When Can a Subcontractor Sue? Less Often Than You Would Think

Many companies are actively involved in government contracting as subcontractors. These subcontractors may sell products and services directly to the government, interact with government personnel on a daily basis, and even sometimes play a major role in drafting a prime contractor’s proposal. Certainly, the government’s actions have a major impact on the business of the subcontractors. However, many subcontractors do not realize a critical aspect of their dealings with the government: they are generally not permitted to sue the government when something in the relationship goes wrong.

The Armed Services Board of Contract Appeals ("ASBCA") recently upheld this long-standing rule in the case of Alpine Computers Inc., ASBCA No. 54659, 05-02 BCA ¶ 32,997. In that case, Alpine agreed to serve as a subcontractor to Network Resource Services, Inc. ("NRS") under a time and materials service contract. NRS was to assist the Air Force by providing labor and