Federal Government Contract Arbitration Lawyers

Aggressive Litigation with AAA Arbitration for Prime and Subcontractor Disputes on Federal Contracts

Procurement Attorneys and Former Contracting Officials – ( Help for Plaintiffs or Defendants) Your Contract Has an Arbitration Clause. Here’s What Happens Once Someone Invokes It.

Somewhere in your prime contract or subcontract, maybe a clause that says “disputes will be resolved through arbitration under the American Arbitration Association’s rules, not in court.

Maybe you just received a Demand for Arbitration. Maybe a termination settlement dispute with your subcontractor stalled and their counsel mentioned AAA. Maybe you’re the one deciding whether to invoke the clause against a prime who shorted your final payment.

Whichever side you’re on, the same problem follows you into that process: AAA arbitration rules and the Federal Acquisition Regulation are two entirely different systems, and the dispute in front of you usually depends on both at once. An arbitrator applying AAA Commercial Rules doesn’t automatically know what a termination for convenience settlement proposal has to contain under FAR Part 49, what the Severin doctrine does to a pass-through claim, or why a Contract Disputes Act certification matters.

If your lawyer doesn’t know that either, you’re not getting a fair hearing — you’re getting a coin flip.

Call 1.866.601.5518 to speak directly with government contracts litigator Theodore Watson, not an intake line. Nationwide representation, claimant or respondent side.

Nationwide Representation, Claimant or Respondent

Watson & Associates, LLC represents prime contractors, subcontractors, and joint venture partners in AAA arbitration and Contract Disputes Act litigation nationwide, including matters involving:

• Termination for convenience settlement disputes
• Termination for default disputes
• Pass-through and Severin doctrine claims
• Contract Disputes Act claims and appeals
• FAR flow-down clause disputes
• Service Contract Act wage and classification disputes
• Mentor-protégé and joint venture disputes
• Teaming agreement disputes
• Equitable adjustment claims
• Bid protest-related contract disputes
• SBA and Small Business matters
• Counterclaims for lost profits and consequential damages

Why This Isn’t Ordinary Commercial Arbitration

Most commercial litigators who handle AAA cases have never read the FAR. That gap matters more than it sounds like it should, for a simple reason: federal government contracts don’t operate on ordinary contract law. They operate on a regulatory framework layered on top of it.

A termination for convenience settlement isn’t negotiated the way a commercial contract termination is — it follows FAR Subpart 49 cost principles. A subcontractor’s pass-through claim against the government, asserted by the prime, can be defeated entirely by release language in the subcontract under the Severin doctrine — a defense most commercial litigators have never encountered. A contractor’s claim against the government over $100,000 generally has to be certified in a specific way before a contracting officer’s decision on it means anything, under the Contract Disputes Act. None of this is intuitive, and none of it is optional.

When prime and subcontractor disputes get arbitrated under AAA rules instead of litigated at the Court of Federal Claims or a Board of Contract Appeals, the FAR doesn’t disappear — it’s usually still the backdrop the contract terms are built on, and it still shapes what “reasonable,” “allowable,” and “allocable” mean when the arbitrator is deciding your case. An attorney who treats this like a generic breach-of-contract arbitration will miss the arguments that actually decide these cases.

Government Contracts Litigators Who Handle These Disputes Every Day

This isn’t a side practice for us. Prime and subcontractor disputes, terminations, and FAR-based claims are what this team does day in and day out.

Wojciech Z. Kornacki, Of Counsel, focuses his practice on federal contract compliance, contract disputes, and litigation. He has litigated claims and filed appeals at both the Armed Services Board of Contract Appeals and the Civilian Board of Contract Appeals, challenged and defended contract awards at the Government Accountability Office and the U.S. Court of Appeals for the Federal Circuit, and represented contractors before the Department of Defense, NIH, TSA, and GSA.

Before entering private practice, he served as a U.S. Army Judge Advocate in Germany, Iraq, and Virginia, advising commanders on contracting and procurement matters in deployed environments — a perspective few civilian government contracts attorneys bring to a dispute. He has written and spoken publicly on bid protest trends and FAR compliance for outlets including Bloomberg Federal Contracts Report. See Full Bio.

 

Jennifer N. Higgins

Wise D. Allen, Counsel, focuses on government contractor defense matters out of the firm’s Washington, D.C. Metro practice. He has extensive experience as the lead attorney in criminal litigation representing individuals and as a United States attorney in cases and administrative hearings that range from Trade Agreements Act cases and various federal cases.  Mr. Allen has represented the United States in sovereign immunities, abstention doctrines, removal doctrines, and medical science.   

Mr. Allen has been sought out to assist as a corporate attorney representing international and national corporations undergoing extensive investigations and litigation in False Billing, Federal Tort Claims, Mergers and Acquisitions, Procurement Law, Department of Defense Laws, Spectrum Laws, Misappropriation,  NLRA, EEO, Security Laws, RICO, Privacy Act, HIPPAA, GDPRA, NIST, from the Office of United States Attorney, Office of Inspector General,  Department of Justice, Federal Trade Commission, Federal Communication Commission, and Securities Exchange Commissions.

With rounded experience in management and labor litigation that has ranged from the Headquarters of the International Brotherhood of Teamsters and as an attorney for United States, Mr. Allen has been involved in litigation and counseling regarding the Merit System Protection Board, National Labor Relations Act, Equal Employment Opportunity, and Trade Secrets. See Full Bio.

Cheryl Adams — Associate Attorney

Former Federal Contracting Officer | FAR Expert | Cradle-to-Grave Acquisition Experience

Cheryl Adams held an active federal contracting officer warrant at a federal agency headquarters, personally managing contract awards from micropurchases through major systems acquisition. She has worked side-by-side with DCAA auditors, personally conducted government property audits, and managed every phase of the federal acquisition lifecycle.

Her value in a government contract fraud defense is specific: she understands what a contracting officer looks for when reviewing contractor performance, how agencies interpret FAR requirements, and what reasonable compliance looks like from inside the procurement office. In cases where good faith and regulatory ambiguity are central defenses, her perspective is irreplaceable. Read Full Bio → 

Carolyn L. Oliver, Counsel ( Former DOJ Attorney)

Of Counsel to Watson & Associates, LLC: Carolyn L. Oliver brings over 40 years of distinguished legal experience to Watson & Associates’ Federal White Collar Defense and Investigations practice. As a former Assistant United States Attorney in the Major Frauds Section of the U.S. Attorney’s Office for the Southern District of California, Oliver provides clients with representation from a federal white collar criminal defense attorney who has prosecuted the very types of cases she now defends. Her extensive federal prosecution background, combined with her proven track record in complex criminal defense, positions her as a formidable advocate for corporations, CEOs, and individuals facing high-stakes federal investigations. Read Full Bio.

 

Speak to the team directly: 1.866.601.5518.

Where These Disputes Actually Start

Termination for Convenience Settlement Disputes

The government can terminate a contract for its own convenience at any time, for any reason, under FAR 52.249-2. That’s not usually the fight. The fight is what happens next: the contractor has to submit a termination settlement proposal, typically within one year of the termination’s effective date, and the prime contractor is separately responsible for settling every affected subcontract under FAR 49.104 and 49.108. Disagreements over allowable costs, subcontractor settlement amounts, and what counts as “reasonable profit” on the terminated portion of the work are among the most common disputes that end up in arbitration between a prime and its subcontractors.

Pass-Through Claims and the Severin Doctrine

When a subcontractor believes the government’s own conduct caused it delay or added cost, it can’t sue the government directly — it has no contract with the government to sue on. Its only path is a “pass-through” claim, where the prime contractor asserts the subcontractor’s claim on its behalf. The problem: under the Severin doctrine (Severin v. United States, 99 Ct. Cl. 435 (1943)), if the subcontract language completely releases the prime from liability to the subcontractor, the prime has no damages of its own to pass through — and the claim dies. Whether a release is “iron-bound” enough to trigger Severin, or whether liquidating language preserves the claim, is exactly the kind of fight that shows up in prime-sub AAA arbitration, and it’s a defense most non-specialist litigators don’t see coming.

Contract Disputes Act Claim Resolution

Claims against the government itself over $50,000 generally require certification under the Contract Disputes Act, and a contracting officer has 60 days to issue a decision on claims of $100,000 or less. Once a contracting officer’s final decision comes down, the clock starts: 90 days to appeal to a Board of Contract Appeals, or 12 months to file at the U.S. Court of Federal Claims — and that election, once made, generally can’t be undone. While CDA claims against the government itself proceed through the boards or the COFC rather than AAA, the same underlying claim often triggers a parallel, contractually separate arbitration between the prime and its subcontractors over how any recovery — or any loss — gets allocated between them.

Service Contract Act Wage and Classification Disputes

On federal service contracts, the McNamara-O’Hara Service Contract Act requires contractors to pay prevailing wages and fringe benefits set by Department of Labor wage determinations. Misclassifying employees into a lower-paying labor category is one of the most common triggers for a Wage and Hour Division investigation, and it doesn’t just create back-wage exposure — it frequently spills into prime-subcontractor disputes when a sub’s noncompliance exposes the prime to liability, or when a prime withholds payment pending resolution of a wage claim. These disputes are increasingly resolved through the arbitration clause in the subcontract rather than litigated separately.

Counterclaims for Lost Profits

When a prime terminates a subcontractor for default, or a dispute escalates into a breach-of-contract fight, lost profits counterclaims are common — and commonly overreached. Courts and arbitrators require lost profits to be proven with reasonable certainty, not speculation: the claimant has to show the loss was caused by the breach, was foreseeable at the time of contracting, and can be calculated from real financial data rather than optimistic projections. Many subcontracts also waive consequential damages outright, which can eliminate a lost profits claim before the numbers are even examined. On the government-claim side, a wrongful termination for default that gets converted to a termination for convenience typically limits the contractor’s recovery to costs incurred plus reasonable profit on completed work — not the full profit it expected to earn on the entire contract. Knowing which measure of damages actually applies to your specific claim, before you build your numbers, is often the difference between a credible claim and a wasted expert report.

How AAA Arbitration Differs from Litigating at the Boards or the Court of Federal Claims

	AAA Arbitration	CDA Litigation (Boards / COFC)
Applies when	The prime-sub or JV/teaming agreement contains an arbitration clause	The dispute is a claim against the government itself
Governed by	AAA Commercial Arbitration Rules (or the rules specified in the contract)	Contract Disputes Act, FAR Subpart 33.2, board-specific procedural rules
Who decides	A private arbitrator or panel selected under AAA procedures	An administrative judge (ASBCA/CBCA) or a Court of Federal Claims judge
Confidentiality	Generally private	Generally public record
Appeal rights	Extremely limited — courts vacate awards only for narrow grounds like fraud or arbitrator misconduct	Full appellate review available at the Federal Circuit
Costs	Filing fees, case management fees, and arbitrator compensation, scaled to the amount in dispute	Court/board filing is comparatively low-cost, but litigation timelines run longer

 

Because judicial review of an arbitration award is so limited, the hearing itself is usually the only real opportunity to win. There’s little room to fix a weak presentation on appeal. That makes getting the FAR-specific arguments right the first time — not after an unfavorable award — the most important part of the representation.

Frequently Asked Questions

Does an arbitration clause in my subcontract override my rights under the Contract Disputes Act?

No. The CDA governs claims against the government itself, which must go through the contracting officer and then the boards or the Court of Federal Claims. A private arbitration clause in a prime-sub agreement governs disputes between the prime and the subcontractor — it doesn’t give the subcontractor a direct claim against the government, and it doesn’t replace the CDA process for claims the prime is pursuing against the agency.

Can I use AAA arbitration for a dispute directly with the government?

Generally, no. Claims against a federal agency arising under a government contract are resolved through the Contract Disputes Act process, not private AAA arbitration, unless a specific alternative dispute resolution agreement with the agency provides otherwise.

What happens if my subcontract doesn’t have an arbitration clause at all?

Then the dispute is resolved through ordinary breach-of-contract litigation in the appropriate court, under whatever venue and choice-of-law provisions the subcontract specifies — arbitration only applies where the parties agreed to it in writing.

My subcontractor signed a broad release when I made a progress payment. Does that kill their pass-through claim?

It depends entirely on the release language. Broad, unqualified releases have defeated pass-through claims under the Severin doctrine; releases that expressly carve out delay or disruption claims, or that are ambiguous about scope, have survived. This is one of the most fact-specific, frequently litigated issues in prime-sub disputes.

How long does AAA arbitration for a government contracts dispute typically take?

It varies by case complexity and the arbitration rules the contract specifies, but arbitration is generally faster than board or Court of Federal Claims litigation, in part because discovery is typically more limited and there’s no multi-level appeal process built in.

Nationwide Federal Government Contract Arbitration Lawyers

Hiring a government contract arbitration lawyer for a federal government contract litigation  case can be difficult since it is a niche area of law.  Our federal government contracts lawyers can provide legal representation in most states including Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, and procurement arbitration Indiana, Kansas, Louisiana, Maine healthcare fraud, Maryland, Massachusetts, Michigan lawyers, Minnesota fraud attorneys, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico government contract arbitration lawyers, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, U.S. Virgin Islands, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, and Wyoming.

Our federal government contract arbitration lawyers can represent clients prime and subcontractor companies in various cities including Anchorage, AK; Atlanta, GA; Austin, TX; Birmingham Government contractor arbitration lawyers, Chicago, IL; Colorado Springs, CO; Dallas, TX; Denver, Colorado; Indianapolis, IN; Las Vegas, NV; Los Angeles government contracting arbitration lawyers, CA; Federal Miami arbitration attorney, FL; Philadelphia, PA; Houston, TX federal procurement arbitration lawyer, Huntsville, Montgomery. AL; San Antonio, TX; San Diego, CA; Mobile; Al; Montgomery AL;  Huntsville, AL; San Francisco, CA; San Jose, CA; Sacramento government contracts arbitration attorney, CA; Gainesville, FL; Fort Lauderdale government contract arbitration defense attorney, FL; Santa Clara, CA; San Antonio, and Tampa, FL.

Contact Watson & Associates, LLC, Government Contract Arbitration Attorneys

If you have a mutual arbitration agreement in your prime subcontract and have decided to arbitrate the dispute under AAA rules, our federal government contract arbitration lawyers can represent both plaintiffs and defendants nationwide.Call us today at 1.866.601.5518. Call 24/7

Watson & Associates, LLC represents federal prime and subcontractors nationwide and overseas, with offices in Denver, Colorado and Washington, D.C. Attorney Advertising. Prior results do not guarantee a similar outcome. This page is for informational purposes only and does not constitute legal advice or create an attorney-client relationship.