52.243-3 Changes-Time-and-Materials or Labor-Hours
Source: FAR 52.243-3 on acquisition.gov
Contractors must promptly assert their right to equitable adjustments when contract changes are ordered, and continue performance while disputes are resolved.
Overview
FAR 52.243-3, "Changes—Time-and-Materials or Labor-Hours," establishes the procedures and rights for making changes to contracts awarded on a time-and-materials or labor-hours basis. This clause allows the Contracting Officer to unilaterally make certain changes within the general scope of the contract, such as altering the description, timing, or location of services, as well as specifications, shipment methods, delivery locations, and the amount of Government-furnished property. If such changes impact the contract’s price, rates, schedule, or other terms, an equitable adjustment must be negotiated and the contract modified accordingly. Contractors must assert their right to an adjustment within 30 days of receiving the change order, though late proposals may be considered before final payment. Disagreements over adjustments are handled under the contract’s Disputes clause, but contractors must continue performance as changed while disputes are resolved.
Key Rules
- Contracting Officer’s Authority
- The Contracting Officer can issue written orders to change specific aspects of the contract within its general scope.
- Equitable Adjustments
- If changes affect price, rates, schedule, or other terms, the contract must be equitably adjusted and formally modified.
- Contractor Notification
- Contractors must request adjustments within 30 days of receiving a change order, though late requests may be accepted before final payment.
- Disputes and Continued Performance
- Disagreements over adjustments are resolved under the Disputes clause, but contractors must continue work as changed.
Responsibilities
- Contracting Officers: Issue written change orders, negotiate equitable adjustments, and modify contracts as needed.
- Contractors: Submit timely adjustment requests, maintain documentation, and continue performance during disputes.
- Agencies: Oversee compliance and ensure proper contract modifications and dispute resolution.
Practical Implications
- This clause provides flexibility for the government to adapt contract requirements as needed.
- Contractors must be vigilant about tracking changes and asserting rights to adjustments promptly.
- Failure to follow procedures can result in lost compensation or compliance issues.
As prescribed in 43.205(c), insert the following clause:
Changes-Time-and-Materials or Labor-Hours (Sept 2000)
(a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the day, days of the week, etc.).
(3) Place of performance of the services.
(4) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.
(5) Method of shipment or packing of supplies.
(6) Place of delivery.
(7) Amount of Government-furnished property.
(b) If any change causes an increase or decrease in any hourly rate, the ceiling price, or the time required for performance of any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer will make an equitable adjustment in any one or more of the following and will modify the contract accordingly:
(1) Ceiling price.
(2) Hourly rates.
(3) Delivery schedule.
(4) Other affected terms.
(c) The Contractor shall assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract.
(d) Failure to agree to any adjustment will be a dispute under the Disputes clause. However, nothing in this clause excuses the Contractor from proceeding with the contract as changed.
(End of clause)