Federal contracting often separates performance from dispute resolution. A contractor may be required to continue work while a claim is being decided. Prime contractors frequently pass some version of that concept into subcontracts.
For a subcontractor, the commercial risk depends on how broadly the clause is written. Continuing clearly funded undisputed work is different from being required to finance unlimited disputed work with no written change, no price path, and no payment protection.
The FAR contains a continue-performance concept
FAR 52.233-1 states that the contractor shall proceed diligently with performance pending final resolution of requests for relief, claims, appeals, or actions covered by the clause and comply with the contracting officer's decision. FAR 33.213 discusses the Government's ability to require continued performance pending dispute resolution.
Those provisions govern the prime-Government relationship. A subcontractor should read the downstream clause actually included in its subcontract rather than assume the wording is identical.
Official source: FAR 52.233-1 — Disputes.
Four questions matter before signing
- Does the obligation apply only to work within the existing scope, or also disputed extra work?
- Must the prime issue written direction before disputed work proceeds?
- How are costs tracked and preserved while price is unresolved?
- Can the prime withhold unrelated undisputed payments because a dispute exists?
Pair the clause with change authority and notice rules
A continue-performance clause should not be reviewed in isolation. If the subcontract also says only one named person can authorize changes, the subcontractor needs a process for receiving direction, giving notice, segregating costs, and preserving rights while continuing performance.
Likewise, a short notice clause can require action within days even though the dispute itself may take months to resolve.
Watch for one-sided financing risk
The clause deserves closer review if it requires unlimited continued performance regardless of nonpayment, exhausted funding, material scope expansion, or a prime refusal to issue any written direction. The issue is not whether disputes should stop all work; it is whether the contract defines a workable path for disputed work without shifting every financing risk downstream.