FAR 8.406-6—Disputes.
Plain-English Summary
FAR 8.406-6 explains how disputes are handled when a contractor performs an order under a Federal Supply Schedule (GSA Schedule) contract. It covers four main topics: disputes about performance of an individual order, disputes about the terms and conditions of the underlying schedule contract, contractor appeal rights after a final decision, and the use of alternative dispute resolution (ADR). The section draws a line between issues the ordering activity contracting officer may decide and issues that must be referred to the schedule contracting officer, which is critical because schedule contracts involve two contracting officers with different authorities. In practice, this rule helps prevent the wrong contracting officer from issuing a decision outside their authority, which could create procedural defects or delay resolution. It also tells contractors where to direct disputes and what appeal forums are available if they receive a final decision. Finally, it encourages ADR to resolve disputes efficiently and avoid formal litigation when possible.
Key Rules
Performance disputes may be decided
For disputes arising from performance of an order, the ordering activity contracting officer may issue a final decision under the schedule contract’s Disputes clause. Alternatively, that contracting officer may refer the dispute to the schedule contracting officer.
Terms-and-conditions disputes must be referred
If the dispute relates to the terms and conditions of the schedule contract itself, the ordering activity contracting officer must refer it to the schedule contracting officer for resolution. The ordering activity contracting officer must also notify the schedule contractor of the referral.
Prompt notice of final decisions
When the ordering activity contracting officer issues a final decision on a performance dispute, that officer must promptly notify the schedule contracting officer. This ensures the schedule contracting officer is aware of decisions affecting the underlying schedule contract relationship.
Appeals go to specified forums
A contractor may appeal a final decision to either the Board of Contract Appeals servicing the agency that issued the decision or the U.S. Court of Federal Claims. The appeal forum depends on the agency that issued the final decision, not on the schedule contract alone.
ADR should be used when practical
The contracting officer should use alternative dispute resolution procedures to the maximum extent practicable. FAR 33.204 and 33.214 provide the general policy and procedures for using ADR to resolve disputes efficiently.
Responsibilities
Ordering Activity Contracting Officer
May issue final decisions on disputes arising from performance of an order, or may refer those disputes to the schedule contracting officer. Must promptly notify the schedule contracting officer of any final decision. Must refer all disputes involving the schedule contract’s terms and conditions to the schedule contracting officer and notify the contractor of that referral. Should use ADR to the maximum extent practicable.
Schedule Contracting Officer
Resolves disputes that relate to the terms and conditions of the schedule contract under the contract’s Disputes clause. May also receive referred performance disputes from the ordering activity contracting officer for resolution.
Schedule Contractor
Must follow the dispute process applicable to the issue, including responding to decisions or referrals. May appeal a final decision to the appropriate Board of Contract Appeals or the U.S. Court of Federal Claims.
Agency / Ordering Activity
Must ensure its contracting officers understand the boundary between order-performance disputes and schedule-contract disputes, and support use of ADR where appropriate.
Practical Implications
The biggest practical issue is jurisdiction: performance disputes and schedule-contract disputes are handled by different contracting officers, and sending the matter to the wrong one can delay resolution or create an invalid decision risk.
Contractors should identify whether their complaint concerns how an order was performed or whether it challenges the underlying schedule contract terms, because that determines who must act and where the dispute should go.
Ordering activity contracting officers should document and promptly communicate any final decision to the schedule contracting officer to avoid confusion and preserve the administrative record.
ADR is not optional in spirit; the rule pushes contracting officers to use it whenever feasible, so parties should be prepared to discuss settlement, mediation, or other informal resolution methods early.
Appeal rights remain available after a final decision, but contractors should pay close attention to which agency issued the decision because that affects the proper Board of Contract Appeals forum.
Official Regulatory Text
(a) Disputes pertaining to the performance of orders under a schedule contract. (1) Under the Disputes clause of the schedule contract, the ordering activity contracting officer may- (i) Issue final decisions on disputes arising from performance of the order (but see paragraph (b) of this section); or (ii) Refer the dispute to the schedule contracting officer. (2) The ordering activity contracting officer shall notify the schedule contracting officer promptly of any final decision. (b) Disputes pertaining to the terms and conditions of schedule contracts . The ordering activity contracting officer shall refer all disputes that relate to the contract terms and conditions to the schedule contracting officer for resolution under the Disputes clause of the contract and notify the schedule contractor of the referral. (c) Appeals . Contractors may appeal final decisions to either the Board of Contract Appeals servicing the agency that issued the final decision or the U.S. Court of Federal Claims. (d) Alternative dispute resolution . The contracting officer should use the alternative dispute resolution (ADR) procedures, to the maximum extent practicable (see 33.204 and 33.214 ).