43.102
Policy
Only contracting officers can execute contract modifications, and all modifications should be priced in advance or have a negotiated ceiling price if immediate pricing is not possible.
Overview
FAR 43.102 establishes the fundamental policy for executing contract modifications in federal contracting. It restricts the authority to modify contracts to contracting officers acting within their delegated authority and prohibits other government personnel from taking actions that could mislead contractors about who can bind the government. The section also emphasizes the importance of pricing contract modifications before execution whenever possible, and requires at least a negotiated ceiling price if immediate pricing is not feasible and significant cost increases are possible.
Key Rules
- Authority to Modify Contracts
- Only contracting officers with proper authority can execute contract modifications; other government personnel are expressly prohibited from doing so or from implying such authority.
- Pricing of Modifications
- Modifications should be priced before execution if it does not harm government interests. If a significant cost increase is likely and time does not allow for full negotiation, a ceiling price must be set unless impractical.
Responsibilities
- Contracting Officers: Must ensure they act within their authority, execute all contract modifications, and price modifications in advance or set a ceiling price when necessary.
- Contractors: Should only accept modifications from authorized contracting officers and seek clarification if directed by other government personnel.
- Agencies: Must ensure only authorized personnel execute modifications and that pricing policies are followed.
Practical Implications
- This policy protects both the government and contractors by ensuring only authorized individuals can modify contracts, reducing the risk of unauthorized commitments. It also ensures cost control and transparency in contract changes. Common pitfalls include unauthorized commitments by non-CO personnel and failure to negotiate or document pricing for modifications.