Changes-Fixed-Price
FAR 52.243-1 allows the government to unilaterally change certain contract terms in fixed-price contracts, but contractors must act quickly to claim equitable adjustments or risk losing compensation.
Overview
FAR 52.243-1, Changes-Fixed-Price, is a standard clause used in fixed-price contracts that allows the Contracting Officer to unilaterally make certain changes within the general scope of the contract. These changes can include modifications to drawings, designs, specifications, methods of shipment or packing, and place of delivery. If such changes affect the cost or time required for performance, the contractor is entitled to an equitable adjustment in price, schedule, or both. The clause also outlines the process for asserting a claim for adjustment, the handling of obsolete property, and the resolution of disputes. Several alternates tailor the clause for services, architect-engineer, transportation, and research and development contracts, specifying what aspects can be changed and how adjustments are handled.
Key Rules
- Unilateral Changes by Contracting Officer
- The Contracting Officer can issue written orders to change certain contract elements within the general scope, without notifying sureties.
- Equitable Adjustments
- If changes impact cost or schedule, the contractor is entitled to an equitable adjustment, and the contract must be modified accordingly.
- Timely Assertion of Adjustment Claims
- Contractors must assert their right to an adjustment within 30 days of receiving the change order, unless the Contracting Officer allows a later submission before final payment.
- Disposition of Obsolete Property
- The Contracting Officer may direct how to dispose of property made obsolete by the change.
- Dispute Resolution
- Disagreements over adjustments are handled under the contract's Disputes clause, but work must continue as changed.
- Alternates for Specific Contract Types
- Alternate versions modify the clause for services, architect-engineer, transportation, and R&D contracts, specifying different changeable elements and procedures.
Responsibilities
- Contracting Officers: Issue written change orders, determine equitable adjustments, modify contracts, and resolve disputes.
- Contractors: Comply with change orders, submit adjustment claims within required timeframes, and follow directions for obsolete property.
- Agencies: Ensure proper application of the clause and adherence to agency-specific procedures for the 30-day claim period.
Practical Implications
- This clause provides flexibility for the government to adapt contract requirements as needed, while protecting contractors' rights to fair compensation for changes. Contractors must be vigilant in tracking changes and timely in asserting claims. Failure to follow procedures can result in lost compensation or disputes. Understanding the applicable alternate is critical for compliance in specialized contract types.