52.233-1 Disputes
Source: FAR 52.233-1 on acquisition.gov
FAR 52.233-1 requires contractors to follow strict procedures for submitting and certifying claims, continue performance during disputes, and provides structured timelines for resolution and interest payments.
Overview
FAR 52.233-1, Disputes, establishes the procedures and requirements for resolving disputes arising under or relating to a government contract. It implements the Contract Disputes Act (41 U.S.C. chapter 71) and defines what constitutes a claim, the process for submitting claims, certification requirements for claims over $100,000, and the timelines for contracting officer decisions. The clause also addresses the use of alternative dispute resolution (ADR), the accrual and payment of interest on claims, and the contractor’s obligation to continue contract performance during dispute resolution. Alternate I modifies the requirement for continued performance to include disputes "relating to" the contract, broadening the scope of the obligation.
Key Rules
- Definition of Claim
- A claim is a written demand for payment, contract adjustment, or other relief; claims over $100,000 require certification.
- Submission and Certification
- Claims must be submitted in writing within 6 years of accrual; claims over $100,000 must be certified with specific language.
- Contracting Officer Decision Timelines
- CO must decide claims under $100,000 within 60 days if requested; for larger claims, CO must decide or provide a decision date within 60 days.
- Appeals and Finality
- CO’s decision is final unless appealed or litigated.
- Alternative Dispute Resolution (ADR)
- ADR may be used by mutual consent; contractor must provide written reasons if refusing ADR.
- Interest on Claims
- Interest accrues from claim receipt until payment, including for defective certifications.
- Continued Performance
- Contractor must continue performance during dispute resolution and comply with CO decisions.
Responsibilities
- Contracting Officers: Must render timely decisions, notify contractors of decision timelines, pay interest on valid claims, and offer ADR when appropriate.
- Contractors: Must submit claims in writing, certify claims over $100,000, respond to ADR offers, and continue contract performance during disputes.
- Agencies: Oversee compliance with dispute procedures and ensure proper handling of claims and interest payments.
Practical Implications
- This clause ensures a structured process for resolving contract disputes, protecting both parties’ rights and obligations. Contractors must be diligent in documenting claims, meeting certification requirements, and maintaining performance during disputes. Failure to follow procedures or deadlines can jeopardize claims or delay resolution. ADR offers a potential path for faster, less adversarial resolution.
As prescribed in 33.215 , insert the following clause:
Disputes (May 2014)
(a) This contract is subject to 41 U.S.C chapter 71, Contract Disputes.
(b) Except as provided in 41 U.S.C chapter 71, all disputes arising under or relating to this contract shall be resolved under this clause.
(c) "Claim," as used in this clause, means 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 this contract. However, a written demand or written assertion by the Contractor seeking the payment of money exceeding $100,000 is not a claim under 41 U.S.C chapter 71 until certified. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under 41 U.S.C chapter 71. The submission may be converted to a claim under 41 U.S.C chapter 71, by complying with the submission and certification requirements of this clause, if it is disputed either as to liability or amount or is not acted upon in a reasonable time.
(d)
(1) A claim by the Contractor shall be made in writing and, unless otherwise stated in this contract, submitted within 6 years after accrual of the claim to the Contracting Officer for a written decision. A claim by the Government against the Contractor shall be subject to a written decision by the Contracting Officer.
(2)
(i) The Contractor shall provide the certification specified in paragraph (d)(2)(iii) of this clause when submitting any claim exceeding $100,000.
(ii) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim.
(iii) 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 authorized to certify the claim on behalf of the Contractor."
(3) The certification may be executed by any person authorized to bind the Contractor with respect to the claim.
(e) For Contractor claims of $100,000 or less, the Contracting Officer must, if requested in writing by the Contractor, render a decision within 60 days of the request. For Contractor-certified claims over $100,000, the Contracting Officer must, within 60 days, decide the claim or notify the Contractor of the date by which the decision will be made.
(f) The Contracting Officer’s decision shall be final unless the Contractor appeals or files a suit as provided in 41 U.S.C chapter 71.
(g) If the claim by the Contractor is submitted to the Contracting Officer or a claim by the Government is presented to the Contractor, the parties, by mutual consent, may agree to use alternative dispute resolution (ADR). If the Contractor refuses an offer for ADR, the Contractor shall inform the Contracting Officer, in writing, of the Contractor’s specific reasons for rejecting the offer.
(h) The Government shall pay interest on the amount found due and unpaid from (1) the date that the Contracting Officer receives the claim (certified, if required); or (2) the date that payment otherwise would be due, if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in FAR 33.201, interest shall be paid from the date that the Contracting Officer initially receives the claim. Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the Act, 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.
(i) The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the Contracting Officer.
(End of clause)
Alternate I (Dec 1991). As prescribed in 33.215 , substitute the following paragraph (i) for paragraph (i) of the basic clause:
(i) The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the contract, and comply with any decision of the Contracting Officer.