LAW OF THE LAND: Due process rights for federal contractors

William Martin

The concept of due process is ingrained in almost all aspects of American life and extends to contractors bidding for and performing work for the Federal government.

The Federal Acquisition Regulation ("FAR") sets forth the rules for the "acquisition process," the process used by the government to purchase goods and services. One of the guiding principles of the FAR is to conduct business with integrity, fairness, and openness. If a contractor suspects a contract was awarded improperly, the contractor has the right to challenge the award.

A contract award may be challenged and set aside if a challenger proves that the contracting agency or the successful bidder did not comply with the contract solicitation requirements. In most cases, the challenger is seeking to be awarded the contract or seeking another shot at bidding on the contract. A challenger has the option to file a protest to the agency, to the General Accountability Office, or to the United States Court of Federal Claims. In addition to due process rights to challenge an award, contractors performing under a government contract have due process rights if the contracting officer takes improper action against the contractor.

For contractors performing pursuant to a government contract, the Contract Disputes Act of 1978 establishes procedures and requirements for asserting and resolving claims and applies to any express or implied contract covered by the FAR (with limited exceptions). Occasionally, disputes will arise between the Federal contracting officer and the contractor. The Act applies to contracting officer decisions on matters "arising under" or "relating to" a contract. Contractor claims must be submitted, in writing, to the contracting officer for a decision within six years after accrual of a claim.

The Government’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level. If the parties cannot resolve the controversy, the contracting officer must issue a "final decision" notifying the contractor of its right to appeal to the agency's Board of Contractor Appeals or to the Court of Federal Claims.

Prior to submitting a protest or dispute, the contractor should have an attorney research the law to make sure the basis for the action is sound and does not involve a matter previously decided in favor of the agency. In most cases, the best place to file the claim may be the Court of Federal Claims, however, it is important to develop a strategy based on a full analysis of the facts and law.

Bill Martin formerly served as a senior A=attorney in the FDIC’s Professional Liability and Financial Crimes Section. He is currently associated with Crew & Crew, P.A. where he practices corporate, banking, real estate, construction, government, and commercial law. Prior to becoming a lawyer, Bill was an Air Force officer and a B-52 and B-1B.