HOW TO WRITE A PASS THROUGH AGREEMENT

A contractor and subcontractor may agree to pass through to the government the subcontractor's request for equitable adjustment.  Here is a suggestion on how to write that "pass through" or "sponsorship" agreement adapted from published literature of the Public Contract Law Section of the American Bar Association:

SPONSORSHIP OF REQUESTS FOR EQUITABLE ADJUSTMENT (REA)

Subcontractor will give Contractor a fully supported written REA within five (5) years after the REA accrues but in no event later than final payment under this Agreement or Subcontractor shall be barred from any remedy for such REA.

Subcontractor will cooperate fully with Contractor in prosecuting the REA against the Owner and will be bound by the outcome unless Contractor does not afford Subcontractor a reasonable opportunity to participate in the resolution of the REA or Contractor, having determined to discontinue its own prosecution of the REA, does not afford Subcontractor an opportunity to continue to prosecute the REA in Contractor’s name.

Contractor shall cooperate with Subcontractor in prosecuting the REA against the Owner but Contractor shall have the sole right to make final decisions on prosecution and settlement of the REA.   Subcontractor will take the lead in prosecuting the REA against the Owner and Contractor will assist Subcontractor by allowing Subcontractor to pursue the REA in Contractor’s name.

Subcontractor shall submit with the REA a certification to Contractor, signed by an authorized representative of the Subcontractor that the claim is made in good faith, the supporting date are accurate and complete to the best of the signatory’s knowledge and belief, the amount requested accurately reflects the contract adjustment for which Subcontractor believes the U.S. Government is liable and the signatory is authorized to certify the REA on behalf of Subcontractor.  Subcontractor indemnifies and holds Contractor harmless from damages, costs (including attorney fees) and other liabilities arising from any breach of such certification or any violation of law against misrepresentation, fraud or false statements.

Contractor and Subcontractor will each bear its own costs of prosecuting the REA.

Subcontractor shall proceed diligently with performance of this Agreement pending final resolution of any REA arising under this agreement.

This clause applies to any REA, claim or appeal arising under or related to this subcontract agreement.

 bill@spriggsconsultingservices.com