The First 72 Hours: Handling a Prime-Sub Dispute

If a prime contractor–subcontractor dispute just landed on your desk, the steps you take in the first 72 hours can shape the outcome of the entire dispute.

In government contracting, prime-sub relationships are foundational — but when they break down, the disputes that follow are often among the most complex and contentious in the industry. The stakes extend beyond money: in a highly competitive industry where past performance matters, how a dispute is handled can affect a company’s standing with the ultimate government customer and its ability to win future work.

In this episode of Inside Litigation, Ian Hoffman draws on his experience litigating prime-sub disputes to explain what in-house counsel must do from the moment a dispute arrives — and why the parties who have built a contemporaneous record of performance and performance problems are consistently the ones who come out ahead.

Watch the rest of the Inside Litigation series here.

Key Takeaways

• Move fast on deadlines and preservation. In-house counsel must identify time-sensitive obligations at the outset: cure notices requiring a response within a set period, statute of limitations deadlines, and shortened limitations periods that may be buried in the subcontract itself.
• Know the contract and build the record early. The specific terms of the subcontract — including any program-level modifications to standard templates — can materially shape the dispute. Understanding exactly what the subcontract says is a day-one priority.
• Let the business objective drive strategy. Knowing the business’s ultimate objective — whether that is parting ways with a contracting partner, improving the relationship, or recovering damages — should drive every strategic decision that follows.