The challenge notice and the final decision

← All Insights

1. Only with reasonable grounds, and in writing

The Defense Federal Acquisition Regulation Supplement (DFARS) sets out the steps for challenging a restriction on technical data. The contracting officer may not issue a challenge notice unless there are reasonable grounds to question the validity of an assertion (DFARS 227.7103-13(d)(4)). A challenge may be made whether or not supporting documentation was first requested. Challenge notices must be in writing and go to the contractor or, in the cases where direct dealing is allowed, to the person asserting the restriction. For commercial products or services, the commercial item rules on challenges also apply to the notice (DFARS 227.7103-13(d)(4)).

Under the validation clause at DFARS 252.227-7037, the contracting officer sends the written notice to the contractor or subcontractor that made the assertion, whatever the contract says about inspection and acceptance (DFARS 252.227-7037(e)(1)). The notice and all related correspondence are handled under the procedures for classified information and controlled unclassified information.

2. What the notice must say

The notice must state the specific grounds for the challenge (DFARS 252.227-7037(e)(1)(i)). For commercial products or services, it must include enough information to reasonably show the item was not developed exclusively at private expense. It must require a response within 60 days justifying, with sufficient evidence, the current validity of the asserted restriction (DFARS 252.227-7037(e)(1)(ii)).

The notice must also explain the effect of an earlier validation (DFARS 252.227-7037(e)(1)(iii)). A final decision sustaining an identical restriction within the three years before the current challenge serves as justification for the current one. That applies if the earlier restriction was asserted by the same contractor or subcontractor, or a licensee of it. Finally, the notice must warn that failing to respond may lead to a final decision without a response (DFARS 252.227-7037(e)(1)(iv)).

3. Extensions and the response as a claim

The contracting officer will extend the time to respond as appropriate if the contractor or subcontractor submits a written request showing the need for more time (DFARS 252.227-7037(e)(2)). The DFARS describes the extension as at the contracting officer’s discretion and requires the request to be timely (DFARS 227.7103-13(d)(5)).

The written response is a claim within the meaning of the Contract Disputes statute, 41 U.S.C. 7101 (DFARS 252.227-7037(e)(3)). It must be certified in the form prescribed at FAR 33.207, regardless of dollar amount.

4. More than one challenge

A contractor or subcontractor that receives challenges to the same restrictions from more than one contracting officer must notify each of them (DFARS 252.227-7037(e)(4)). The notice states which contracting officer started the first in time unanswered challenge. That contracting officer, after consulting the contractor and the others, sets and distributes a schedule for responding to each challenge, and all parties are bound by it.

The DFARS gives a coordinating role to the contracting officer who made the earliest challenge (DFARS 227.7103-13(d)(7)). That officer consults the others, checks that all challenges concern the same restriction, and issues a schedule after consulting the person asserting it. The schedule must give that person a reasonable opportunity to respond to each challenge.

5. A final decision on every assertion

Contracting officers must issue a final decision for each challenged assertion, whether or not it has been justified (DFARS 227.7103-13(d)(6)). If the contractor or subcontractor submits no response, the contracting officer issues a final decision under the contract’s disputes clause as soon as possible after the response period ends (DFARS 252.227-7037(f)). For commercial items, sustaining the challenge still requires information showing the item was not developed exclusively at private expense. The DFARS adds that a decision that an assertion is not justified must issue as soon as practicable after the person fails to respond within 60 days or any extension (DFARS 227.7103-13(d)(6)(i)). After issuing that decision, the contracting officer follows the same later steps that apply when a responding contractor loses (DFARS 252.227-7037(f)).

If the contracting officer finds the restriction justified, the final decision sustains it and states that the government will continue to be bound by it (DFARS 252.227-7037(g)(1)). That decision issues within 60 days after receipt of the response, or within a longer period the contracting officer notifies within those 60 days. If the restriction was asserted after the offer was submitted, it is added to the contract attachment (DFARS 227.7103-13(d)(6)(ii)).

6. When the restriction is not justified

If the contracting officer finds the restriction not justified, the final decision issues under the disputes clause (DFARS 252.227-7037(g)(2)(i)). Despite the disputes clause’s own timing, it issues within 60 days after receipt of the response, or within a longer period notified within those 60 days. For commercial items, the contracting officer must again provide information showing the item was not developed exclusively at private expense.

Even then, the DFARS says the government is obliged to keep respecting the restriction through final disposition of any appeal, subject to the time limits in the clause (DFARS 227.7103-13(d)(6)(iii)). The exception is where the agency head notifies the person asserting the restriction that urgent or compelling circumstances do not permit that. Only a contracting officer’s final decision, or action by a board of contract appeals or a court, sustaining a restriction counts as validation (DFARS 227.7103-13(d)(8)). What follows a decision against the contractor is covered in after a final decision on a restriction.

7. Software challenges

For computer software, contracting officers likewise need reasonable grounds and must consider all available information first (DFARS 227.7203-13(d)(3)(ii)). The DFARS strongly encourages resolving questions through agreement between the contracting officer and the person asserting the restriction. Assertions may be challenged whether or not documentation was requested, and challenges must be in writing (DFARS 227.7203-13(d)(3)(iii)). Contracting officers must promptly issue a final decision denying or sustaining each challenged software assertion, unless the parties have agreed how to dispose of it (DFARS 227.7203-13(e)(1)).

Key terms

Challenge notice	The written notice stating the grounds for challenging an asserted restriction.
Sixty-day response	The time a contractor has to justify the restriction, subject to extension.
Certified claim	The status of the contractor’s response under the Contract Disputes statute.
Prior validation	A decision within the last three years sustaining an identical restriction by the same asserter, which justifies it again.
Validation	A final decision, or board or court action, sustaining an asserted restriction.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Data disputes can delay support for fielded equipment. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.