Aron C. Beezley and Owen E. Salyers | GovCon Source
Federal contractors frequently encounter circumstances that increase costs, delay performance, or otherwise impact contract obligations. Changes in government requirements, differing site conditions, defective specifications, government-caused delays, and other unforeseen events can create significant financial and operational consequences. When these issues arise, contractors generally have two primary mechanisms for seeking relief: a Request for Equitable Adjustment (REA) or a claim under the Contract Disputes Act (CDA).
Although REAs and claims often arise from the same underlying facts, they serve different purposes and carry different procedural and strategic implications. Understanding the distinction between the two can significantly affect a contractor’s ability to recover costs, preserve business relationships, and protect legal rights.
What Is a Request for Equitable Adjustment?
An REA is a contractual mechanism used to seek compensation, schedule relief, or other contract modifications resulting from government actions or circumstances that entitle the contractor to an adjustment under the contract. REAs are commonly submitted when a contractor believes the government has changed the scope of work, caused delays, provided defective specifications, or otherwise increased the contractor’s costs of performance. The objective of an REA is typically to negotiate a mutually agreeable resolution without initiating a formal dispute process.
Although REAs are often less adversarial than claims, they should not be viewed as informal requests. Successful REAs usually require detailed factual support, legal analysis, cost documentation, and a clear demonstration of entitlement under the applicable contract clauses.
What Is a CDA Claim?
A claim is a formal written demand seeking payment, contract interpretation, or other relief under the CDA. For claims exceeding $100,000, the contractor must provide a CDA certification stating that the claim is made in good faith, that the supporting data is accurate and complete to the best of the contractor’s knowledge, and that the amount requested accurately reflects the adjustment for which the government is liable. Once a contracting officer issues a final decision — or fails to issue one within the required timeframe — the contractor may appeal to an agency board of contract appeals or file suit in the United States Court of Federal Claims.
Key Differences Between REAs and Claims
While REAs and claims often seek similar monetary or schedule relief, several important distinctions exist.
- An REA is generally intended to facilitate negotiation and preserve a collaborative relationship with the government. In contrast, a claim initiates a formal dispute process that can ultimately lead to litigation.
- REAs do not require a contracting officer’s final decision, whereas claims do. Claims also trigger statutory deadlines and appeal rights that do not apply to REAs.
- Another significant difference involves interest. Under the CDA, contractors may recover interest on successful claims beginning on the date the government receives the claim. REAs generally do not provide the same statutory interest benefits.
- In addition, contractors may recover certain proposal preparation costs associated with preparing an REA, whereas claim preparation costs are generally not recoverable.
Advantages of Submitting an REA
An REA can provide several strategic benefits. First, REAs often promote constructive dialogue with the contracting officer and program personnel. Because an REA is typically viewed as a request for contract administration rather than a formal dispute, government personnel may be more willing to engage in collaborative discussions.
Second, REAs can preserve valuable business relationships. Many contractors prefer to resolve issues through negotiation rather than immediately escalating matters into a formal dispute.
Third, contractors may be able to recover allowable REA preparation costs under certain circumstances, which can reduce the financial burden associated with pursuing relief.
Finally, an REA may lead to a faster and less expensive resolution than formal litigation.
Disadvantages of an REA
Despite these advantages, REAs can also carry risks. The most significant risk is that an REA does not trigger the formal dispute-resolution framework established by the CDA. As a result, the government may delay action, engage in prolonged negotiations, or simply reject the request without creating a clear path to appeal.
Additionally, contractors pursuing an REA do not receive CDA interest, which can become substantial in large-dollar disputes that remain unresolved for extended periods. Contractors must also remain mindful of the CDA’s six-year statute of limitations. Extended REA negotiations can consume valuable time and potentially jeopardize future claim rights if not carefully managed.
Advantages of Filing a Claim
A CDA claim provides several important legal protections. Most importantly, a claim establishes a formal process requiring a contracting officer’s final decision. If the government fails to act, the contractor may pursue a deemed denial and proceed to appeal.
Claims also preserve the contractor’s right to seek review before an agency board of contract appeals or the Court of Federal Claims. Another significant advantage is the availability of CDA interest, which accrues from the date the government receives the claim until payment is made.
In cases involving substantial damages or entrenched government positions, filing a claim may be the most effective method for obtaining relief.
Disadvantages of Filing a Claim
Claims can also have drawbacks. The claim process is generally more adversarial than the REA process and may strain the contractor’s relationship with the customer agency.
Claims often require significant legal, factual, and expert support. If litigation follows, the process can become time-consuming. Additionally, once a dispute becomes formalized, opportunities for informal resolution may become more limited, although settlement remains possible throughout the process.
Should Contractors Submit an REA or a Claim?
The answer depends on the specific facts and circumstances. In some situations, an REA may be the preferred initial approach because it encourages negotiation and allows the parties to resolve issues without litigation. In other situations, particularly where the government has already rejected the contractor’s position, significant money is at stake, or delay is causing substantial prejudice, a CDA claim may be the more appropriate vehicle.
Importantly, the decision is not always an either/or proposition. Many successful contractors begin with a well-supported REA and later convert the matter into a CDA claim if negotiations fail. The key is to understand the legal and strategic implications of each option before choosing a path forward.
Why Early Involvement of Experienced Government Contracts Counsel Matters
One of the most common mistakes contractors make is waiting too long to seek legal guidance. Many entitlement issues are won or lost long before an REA or claim is submitted. Critical evidence must be identified and preserved. Contract clauses must be analyzed. Notice requirements must be satisfied. Cost impacts must be properly documented. Communications with the government must be carefully managed.
Experienced government contracts counsel can help contractors evaluate entitlement, quantify damages, develop persuasive legal theories, preserve claim rights, and avoid procedural pitfalls that may undermine recovery. Establishing these items early, especially when drafting an REA, can help provide the basis for a more productive conversation with government personnel and set a clear record should the dispute move onto a claim.
Early legal involvement can also help determine whether an REA, a CDA claim, or a phased strategy involving both is likely to produce the best outcome. Counsel can work with project personnel, consultants, and accounting teams to build a comprehensive record that positions the contractor for successful negotiations or litigation if necessary.
Perhaps most importantly, experienced counsel can help contractors avoid inadvertently waiving rights, missing deadlines, or making admissions that later complicate recovery efforts.
Conclusion
REAs and CDA claims are powerful tools available to government contractors seeking compensation or schedule relief. While both mechanisms can provide meaningful remedies, each serves a different purpose and carries distinct legal and strategic consequences.
Contractors should carefully evaluate the advantages and disadvantages of each approach before proceeding. By engaging experienced government contracts counsel early, contractors can protect their rights, maximize recovery opportunities, and develop a strategy that aligns with both their legal objectives and business goals.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net.
Republished with permission. The article, “REAs vs. Claims: A Government Contractor’s Guide to Choosing the Best Path” was originally published on GovCon Source by Bradley Arant Boult Cummings LLP. Copyright 2026.