Contract Claims and REAs for Software Companies: The Contract Disputes Act, Explained
By Philip Luca — Founder of GovExpress; prior domain experience at Bloomberg Government and GovWin IQ.
Most disagreements on a federal software contract get settled in an email or a modification. An agency asks for an integration the contract doesn’t cover, you price it, the contracting officer signs a bilateral modification, and the work goes on. The formal process exists for the times that doesn’t happen: the agency says the extra work was in scope, rejects an invoice, or disputes the cost of a change it ordered.
That process is the Contract Disputes Act (CDA), 41 U.S.C. chapter 71, implemented in FAR Subpart 33.2 and the Disputes clause at FAR 52.233-1. This guide covers what counts as a claim, how a request for equitable adjustment differs from one, the certification and timing rules, the contracting officer’s final decision, and where you can appeal.
A claim has a specific meaning
FAR 2.101 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.
Each part of that definition matters:
| Element | What it means in practice |
|---|---|
| Written | A phone call or a meeting is not a claim. |
| As a matter of right | You are asserting entitlement, not asking for a favor or opening a negotiation. |
| Sum certain | A specific dollar amount. “At least $80,000” or “to be determined” is not a sum certain. |
| Submitted to the contracting officer | Sending it to the program office or the agency user does not start the clock. |
| Asks for a decision | The submission should request a contracting officer’s final decision, expressly or in substance. |
A routine invoice is not a claim. FAR 2.101 says a voucher, invoice or other routine request for payment that is not in dispute when submitted is not a claim. If the agency later disputes it or fails to act on it in a reasonable time, you can convert it into a claim by a written submission that meets the definition. Late payment of an undisputed invoice is handled under the Prompt Payment Act instead; see federal invoicing and prompt payment.
The government can have claims against you too, such as a demand to recover an overpayment. Those also go through a contracting officer’s final decision, and you can appeal them the same way.
Requests for equitable adjustment come first
Most contractors start with a request for equitable adjustment (REA). An REA asks the contracting officer to adjust price, schedule or terms because of a change, a government delay or another event the contract allocates to the government. It is a negotiation document. If the parties agree, the result is a bilateral modification.
An REA is not a claim unless it meets the claim definition, and the difference has consequences:
- No final decision is required on an REA, so it can sit without a response.
- Interest does not run on an REA. CDA interest starts when the contracting officer receives a claim.
- The costs differ. Costs of preparing and negotiating an REA may be allowable as contract administration costs, while costs of prosecuting a claim against the government are unallowable under FAR 31.205-47(f)(1).
On Department of War (DoW) contracts, DFARS 252.243-7002 requires an REA that exceeds the simplified acquisition threshold to carry a certification that it is made in good faith and that the supporting data are accurate and complete.
A common sequence is: notify the contracting officer in writing when the change happens, as the Changes clause requires (see contract modifications); submit an REA with the cost data; and convert it into a certified claim if negotiation stalls.
Certification, timing and interest
Certification. Under FAR 33.207, a claim over $100,000 must be certified by a person authorized to bind the contractor. The certification states that the claim is made in good faith, that the supporting data are accurate and complete to the best of the certifier’s knowledge and belief, that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable, and that the certifier is authorized to certify the claim. Use the FAR 33.207(c) wording. A defective certification can be corrected before a final decision or judgment, but a claim over $100,000 with no certification at all is not a valid claim.
Six years. FAR 33.206 generally requires a claim to be submitted within six years after it accrues.
Interest. Under FAR 33.208, the government pays interest on the amount found due from the date the contracting officer receives the claim until payment, at the rate set by the Treasury.
The decision clock. FAR 33.211(c) sets the contracting officer’s deadline:
| Claim amount | Contracting officer must, within 60 days of receipt |
|---|---|
| $100,000 or less | Issue a decision, if the contractor asks for one |
| Over $100,000 | Issue a decision, or tell the contractor when a decision will be issued |
If the contracting officer misses the deadline, FAR 33.211(g) treats the failure as a decision denying the claim, which lets you appeal.
The contracting officer’s final decision
A final decision is in writing, states the reasons, and tells you about your appeal rights. It is final and conclusive unless you appeal within the time limits, so read the deadline on the day it arrives.
You have two forums, and you choose one:
| Forum | Who it hears | Deadline to file |
|---|---|---|
| Board of contract appeals | The Armed Services Board of Contract Appeals (ASBCA) for DoW contracts; the Civilian Board of Contract Appeals (CBCA) for most civilian agencies | 90 days from receipt of the final decision |
| US Court of Federal Claims | Any agency | 12 months from receipt of the final decision |
Once you file in one forum, you generally cannot move the same claim to the other. Boards offer streamlined options for smaller disputes: under 41 U.S.C. 7106, an expedited procedure for claims of $50,000 or less ($150,000 or less for a small business) and an accelerated procedure for claims of $100,000 or less.
Both the agency and the boards also offer alternative dispute resolution, which FAR 33.214 encourages. Mediation in front of a board judge often resolves a dispute faster and at lower cost than a hearing.
Keep performing
The Disputes clause, FAR 52.233-1(i), requires you to proceed diligently with performance pending final resolution of any request for relief, claim, appeal or action arising under the contract, and to comply with the contracting officer’s decision. For a software company, that means you keep the service running, the licenses active and the support desk staffed while the dispute is open. Turning off access to force a settlement can lead to a termination for default.
Where the CDA applies, and where it doesn’t
| Situation | Disputes process |
|---|---|
| FAR-based contracts and orders, including GSA Schedule orders and task orders under an IDIQ | CDA and the Disputes clause |
| FAR Part 12 commercial contracts | CDA, through FAR 52.212-4(d) |
| Termination settlements | A settlement the parties can’t agree on goes through a contracting officer’s decision and the CDA |
| Other transaction agreements | Not covered by the CDA; the agreement’s own dispute terms apply |
| Award decisions, before or at contract award | Not a CDA matter; see bid protests |
| Your commercial license or EULA | Its state-law, venue and arbitration terms generally don’t bind the government; see software license terms |
A claim is your assertion
A claim states what you believe you are entitled to. A contracting officer’s final decision, a board decision or a court judgment is the government’s answer. Until one of those exists, the amount is a company assertion, not a settled figure, and it should be described that way in your own reporting and to investors.
The same distinction runs through the rest of federal work: what a company states about itself is not the same as what has been checked. See verified vs. self-attested: what federal buyers actually check.
What this means for a software company
- Write it down when scope moves. A dated email to the contracting officer naming the request, the requester and why it is outside the contract is the foundation of any later REA or claim.
- Keep cost records by change. Hours, licenses and hosting tied to each disputed item make an equitable adjustment easier to prove.
- Start with an REA and negotiate in good faith; most disputes end in a bilateral modification.
- Convert to a claim when talks stall. Name a sum certain, ask for a final decision, and certify anything over $100,000 with the FAR 33.207(c) wording.
- Diary the deadlines: 60 days for the contracting officer, 90 days to a board, 12 months to the Court of Federal Claims, six years from accrual.
- Keep the service on while the dispute is open.
- Read the current rule text. The FAR is being rewritten under the Revolutionary FAR Overhaul. Confirm the clauses in your contract and the current FAR and DFARS text, and involve government contracts counsel before you file a claim.
Where this fits
Disputes usually start with a change: see contract modifications for the Changes clause and the notice it requires. They also come up when a contract ends early, when an invoice is rejected, and on time-and-materials and cost-type work, where hours and costs are audited.
Score your company’s federal readiness to see how your contracts and compliance profile look next to the other categories federal buyers review.
Related reading
- Contract Modifications for Software Companies: Bilateral, Unilateral and the Changes Clause
- Termination for Convenience and for Cause: How Federal Software Contracts End Early
- Federal Invoicing for Software Companies: Prompt Payment, IPP, WAWF and Annual Billing
- Bid Protests for Software Companies: Agency, GAO and the Court of Federal Claims
- Glossary: GSA Schedule · IDIQ · OTA
Frequently Asked Questions
What is the difference between a request for equitable adjustment and a claim?
A request for equitable adjustment (REA) is a request to negotiate a change to price, schedule or terms. A claim is a written demand, as a matter of right, for a sum certain or other relief, submitted to the contracting officer for a decision. Only a claim starts the Contract Disputes Act process: it requires a contracting officer's final decision, earns interest from the date the contracting officer receives it, and can be appealed to a board of contract appeals or the Court of Federal Claims.
Can I stop work while a dispute with the agency is open?
Generally no. The Disputes clause, FAR 52.233-1, requires the contractor to proceed diligently with performance pending final resolution of any request for relief, claim, appeal or action arising under the contract, and to comply with the contracting officer's decision. Stopping work over a dispute can expose you to a default termination.
Does the Contract Disputes Act apply to GSA Schedule orders, commercial contracts and OTAs?
It applies to procurement contracts, including FAR Part 12 commercial contracts, where FAR 52.212-4(d) makes the contract subject to 41 U.S.C. chapter 71, and to GSA Schedule contracts and orders. It does not apply to other transaction agreements, which are not procurement contracts; disputes under an OTA follow whatever the agreement itself says.
The CMMC brief
What the Phase 2 suspension changed and what it did not — the obligations that still bind, the assessment path a contract puts you on, the scoping decision that drives the cost, and the sequence that fits inside a pipeline. Sourced from the primary record.