Subcontractor’s Claims on Federal Contracts

Direct subcontractor claims are not authorized by the Contract Disputes Act (CDA) because there is no “privity” of contract between the government and the subcontractor. Specifically, there is no direct relationship between the parties. [See United States v. Johnson Controls Inc., 713F.2d 1541 (Fed. Cir. 1983).]  A subcontractor can make a claim against the government only if it is authorized or “sponsored” by the prime contractor. (See Batteast Construction Co., ASBCA No. 30452, 89-3 BCA : 21,933.) A prime contractor can sponsor a subcontractor’s appeal only if the prime contractor may be liable to the subcontractor for the amounts claimed. If the subcontractor releases the prime contractor from liability, the prime contractor cannot pursue an appeal of behalf of the subcontractor. [Severin v. United States, 99 Ct. Cl. 435, 442-43 (1943).