Sooner or later, most contractors encounter a situation where the government’s actions cost them money the contract did not anticipate: a change order whose price was never settled, a delay caused by late government-furnished information, a specification read more strictly than the words support. Federal contracts provide two formal paths to recover: the request for equitable adjustment and the claim. They are related but not the same. This is general information, not legal advice; the stakes usually justify talking with a lawyer who handles government contracts.
Where the right to recover comes from
Several standard clauses promise an equitable adjustment when the government does something that increases the contractor’s cost or time. The changes clause is the most familiar, but others cover differing site conditions in construction, suspension of work, government-caused delays, government-furnished property that arrives late or defective, and stop-work orders. An equitable adjustment is meant to put the contractor in the position it would have been in had the event not occurred: the reasonable added costs, plus a reasonable profit on them where the clause allows, plus schedule relief.
The request for equitable adjustment
An REA is a proposal to the contracting officer to adjust the contract’s price or schedule under one of these clauses. It is a negotiation document. It describes what happened, cites the clause that entitles the contractor to relief, explains why the government is responsible, and presents the costs and schedule impact with supporting detail. Many REAs are resolved by a bilateral modification without further formality, which is why contractors often prefer this cooperative first step. The costs of preparing an REA are generally treated as contract administration costs, which can be allowable, while the costs of pursuing a claim are not.
The claim
A claim is a formal, written demand seeking, as a matter of right, the payment of money in a sum certain, an adjustment of contract terms or other relief. It is governed by the Contract Disputes Act and the disputes clause. Claims above a dollar threshold set by statute must be certified by the contractor, with specific language attesting that the claim is made in good faith, that the supporting data are accurate and complete to the best of the contractor’s knowledge, and that the amount requested accurately reflects the adjustment believed due. A claim starts a clock: the contracting officer must issue a final decision within a defined period or notify the contractor when a decision will be issued. Interest on the amount eventually found due generally runs from the date the claim was received.
An REA can become a claim. If negotiations stall, the contractor can convert the REA into a claim by requesting a final decision and, where required, certifying it.
After the final decision
If the contracting officer denies the claim, or fails to decide it within the required time, the contractor may appeal to the agency’s board of contract appeals within ninety days or file suit in the United States Court of Federal Claims within one year. The choice between forums involves considerations a lawyer should weigh. Throughout the dispute, the contractor is generally required to continue performing the contract as directed.
What makes either path succeed
- Prompt written notice to the contracting officer when the event occurs; many clauses set deadlines, and silence weakens any later request
- Contemporaneous records: correspondence, daily logs, timesheets, photographs, schedule updates
- Cost tracking that segregates the added work from the base effort, ideally in a separate charge code from the first day
- A clear causal link between the government’s action and the cost claimed
- Professional, factual tone; the contracting officer is a decision-maker, not an adversary
Most adjustments are resolved by agreement. The formal path exists for the cases that cannot be settled, and keeping your records as if you might need it is what keeps a legitimate recovery from slipping away.