In most contract disputes in Texas, a common avenue of resolution is for the aggrieved party to file a lawsuit, but this is avenue is generally unavailable initially when the dispute involves a federal government contract. Claims by government contractors regarding federal contracts must be submitted to a government Contracting Officer. If the company is dissatisfied with the Contracting Officer's decision, there is a right to appeal the case to the Civilian Board of Contract Appeals or file suit in the U.S. Court of Federal Claims. The CBCA encourages the use of alternate dispute resolution methods to resolve claims.
For corporations doing business with most U.S. agencies, ADR must follow a specific procedure, according to the CBCA. The board was established in 2007 by Congress pursuant to the Contract Disputes Act of 1978. Both parties to the dispute must agree in writing to seek the CBCA's ADR services. The CBCA chairman will then appoint one or more judges to act as a neutral mediator to help resolve the contract dispute. The parties to the contract dispute must then sign an agreement that establishes the guidelines for mediation.
The CBCA took over the functions of eight appeal boards that previously existed, including those for the Departments of Agriculture, Energy, Housing and Urban Development, Interior, Labor, Transportation, Veterans Affairs and the General Services Administration. All rulings of those boards are considered binding precedent for the CBCA.
ADR methods can successfully resolve many disputes involving federal contracts, but sometimes ADR is unsuccessful and the parties to the dispute will need to consider other options. The next blog post will discuss some of these choices that business owners have if they need to pursue a satisfactory or final resolution.
Source: CBCA.GSA.gov, "Deciding to use Alternative Dispute Resolution," Accessed on June 11, 2015