Construction contracts
If actual unit-priced quantities in a construction contract vary by more than 15% from estimates, contractors can demand price and time adjustments—but must act quickly and in writing.
Overview
FAR 11.702 addresses how construction contracts handle variations in estimated quantities for unit-priced items. If the actual quantity of a unit-priced item differs from the estimated quantity by more than 15% (either higher or lower), either the Government or the contractor can demand an equitable adjustment to the contract price. Additionally, if the quantity variation causes a delay, the contractor may request a time extension. This request must be submitted in writing to the contracting officer within 10 days from the start of the delay period, though the contracting officer can extend this deadline before final settlement. The contracting officer is responsible for verifying the facts and making justified adjustments to the contract completion date as needed.
Key Rules
- Variation Threshold
- If the actual quantity of a unit-priced item varies by more than ±15% from the estimate, an equitable price adjustment is required upon request.
- Request for Time Extension
- Contractors may request a time extension if the quantity variation increases the time needed for completion, but must do so in writing within 10 days of the delay's start.
- Contracting Officer's Role
- The contracting officer must review the facts and grant justified time extensions, and may extend the request deadline before final settlement.
Responsibilities
- Contracting Officers: Review written requests, verify facts, and make equitable adjustments to price and/or schedule as justified.
- Contractors: Monitor quantity variations, submit timely written requests for price adjustments or time extensions, and provide supporting documentation.
- Agencies: Ensure oversight of equitable adjustments and adherence to procedural requirements.
Practical Implications
- This section ensures fairness when actual work quantities differ significantly from estimates, protecting both parties from undue risk.
- Contractors must be vigilant about tracking quantities and delays, and act quickly to preserve their rights.
- Delays in submitting requests or insufficient documentation can result in lost opportunities for adjustment.