Policy
FAR 33.204 prioritizes resolving contract disputes at the contracting officer level and encourages the use of ADR to avoid formal claims whenever possible.
Overview
FAR 33.204 establishes the government’s policy for resolving contractual disputes, emphasizing that issues should be settled by mutual agreement at the contracting officer level whenever possible. The regulation encourages agencies and contractors to make reasonable efforts to resolve controversies before escalating them to formal claims. It also promotes the use of Alternative Dispute Resolution (ADR) procedures to the fullest extent practicable, except in situations where ADR may be inappropriate as outlined in 5 U.S.C. 572(b). Agencies have the authority to use ADR under both their own powers and the Administrative Dispute Resolution Act (ADRA), and may choose which authority to proceed under, except for arbitration, which must follow the ADRA.