed or rescinded by the contracting officer if the contractor would be entitled

to such remedy or relief under the law of Federal contracts. Due to the complex legal issues likely to

be associated with allegations of legal entitlement, contracting officers shall make written decisions,

prepared with the advice and assistance of legal counsel, either granting or denying relief in whole
or in part.

(c) A claim that is either denied or not approved in its entirety under paragraph (b) of this section

may be cognizable as a request for relief under Public Law85-804 as implemented by subpart 50.1.

However, the claim must first be submitted to the contracting officer for consideration under the

Disputes statute because the claim is not cognizable under Public Law85-804, as implemented by

subpart 50.1, unless other legal authority in the agency concerned is determined to be lacking or

inadequate.

33.206 Initiation of a claim.

(a) Contractor claims shall be submitted, in writing, to the contracting officer for a decision within 6

years after accrual of a claim, unless the contracting parties agreed to a shorter time period. This 6-

year time period does not apply to contracts awarded prior to October 1,1995. The contracting

officer shall document the contract file with evidence of the date of receipt of any submission from

the contractor deemed to be a claim by the contracting officer.

(b) The contracting officer shall issue a written decision on any Government claim initiated against a

contractor within 6 years after accrual of the claim, unless the contracting parties agreed to a

shorter time period. The 6-year period shall not apply to contracts awarded prior to October 1,1995,

or to a Government claim based on a contractor claim involving fraud.

33.207 Contractor certification.

(a) Contractors shall provide the certification specified in paragraph (c) of this section when

submitting any claim exceeding $100,000.

(b) The certification requirement does not apply to issues in controversy that have not been

submitted as all or part of a claim.

(c) The certification shall state as follows:

I certify that the claim is made in good faith; that the supporting data are accurate and complete to

the best of my knowledge and belief; that the amount requested accurately reflects the contract

adjustment for which the contractor believes the Government is liable; and that I am duly authorized

to certify the claim on behalf of the contractor.

(d) The aggregate amount of both increased and decreased costs shall be used in determining when

the dollar thresholds requiring certification are met (see example in 15.403-4(a)(1)(iii) regarding

certified cost or pricing data).

(e) The certification may be executed by any person authorized to bind the contractor with respect

to the claim.

(f) A defective certification shall not deprive a court or an agency BCA of jurisdiction over that claim.

Prior to the entry of a final judgment by a court or a decision by an agency BCA, however, the court

or agency BCA shall require a defective certification to be corrected.
33.208 Interest on claims.

(a) The Government shall pay interest on a contractor’s claim on the amount found due and unpaid

from the date that-

(1) The contracting officer receives the claim (certified if required by 33.207(a)); or

(2) Payment otherwise would be due, if that date is later, until the date of payment.

(b) Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as

provided in the Disputes statute, which is applicable to the period during which the contracting

officer receives the claim and then at the rate applicable for each 6-month period as fixed by the

Treasury Secretary during the pendency of the claim. (See the clause at 52.232-17 for the right of

the Government to collect interest on its claims against a contractor.)

(c) With regard to claims having defective certifications, interest shall be paid from either the date

that the contracting officer initially receives the claim or October 29,1992, whichever is later.

However, if a contractor has provided a proper certificate prior to October 29,1992, after submission

of a defective certificate, interest shall be paid from the date of receipt by the Government of a

proper certificate.

33.209 Suspected fraudulent claims.

If the contractor is unable to support any part of the claim and there is evidence that the inability is

attributable to misrepresentation of fact or to fraud on the part of the contractor, the contracting

officer shall refer the matter to the agency official responsible for investigating fraud.

33.210 Contracting officer’s authority.

Except as provided in this section, contracting officers are authorized, within any specific limitations

of their warrants, to decide or resolve all claims arising under or relating to a contract subject to the

Disputes statute. In accordance with agency policies and 33.214, contracting officers are authorized

to use ADR procedures to resolve claims. The authority to decide or resolve claims does not extend

to-

(a) A claim or dispute for penalties or forfeitures prescribed by statute or regulation that another

Federal agency is specifically authorized to administer, settle, or determine; or

(b) The settlement, compromise, payment, or adjustment of any claim involving fraud.

33.211 Contracting officer’s decision.

(a) When a claim by or against a contractor cannot be satisfied or settled by mutual agreement and a

decision on the claim is necessary, the contracting officer shall-
(1) Review the facts pertinent to the claim;

(2) Secure assistance from legal and other advisors;

(3) Coordinate with the contract administration officer or contracting office, as appropriate; and

(4) Prepare a written decision that shall include-

(i) A description of the claim or dispute;

(ii) A reference to the pertinent contract terms;

(iii) A statement of the factual areas of agreement and disagreement;

(iv) A statement of the contracting officer’s decision, with supporting rationale;

(v) Paragraphs substantially as follows:

"This is the final decision of the Contracting Officer. You may appeal this decision to the agency

board of contract appeals. If you decide to appeal, you must, within 90 days from the date you

receive this decision, mail or otherwise furnish written notice to the agency board of contract

appeals and provide a copy to the Contracting Officer from whose decision this appeal is taken. The

notice shall indicate that an appeal is intended, reference this decision, and identify the contract by

number.

With regard to appeals to the agency board of contract appeals, you may, solely at your election,

proceed under the board’s-

(1) Small claim procedure for claims of $50,000 or less or, in the case of a small business concern

(as defined in the Small Business Act and regulations under that Act), $150,000 or less; or

(2) Accelerated procedure for claims of $100,000 or less.

Instead of appealing to the agency board of contract appeals, you may bring an action directly in the

United States Court of Federal Claims (except as provided in 41 U.S.C.7102(d), regarding Maritime

Contracts) within 12 months of the date you receive this decision"; and

(vi) Demand for payment prepared in accordance with 32.604 and 32.605 in all cases where the

decision results in a finding that the contractor is indebted to the Government.

(b) The contracting officer shall furnish a copy of the decision to the contractor by certified mail,

return receipt requested, or by any other method that provides evidence of receipt. This requirement

shall apply to decisions on claims initiated by or against the contractor.

(c) The contracting officer shall issue the decision within the following statutory time limitations:

(1) For claims of $100,000 or less, 60 days after receiving a written request from the contractor that

a decision be rendered within that period, or within a reasonable time after receipt of the claim if

the contractor does not make such a request.

(2) For claims over $100,000, 60 days after receiving a certified claim; provided, however, that if a

decision will not be issued within 60 days, the contracting officer shall notify the contractor, within

that period, of the time within which a decision will be issued.
(d) The contracting officer shall issue a decision within a reasonable time, taking into account-

(1) The size and complexity of the claim;

(2) The adequacy of the contractor’s supporting data; and

(3) Any other relevant factors.

(e) The contracting officer shall have no obligation to render a final decision on any claim exceeding

$100,000 which contains a defective certification, if within 60 days after receipt of the claim, the

contracting officer notifies the contractor, in writing, of the reasons why any attempted certification

was found to be defective.

(f) In the event of undue delay by the contracting officer in rendering a decision on a claim, the

contractor may request the tribunal concerned to direct the contracting officer to issue a decision in

a specified time period determined by the tribunal.

(g) Any failure of the contracting officer to issue a decision within the required time periods will be

deemed a decision by the contracting officer denying the claim and will authorize the contractor to

file an appeal or suit on the claim.

(h) The amount determined payable under the decision, less any portion already paid, should be

paid, if otherwise proper, without awaiting contractor action concerning appeal. Such payment shall

be without prejudice to the rights of either party.

33.212 Contracting officer’s duties upon appeal.

To the extent permitted by any agency procedures controlling contacts with agency BCA personnel,

the contracting officer shall provide data, documentation, information, and support as may be

required by the agency BCA for use on a pending appeal from the contracting officer’s decision.

33.213 Obligation to continue performance.

(a) In general, before passage of the Disputes statute, the obligation to continue performance

applied only to claims arising under a contract. However, the Disputes statute, at 41 U.S.C.7103(g),

authorizes agencies to require a contractor to continue contract performance in accordance with the

contracting officer’s decision pending a final resolution of any claim arising under, or relating to, the

contract. (A claim arising under a contract is a claim that can be resolved under a contract clause,

other than the clause at 52.233-1, Disputes, that provides for the relief sought by the claimant;

however, relief for such claim can also be sought under the clause at 52.233-1. A claim relating to a

contract is a claim that cannot be resolved under a contract clause other than the clause at

52.233-1.) This distinction is recognized by the clause with its AlternateI (see 33.215).

(b) In all contracts that include the clause at 52.233-1, Disputes, with its AlternateI, in the event of a

dispute not arising under, but relating to, the contract, the contracting officer shall consider

providing, through appropriate agency procedures, financing of the continued performance;

provided, that the Government’s interest is properly secured.
33.214 Alternative dispute resolution (ADR).

(a) The objective of using ADR procedures is to increase the opportunity for relatively inexpensive

and expeditious resolution of issues in controversy. Essential elements of ADR include-

(1) Existence of an issue in controversy;

(2) A voluntary election by both parties to participate in the ADR process;

(3) An agreement on alternative procedures and terms to be used in lieu of formal litigation; and

(4) Participation in the process by officials of both parties who have the authority to resolve the issue

in controversy.

(b) If the contracting officer rejects a contractor’s request for ADR proceedings, the contracting

officer shall provide the contractor a written explanation citing one or more of the conditions in 5

U.S.C.572(b) or such other specific reasons that ADR procedures are inappropriate for the resolution

of the dispute. In any case where a contractor rejects a request of an agency for ADR proceedings,

the contractor shall inform the agency in writing of the contractor’s specific reasons for rejecting the

request.

(c) ADR procedures may be used at any time that the contracting officer has authority to resolve the

issue in controversy. If a claim has been submitted, ADR procedures may be applied to all or a

portion of the claim. When ADR procedures are used subsequent to the issuance of a contracting

officer’s final decision, their use does not alter any of the time limitations or procedural

requirements for filing an appeal of the contracting officer’s final decision and does not constitute a

reconsideration of the final decision.

(d) When appropriate, a neutral person may be used to facilitate resolution of the issue in

controversy using the procedures chosen by the parties.

(e) The confidentiality of ADR proceedings shall be protected consistent with 5 U.S.C.574.

(f)

(1) A solicitation shall not require arbitration as a condition of award, unless arbitration is otherwise

required by law. Contracting officers should have flexibility to select the appropriate ADR procedure

to resolve the issues in controversy as they arise.

(2) An agreement to use arbitration shall be in writing and shall specify a maximum award that may

be issued by the arbitrator, as well as any other conditions limiting the range of possible outcomes.

(g) Binding arbitration, as an ADR procedure, may be agreed to only as specified in agency

guidelines. Such guidelines shall provide advice on the appropriate use of binding arbitration and

when an agency has authority to settle an issue in controversy through binding arbitration.

33.215 Contract clauses.

(a) Insert the clause at 52.233-1, Disputes, in solicitations and contracts, unless the conditions in
33.203(b) apply. If it is determined under agency procedures that continued performance is

necessary pending resolution of any claim arising under or relating to the contract, the contracting

officer shall use the clause with its AlternateI.

(b) Insert the clause at 52.233-4 in all solicitations and contracts.