Sunday, October 7, 2012


Too many of us are unfamiliar with the words "whether or not changed," where they are found and what they mean.  The standard fixed price changes clause contains the following language:
If any such change causes an increase or decrease in the cost or, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting  Officer shall make an equitable adjustment in the contract price, the delivery schedule or both . . . .  (Emphasis added.)
The words, in essence, mean the contractor is entitled to an equitable adjustment which includes the effect of the change on the unchanged work.  This allows the contractor, in effect, to reprice the unchanged work to the extent the change affects that work.

While we're on the subject, the contractor always is entitled to also show entitlement to a schedule adjustment based on changes, if justified.  Too many of us forget this aspect of the changes clause as well.

These rules apply to all changes including constructive changes based on breaches of implied duties under each contract.

This concept has been around forever and is akin to the provision in FAR 49.208 which permits the contractor to reprice unchanged work after a partial termination. That regulation says that after partial termination, "a contractor may request an equitable adjustment in the price or prices of the continued portion of a fixed-price contract."

Changed or partially terminated work may well cause an increase in prices of the unchanged work especially where the change results in delay.  Material and labor costs may increase because of the delay although this is more likely in times of inflation.  The change or partial termination may also change the way in which the remaining work must be performed, making it more expensive.  The point is, these clauses contemplate recovery of a type of consequential damage resulting from the change.

The schedule adjustment aspect of the changes clause comes into play in most termination for default cases.  Every compensable change can become an excusable cause of delay, entitling the contractor to a schedule extension.

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