Claim sponsorship is one of the most important and frequently overlooked aspects of federal subcontracting. Because subcontractors generally lack privity of contract with the Government, their ability to pursue recovery for government-caused impacts often depends entirely on the prime contractor’s ability and willingness to sponsor a Contract Disputes Act (CDA) claim on the subcontractor’s behalf. As a result, the subcontract’s claim and dispute provisions can significantly affect whether a subcontractor can obtain meaningful relief and whether a prime contractor can effectively prosecute the claim. This blog discusses several key considerations that can help both prime contractors and subcontractors preserve, sponsor, and successfully pursue CDA claims.
Preserve the Right to Sponsor Claims
Unlike prime contractors, subcontractors generally cannot submit claims directly to a contracting officer because they lack privity of contract with the Government. As a result, a subcontractor seeking to pursue a CDA claim must do so through the prime contractor, which sponsors and presents the claim to the Government. Successful claim sponsorship, however, begins long before a dispute arises. A well-drafted subcontract should expressly require the prime contractor to reasonably cooperate in the preparation and presentation of subcontractor claims relating to contract performance.
The subcontract should establish clear procedures governing claim notice requirements, supporting documentation, record retention, certification obligations (where applicable), and the allocation of claim prosecution and litigation costs. These provisions benefit both parties. For subcontractors, they create a defined pathway for seeking recovery of costs attributable to government actions or directives. For prime contractors, they reduce the risk of disputes with subcontractors over claim sponsorship obligations and establish objective criteria for evaluating whether a claim is adequately supported before it is presented to the Government.
Importantly, claim sponsorship does not require a prime contractor to blindly adopt or submit every subcontractor request. Because the prime contractor is serving as the conduit through which the claim is presented to the Government, and, in the case of claims exceeding the CDA certification threshold, may be required to certify the claim, the prime has a legitimate interest in ensuring that the claim is factually supported, adequately documented, and legally viable. A carefully drafted subcontract can establish the information, documentation, and evidentiary support a subcontractor must provide as a condition of sponsorship. By defining these requirements at the outset of the relationship, the parties create a predictable framework through which potential claims may be assessed, developed, and, where appropriate, sponsored and pursued against the Government.
Understanding the Severin Doctrine
The Severin doctrine was established by the United States Court of Claims in Severin v. United States, decided in 1943. Specifically, under the Severin doctrine, a prime contractor generally may not recover damages from the Government on behalf of a subcontractor if the prime contractor has been completely relieved of liability to the subcontractor for those same damages. Stated differently, because the Government’s liability is derivative of the prime contractor’s liability, the prime must remain liable—or at least potentially liable—to the subcontractor for the damages being asserted.
Fortunately, complete immunity from liability is relatively uncommon, and recent decisions demonstrate the narrow application of the doctrine. See, e.g. Appeal of – Sauer Inc., ASBCA No. 62295, 25-1 B.C.A. (CCH) ¶ 38895 (Aug. 13, 2025) (holding that a settlement agreement preserving the prime contractor’s right to pursue the subcontractor’s claim avoided application of the Severin doctrine); Immixtechnology, Inc. on Behalf of Software Ag Gov’t Sols., Inc., Appellant, 22-1 B.C.A. (CCH) ¶ 37999 (Dec. 18, 2020) (rejected a Severin defense where the Government failed to establish that the prime contractor could not be liable to its subcontractor).
These decisions underscore the importance of carefully drafting and reviewing subcontract provisions addressing damages, releases, dispute resolution, and final payment. Further, subcontractors should carefully evaluate settlement agreements and contract modifications executed during performance. An overly broad release executed before recovery from the Government may inadvertently extinguish the liability necessary to sponsor a claim.
Where liability has been preserved, however, the Severin doctrine generally does not prevent a subcontractor from pursuing recovery through a sponsored claim. More often, the greater challenge is not claim sponsorship itself, but proving entitlement and quantum. Regardless of how well a subcontract is drafted, a sponsored claim is only as strong as the documentation supporting it. This makes contemporaneous recordkeeping, cost tracking, and other claim documentation essential to successfully prosecuting subcontractor claims against the Government.
Align Documentation and Cost Tracking Requirements
Even well-drafted claim sponsorship provisions provide little value if the subcontractor cannot adequately substantiate its damages.
Subcontractors should establish consistent documentation and retention requirements governing labor records, equipment use, material costs, and general financial information. In fact, particular attention should be paid to preserving contemporaneous communication regarding government directives, modifications, and/or changes.
This documentation benefits all parties involved. Prime contractors receive the documentation necessary to satisfy CDA claim requirements and lower their risk exposure, subcontractors avoid scrambling months or years later to find or estimate their costs, and the Government can properly assess the claim against it. Even if there is an adverse decision, a fulsome record upon appeal will still be a benefit to all parties moving forward.
Key Takeaways
- The prime contractor plays a vital role in claim sponsorship. As the claim is made in the prime’s name, it is imperative that a subcontractor’s claims are evaluated, documented, accurate, and made in good faith.
- Subcontractors should review their subcontracts for claim sponsorship provisions. Where such provisions exist, this allows a clearer path forward for when a claim must be sponsored. Further, without such a provision, the litigation risk between the parties increases as a prime contractor has much more latitude to refuse to sponsor a subcontractor claim.
- Subcontractors must ensure accurate, comprehensive, and contemporaneous documentation. This is particularly important as a claim requires a sum certain, and the Government will want to know how the number was reached.
- Coordinate early and communicate often. If it appears that a claim may need to be filed against the Government—even if it does not come to fruition—discussions between the prime and subcontractor can ensure that documentation is collected and retained for any potential claim.
Although disputes under federal contracts often receive attention only after project performance has deteriorated, successful CDA claims are frequently won or lost during subcontract negotiations. Careful drafting of claim sponsorship provisions, attention to the Severin doctrine, disciplined documentation requirements, and narrowly tailored release language can significantly improve the likelihood that legitimate subcontractor claims will ultimately be recoverable.
Visit Parts 1, 2, 3, 4, 5, and 6 in our series and visit this link to view our recent webinar recording to learn more about the Fundamentals of Contract Administration Disputes. Should you have questions regarding REAs, claims, appeals, or any other government contract dispute, please contact Lauren Brier, Adel Mansour, or another member of PilieroMazza’s REAs, Claims, and Appeals or Government Contracts practice groups.
