ABSTRACT
One event that no right-thinking program manager (PM) wishes to confront is the issuance of a claim. This chapter will deal with potential contract defaults, disagreements, and disputes. These issues can result in the issuance of a formal claim against the contracting agency. But more importantly, the chapter will emphasize how to avoid getting into a claim situation. In the ideal world, contracts are clear, specifications are crisp, customers provide government-furnished equipment (GFE) on time, document approvals are per the required response time, comments to your documents are within the bounds of your contractual requirements (not “preferences”), and your engineers are not getting and following informal direction from your customer’s engineers. If all that were always the case, there would be far less need for the program management trade. But in the real world, all of those problems can arise, and you must be vigilant to avoid program problems when they do occur. Your program in many cases is governed by a contract that places responsibilities on you, of course, but on your customer as well. Failure to live up to the contract on either side has ramifications. If you fail to perform, harmful things could happen to you. There may be penalty clauses that reduce the contract price if you are late delivering. Or, for various nonperformances or lack of sufficient progress, perhaps your progress payments can be suspended. In a worst-case scenario, your contract could be terminated for cause. All of these potential catastrophes, however, should be in your control, and it is your obligation to avoid them. On the other hand, your customer also can do, or fail to do, things that might hurt your performance under the contract. If your customer fails to live up to the obligations on its side of the contract, it is your duty to first notice and identify the breech and then
to take the necessary action to remedy the problem. That action is largely to call the issue to your customer’s attention, and ideally resolve the problem-or at a minimum take your own steps to mitigate the impact on the program. But if you cannot make the problem go away, with or without your customer’s help, you may have to issue an RFEA (request for equitable adjustment) or even a formal claim. Here are some events/issues that might, if not properly addressed, lead to an RFEA or a claim:
• Your customer is required in the contract to deliver some hardware or material to you (GFE or CFE [customer-furnished equipment]) and fails to meet the date.
