Subpart 43.2
Change Orders
FAR Subpart 43.2 mandates that only authorized contracting officers can issue written change orders, and both parties must follow strict procedures for documentation, accounting, and equitable adjustments.
Overview
FAR Subpart 43.2 covers the requirements and procedures for issuing, administering, and accounting for change orders in government contracts. Change orders are written directives from the contracting officer that alter the terms, scope, or conditions of a contract. This subpart establishes who has the authority to issue change orders, how they must be documented, the accounting procedures required, and the administrative responsibilities for both contracting officers and contractors. It also references the mandatory contract clauses that must be included to allow for change orders. The subpart ensures that changes are managed in a controlled, auditable manner to protect both government and contractor interests.
Key Rules
- General Requirements
- Change orders must be issued in writing by the contracting officer and are used to make unilateral changes within the general scope of the contract.
- Authority to Issue
- Only contracting officers with proper authority may issue change orders, and they must ensure the contract contains the appropriate clauses.
- Accounting Procedures
- Contractors must maintain adequate accounting records to segregate costs associated with change orders for proper pricing and audit.
- Administration
- Both parties must promptly negotiate equitable adjustments resulting from change orders and document all changes and agreements.
- Contract Clauses
- Contracts must include specific clauses (e.g., FAR 52.243-1 through 52.243-5) that authorize and govern change orders.
Responsibilities
- Contracting Officers: Issue written change orders, ensure authority and proper clauses, negotiate adjustments, and maintain documentation.
- Contractors: Comply with change orders, segregate and account for costs, and participate in negotiations for equitable adjustments.
- Agencies: Oversee compliance, ensure proper procedures are followed, and maintain audit trails.
Practical Implications
- This subpart exists to ensure that contract changes are managed transparently and fairly, minimizing disputes and ensuring proper compensation for additional work. It impacts daily contracting by requiring strict documentation, timely negotiations, and robust accounting. Common pitfalls include unauthorized changes, inadequate cost segregation, and delays in negotiating adjustments.