Contract Disputes Act (CDA)

The Contract Disputes Act (CDA) of 1978 is the federal statute that governs how disputes over federal contract performance, cost, and rights are resolved, establishing a mandatory process that begins with a formal claim to the contracting officer and, if unresolved, proceeds to appeal at a Board of Contract Appeals or the Court of Federal Claims.

What is the Contract Disputes Act?

The Contract Disputes Act (41 U.S.C. §§ 7101-7109) provides the mandatory procedural framework for resolving post-award disputes between the federal government and its contractors. The CDA covers disputes arising under or relating to government contracts, including disagreements over the government's right to terminate, the amount owed under a change order, the proper interpretation of contract requirements, or whether a contractor's costs are allowable.

Under the CDA process, a contractor seeking relief must first submit a written claim to the contracting officer. For claims exceeding $100,000, the claim must be certified by a senior company official affirming that the claimed amount is made in good faith and is accurate. The contracting officer must issue a written final decision within 60 days for claims of $100,000 or less and within a reasonable time, typically 60 days, for larger claims, after which the officer must provide a specific decision date.

If the contractor disagrees with the contracting officer's final decision, it may appeal within 90 days to the cognizant Board of Contract Appeals (Armed Services Board, Civilian Board, or other applicable board), or within 12 months to the Court of Federal Claims. The contractor may also "deem denied" a failure by the contracting officer to issue a timely decision and appeal immediately. Interest accrues on contractor claims from the date of submission at the rate established by the Secretary of the Treasury.

Why the Contract Disputes Act matters for government contractors

The CDA is the exclusive vehicle for resolving most government contract disputes. Contractors who fail to follow CDA procedures, by not submitting a formal claim, not certifying large claims, or missing appeal deadlines, lose their right to recover even when the underlying dispute is meritorious. Maintaining rigorous claim documentation throughout contract performance is essential.

Example

A technology contractor completes a software development contract for the Air Force and submits final invoices. The contracting officer withholds $1.8 million, asserting that certain deliverables failed to meet acceptance criteria. The contractor disagrees, submits a certified CDA claim for $1.8 million within six years of the dispute accruing, and receives a contracting officer final decision denying the claim within 60 days. The contractor appeals to the Armed Services Board of Contract Appeals within 90 days. The Board holds a hearing and awards the contractor $1.4 million plus interest from the date of claim submission.

Frequently Asked Questions

What is the statute of limitations for a CDA claim?

A contractor must submit a CDA claim within six years of the date the claim accrued. Missing this deadline permanently bars the claim regardless of its merits.

Does the CDA apply to subcontractors?

The CDA governs disputes between the government and prime contractors only. Subcontractor disputes with the prime contractor are governed by the subcontract terms and applicable state commercial law, not the CDA.

What is the certification requirement for large claims?

Claims exceeding $100,000 must be certified by a senior company official, typically an officer, director, or other responsible person, stating that the claim is made in good faith, the supporting data is accurate and complete, the amount requested accurately reflects the contract adjustment sought, and the certifier is authorized to certify the claim. Defective certification is curable but may delay processing.

Can the government also submit a CDA claim against a contractor?

Yes. The CDA applies symmetrically to government claims against contractors, such as claims for liquidated damages, overpayments, or costs associated with a termination for default. Government claims also require a contracting officer final decision.