Customer Satisfaction

Question 1

Customer Satisfaction

Answer 1

FAR Parts 7, 11, and 43

FAR Part 7 - Acquisition Planning

FAR Part 11 - Describing Agency Needs

FAR Part 43 - Contract Modifications

Question 2

Time of delivery/performance must be

implied based on merchantability standards and industry usage

realistic and clearly stated within the solicitation

unduly restrictive of competition

as short as practical to reach an unreasonable price determination
FAR 11.402

Answer 2

realistic and clearly stated within the solicitation

Question 3

For a seller who has multiple Defense Priorities and Allocation System (DPAS) orders from federal agencies, the correct order of priority (highest being ?first) for orders from contracts in support of the national defense:

DO rated orders, DX rated orders, unrated orders

DX rated orders, DO rated orders, unrated orders

DO rated orders, unrated orders, DX rated order

Unrated orders, DO rated orders, DX rated orders
FAR 11.603

Answer 3

DX rated orders, DO rated orders, unrated orders

Question 4

The contracting officer must consider the potential impact on pricing, competition, and contract administration before using the ___________ clause.
disputes
termination
liquidated damages
competition
FAR 11.50

Answer 4

liquidated damages

Question 5

The two levels of the Defense Priorities and Allocations System (DPAS) are _______.
DX and DA
DO and DX
DE and DA
DE and DO
FAR 11.603

Answer 5

DO and DX

Question 6

When should acquisition planning begin?

Generally, no later than one year before the anticipated award date of the contract.

Once a contracting officer’s representative (COR) has been nominated.

As soon as practicable after the agency’s fiscal year funding has been appropriated by Congress.

As soon as the agency need is identified, preferably well in advance of the fiscal year in which contract award or order placement is necessary.
FAR 7.104

Answer 6

As soon as the agency need is identified, preferably well in advance of the fiscal year in which contract award or order placement is necessary.

Question 7

Who is authorized to execute contract modifications on behalf of the Government?

Only the head of the contracting agency

Only the COR

Any contracting officer

Only a contracting officer acting within the scope of his or her authority
FAR 43.102

Answer 7

Only a contracting officer acting within the scope of his or her authority

Question 8

When should a Contracting Officer use the liquidated damages clause?

All contract types, all the time

Commercial items on T&M contracts

Never

When delivery or performance is so important that the government may reasonably expect to suffer damage and the extent or amount of damage is impossible to estimate accurately or prove.
FAR 11.501

Answer 8

When delivery or performance is so important that the government may reasonably expect to suffer damage and the extent or amount of damage is impossible to estimate accurately or prove.

Question 9

Acquisition officials should state requirements with respect to an acquisition of supplies or services in terms of all the below factors EXCEPT:

functions to be performed.

performance requirements.

essential physical characteristics.

non-performance related characteristics
FAR 11.002(a)(2)(i)

Answer 9

non-performance related characteristics

Question 10

Which of the following is NOT a reason to use a liquidated damages clause in a solicitation?

The extent of the damage expected by the Government cannot be accurately estimated

The Government may reasonably expect to suffer damage if the delivery is delinquent

Timely performance is so important that the Government will suffer damage if performance is delinquent

A negative performance incentive for timely delivery or performance is needed
FAR 11.501

Answer 10

A negative performance incentive for timely delivery or performance is needed

Question 11

For variation in quantity clauses, the overrun or underrun permitted in each contract should be based upon the normal commercial practices of a particular industry for a particular item, and the permitted percentage should be no larger than is necessary to afford a contractor reasonable protection.
20%
1%
10%
5%
FAR 11.701(b

Answer 11

10%

Question 12

What are the two types of contract modifications?

Negotiated and administrative
Limited and unlimited
Enforceable and unenforceable
Unilateral and bilateral
FAR 43.103

Answer 12

Unilateral and bilateral

Question 13

Which factors should not be considered in establishing delivery or performance schedules?
Urgency of need
Market conditions
Industry practices
Sole source capabilities
FAR 11.402

Answer 13

Sole source capabilities

Question 14

Acquisition plans for service contracts or orders must describe the strategies for implementing _____ acquisition methods or must provide rationale for not using those methods.
Performance-based.
Outcome-based.
Streamlined.
Innovative.
FAR 7.105

Answer 14

Performance-based.

Question 15

If market research indicates that commercial or non-developmental items might not be available to satisfy agency needs, what shall the agency do?

Order a similar item from a GSA schedule and modify it to fit the agency’s need

Reevaluate the need and determine whether the need can be restated to permit commercial or non-developmental items to satisfy the agency’s need

Cancel the agency’s requirement

Solicit and award a contract for a developmental item
FAR 11

Answer 15

Reevaluate the need and determine whether the need can be restated to permit commercial or non-developmental items to satisfy the agency’s need

Question 16

Which of the following is true regarding the determination that consolidation is necessary and justified because the benefits of the consolidated acquisition would substantially exceed the benefits that would be derived from alternative contracting approaches?

Such benefits must be quantifiable in dollar amounts.

Such benefits may not include the reduction of administrative or personnel costs alone.

Such benefits that are quantifiable in dollar amounts are substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to fifteen percent of the estimated contract or order value, including options.

Such benefits may include the reduction in acquisition cycle times.
FAR 7.107-2

Answer 16

Such benefits may include the reduction in acquisition cycle

Question 17

A written acquisition plan must include the following EXCEPT:

Applicable conditions

Risk and Risk Mitigation

Statement of Need

Source Selection Evaluation Board Report
FAR 7.105

Answer 17

Source Selection Evaluation Board Report

Question 18

A Department of Commerce regulation in support of approved national defense, emergency preparedness, and energy programs is known as the _____________.

Defense Priorities and Allocation System.

DOC Emergency Authorization System.

Approved program.

Defense Authorization Act.
FAR 11.600

Answer 18

Defense Priorities and Allocation System.

Question 19

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What is acquisition planning?

Answer 19

Acquisition planning is the government process of thinking carefully about the best way to purchase and maintain whatever the government buys, including the full life-cycle cost.

Question 20

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What does life-cycle cost mean?

Answer 20

Life-cycle cost means the total cost for the government of acquiring, operating, supporting, maintaining, and eventually disposing of whatever the government buys. The important concept is that the government’s total cost does not stop after the contract is signed, or even after the contract period of performance is completed.

For complex purchases, such as multi-million-dollar programs, the life-cycle costs can span decades. The cost of supporting or maintaining major weapons systems can be several multiples of the upfront purchase price. You can compare this process to the life-cycle cost of your car. In addition to the purchase price of the car, you must pay for parking, maintenance, repairs, insurance, fuel, and other lifecycle costs.

Question 21

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

Why should contractors care about acquisition planning and life-cycle cost?

Answer 21

By understanding the government’s responsibilities for acquisition planning and consideration of lifecycle cost, you can form persuasive arguments that help you sell more to the government. By incorporating these concepts into your proposal, or response to requests for information, or sales pitch, you can gain the trust and confidence of your government clients.

Question 22

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

When should the process of acquisition planning begin?

Answer 22

Acquisition planning should begin as soon as the agency need is identified. If your company wants toinfluence the acquisition planning, you need to act quickly and anticipate the government’s needs.

Question 23

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What is consolidation?

Answer 23

Consolidation refers to when the government combines two or more requirements into a single contract. In other words, instead of awarding two or more contracts, the government awards only one contract. Consolidation of contracts can save time and money but can also prevent smaller companies from competing on the consolidated contract. Larger contracts provide a distinct advantage for larger companies.

Question 24

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What is bundling?

Answer 24

Bundling is a minority subset of consolidation. Not all consolidation qualifies as bundling, but all bundling is also consolidation. Bundling occurs when the government consolidates two or more requirements that were previously performed by small businesses, and that consolidated contract is no longer suitable for performance by small businesses. Therefore, bundling is a subset of consolidation that shuts out the possibility of small business performing as the prime contractor. For these reasons, the government avoids bundling requirements. When the government decides to bundle contracts, they must justify the decision in writing.

Question 25

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

Why should contractors care about government policy about consolidation and bundling?

Answer 25

Government contracting officers and other senior leadership are supposed to make decisions based on market research, including decisions about acquisition planning. Your company is part of the wider market; therefore, the opinions, arguments, or facts specific to your company qualify as market research. Your company can influence government decisions by providing information that qualifies as market research. Provide your information in writing.

You can respond to Requests For Information (RFI) or formal notices of consolidated or bundled contract competitions. Your written response can identify the negative impacts on small businesses, which may persuade the government to avoid consolidation orpersuade the government to avoid consolidation or bundling. In some cases, you could write an email to the agency’s Director of Small Business (or Office of Small and Disadvantaged Business Utilization or Office of Small Business Programs). The Director of Small Business may act as your company’s advocate to the program or contracting office.

Question 26

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What is the policy on having federal employees versus contractors perform services?

Answer 26

That question is difficult to answer because policy preferences change every few years. So, let’s discuss the decision factors so you can better understand the landscape.

Question 27

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What is an inherently governmental function?

Answer 27

An inherently government function is a service, action, determination, or duty so intimately related to the public interest that it requires a federal employee’s performance (rather than a contractor’s).
Some activities cannot or should not be outsourced to contractors, we call them inherently governmental functions.

The simplest example is the President of the United States, whom Americans elect via the electoral college to be the chief executive. Although the following example is silly, it colorfully illustrates the principle of inherently governmental activities.

If the duly elected President of the United States hired a contractor to make every single decision, while the President drank margaritas in the Florida Keys, most Americans would be rightfully angry. Why is the President outsourcing the principal duties of the Office of the Presidency? Why is a contractor— who was not elected-making decisions that affect the entire nation? Why is a contractor writing and signing executive orders and negotiating deals with foreign leaders? Keep this silly example in the back of your mind when you consider other examples of inherently governmental activities.

Question 28

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What are some
examples of inherently
governmental activities?

Answer 28

FAR Part 7 provides a long list of inherently government activities, such as:
Conducting criminal investigations
Commanding military forces
Determining agency policy
Directing federal employees
Controlling intelligence operations
Awarding, administering, or terminating contracts
Determining agency budgets

Question 29

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

What are some examples of functions that do not qualify as inherently governmental activities, but are awfully close to qualifying, and therefore require further scrutiny?

Answer 29

FAR Part 7 provides a list of functions that almost qualify as inherently government activities and therefore merit special consideration, including contractor services relating to the following:

Budget preparation
Reorganization or planning
Analysis, feasibility studies, and strategy options
Development of regulations
Acquisition planning
Contract management (government contracting)
Responses to Freedom of Information Act requests Legal advice and interpretations of regulations or laws

Question 30

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

Wait! The previous list sounds like many of the services provided by federal contractors to several different agencies. What is the explanation?

Answer 30

Remember, the list is a warning, not a direct prohibition. Contractors can perform services related to those functions, but the government must exercise caution to ensure the services do not cross the line of inherently governmental functions.

Question 31

FAR PART 7, ACQUISITION PLANNING

FAR Part 7 explains how the government makes acquisition decisions and what qualifies as inherently governmental functions.

How does this work in the real world?

Answer 31

The simplest explanation is that contractors, in the 21st century, are an integral part of the federal workforce. Contractors are not federal employees, but contractors work side-by-side in support of federal employees.
While only federal employees can make decisions or determinations, contractors are regularly hired to assist and support federal employees. This difference is subtle yet important. As long as the federal employee makes the final decision or determination, contractors can usually avoid any problems with performing inherently governmental functions.

Onsite contractors should learn this word and use it often: “recommendation.” As in, “My recommendation is that the agency follows simplified acquisition procedures.” “I recommend that the Director conduct a full audit.” “I do not recommend that the Deputy
Assistant Secretary attend the meeting.”

Always remember that your contractor employees, if they work as onsite contractors, side-by-side federal employees, are hired to make recommendations, not decisions. Let the federal employees make final decisions and determinations. Stay in your lane!

Train your employees about the policies surrounding inherently governmental functions. Each of your employees should understand the basics and know how to proceed if asked to perform inappropriate services.

Question 32

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

What is the government’s policy for describing what it wants to buy?

Answer 32

The government has several policy goals when describing what it wants to buy from industry, including:

Using market research to formulate an intelligent description of what it wants
Promoting full and open competition
Using restrictive conditions only as necessary
Encouraging commercial supplies or services
Describing requirements in terms of functions to be provided, performance specifications, or essential physical
characteristics

Question 33

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

What does it mean to describe requirements in terms of functions to provide, performance specifications, or essential physical characteristics?

Answer 33

The goal of these policies is to shape government solicitations towards objective outcomes or characteristics so that any qualified contractor can win and perform the contract. Avoid using a brand name or proprietary technology in the description of the requirement so that many companies can compete, instead of just one or few.

For example, let’s discuss the agency’s need for laptop computers. We will start with a very poor, anticompetitive description of the agency’s needs:

“The agency needs an Apple-branded laptop computer that has smooth edges.”

This description is anticompetitive because only Apple can manufacture the laptop. There are no required functions or performance specifications. Also, having smooth edges sounds like a personal preference, not an essential physical characteristic that will help the agency or its employees.

Let’s modify the agency’s description to fit the policy goals found in FAR Part 11:
“The agency needs a laptop computer that contains a disk drive, performs with no interruption in very hot weather (above 90 degrees Fahrenheit), and can fit within a backpack that is 16 inches wide, 20 inches long, and 8 inches deep.”

Now the requirements follow the policy goals of
FAR Part 11 by describing objective performance specifications, functions, or physical characteristics.

Disk drive (function to be provided)

Performs in hot weather (performance specification)
Fits in a backpack (essential physical characteristic)

Question 34

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

What is the common theme shared between performance specifications, required functions, and essential physical characteristics?

Answer 34

The common theme is these factors are objective needs (rather than subjective preferences) and can be satisfied by almost any company, rather than a single company. These factors are not proprietary or monopolized by a single brand or company. Any company can evaluate these objective characteristics to determine whether they can provide the item. As such, the revised statement of what the government needs will attract more companies and proposals and therefore, more competition.

Question 35

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

Why does the government prefer commercial, rather than custom, solutions?

Answer 35

Commercial solutions are available immediately and have been sold (or offered) to the open market-not just to the government. Developing a new product or new service includes, of course, development and testing costs. The custom-developed item may not work as reliably as solutions that go back many years.
Finally, the custom-developed item will usually have a price higher than a commercial solution because the custom item has only one potential customer-the government.

Question 36

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

Does the government buy commercial items using a different method of contracting?

Answer 36

Yes, the federal government has commercial procedures for procuring commercial items. Thesecommercial procedures significantly speed upthe government contracting process. Therefore,commercial procedures are preferred by law and regulation. Remind the government of the preferencefor commercial items and commercial procedures whenever possible. For more information, read Part 12, Acquisition of Commercial Items.

Question 37

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

Does the term “commercial items” include goods and services?

Answer 37

Yes, the term commercial items include products and services. Your company’s products and your company’s services may be classified as “commercial items” for government contracting purposes. Remember:
Commercial items include both physical goods and intangible services.

Question 38

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

Can the government restrict the contract competition to a particular brand name?

Answer 38

Yes, some government contract solicitations will restrict competition to a particular brand name. Other competitions will restrict competition to brand nameor equal, which allows a contractor to provide acomparable substitute.

Question 39

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

What rules must the government follow to restrict the solicitation to a brand name?

Answer 39

If the solicitation is restricted to a particular brand name only, the government must say so explicitly and explain its justification. It is acceptable to limit competition to a brand name, but there must be a reason the government needs the brand name. It cannot be based solely on a brand preference. There must be some other relevant or “salient” characteristic of the brand name that benefits the government.

Requiring Apple products is an example of a government contract competition restricted to a brand name. The justification could be that the entire information technology system of the government is compatible only with Apple products. However, the justification cannot be that the government employees simply “like” Apple products.

Question 40

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

Why would the government restrict the solicitation to brand name or equal?

Answer 40

Brand name or equal allows slightly broader competition than a solicitation limited to a specific brand name. If the government knows that the objective specifications of a brand-name product will meet the requirement, reliance on brand name or equal could make sense. Whenever possible, the government should restrict to brand name or equal rather than brand name only.

The government does not need the specific brand, but it knows that the performance characteristics of a particular brand will satisfy its needs. If there is some other brand or manufacturer that can provide at least the same objective specifications, the government will have no problem contracting with the alternative brand or manufacturer.

For example, the government could restrict competition to something brand name or equal to the Apple iPhone X. The government could list the objective specifications of the Apple iPhone X, which the contractor must meet or exceed to win the contract. Apple can win this competition by supplying the iPhone X. However, any Apple competitor can also win this competition if it supplies a cell phone that meets or exceeds the same specifications. In this way, brand name or equal provides more competition, more options, and therefore better pricing than restricting to brand name only.

Question 41

FAR PART 11, DESCRIBING AGENCY NEEDS

FAR Part 11 explains how the government describes what it wants to buy.

Is a brand name restriction the same as a sole-source contract?

Answer 41

A sole-source government contract means that one company alone on planet Earth can provide the goods or services. The government must write, sign, and publicize a special justification to restrict competition to only one source. Read more about this special justification in Part 6, Competition Requirements.

Sole source is not the same as brand name only. For example, Honda cars can be sold by many different car dealerships. Many Honda dealerships are not owned by Honda. In contrast, Tesla cars are sold by authorized Tesla dealerships only. No Tesla resellers currently exist (in this example). If the government requires a Honda brand name, many sources exist to deliver the Honda brand name, i.e., Honda dealerships.
In contrast, if the government requires a Tesla brand name, this requirement is effectively “sole source” because only Tesla can supply the car.

Question 42

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is a unilateral modification?

Answer 42

A unilateral modification changes the terms and conditions of your contract but requires no signature from the contractor. Therefore, the contracting officer issues the modification unilaterally.

Question 43

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is a bilateral modification?

Answer 43

A bilateral modification changes the terms and conditions of your contract using a signature from both the contracting officer and contractor. Another term for bilateral modification is supplemental agreement.

Question 44

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is an administrative change or administrative modification?

Answer 44

An
administrative change
or administrative
modification is a type of unilateral modification that
does not affect the rights or obligations of the contractor. For example, the contracting officer may change the type of appropriated money used to pay you, or may change the government payment office that sends you money, but there is no effect on your payments or rights.

Question 45

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

Can a unilateral modification change my obligations under the contract?

Answer 45

Yes, for example, a unilateral modification under the Changes clause requires your company to comply.
Although your company may be entitled to an equitable adjustment (more money), you are obligated to follow the directions of any proper exercise of the Changes clause. Another example is a unilateral exercise of an option: Your company has no choice but to perform the option period if it is properly exercised in a unilateral modification.

Question 46

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

How can I distinguish between unilateral and bilateral modifications?

Answer 46

Always look at Block 13 of the Standard Form (SF) 30, which describes the contracting officer’s authority or justification for issuing the modification.

Question 47

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is the Changes clause?

Answer 47

Several versions of the Changes clause allow the government to change the contract unilaterally, within certain limits, using a change order. Your company must comply with authorized changes, although you may be entitled to an equitable adjustment. For more info, read Part 33, Protests, Disputes, and Appeals, as well as Part 52, Solicitation Provisions and Contract Clauses.

Question 48

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is a change order?

Answer 48

A change order is any form of written direction from the contracting officer that requires your company to perform the contract differently. The change order can be a formal modification or an email or a letter.
Based on the Changes clause, the contracting officer directs some change and your company must comply.
However, your company may be entitled to an equitable adjustment (more money, a schedule extension, or some other relief).

Question 49

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

Do commercial government contracts allow for unilateral change orders?

Answer 49

No, commercial government contracts using FAR Part 12 procedures do not allow for unilateral changes.
All changes under commercial government contracts must be agreed upon by signature of the contracting officer and contractor. If your commercial government contract includes some version of the Changes clause, you should negotiate to remove it. For more info about commercial contracting procedures, read Part 12, Acquisition of Commercial Items.

Question 50

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is a constructive change?

Answer 50

A constructive change is a doctrine of law invented by judges that protects your company from getting
“ripped off.” If the contracting officer’s words, writings, communications, acts, or failure to act causes your company to make changes under the contract-even though there was no formal change orderthe doctrine of constructive changes may entitle your company to an equitable adjustment. In other words, if the contracting officer’s action or inaction seems like a change order-even though it was not a formal, written change order-it may be construed or interpreted as if it were a formal, written change order.

This doctrine protects your company from being swindled by a contracting officer who nudges you towards different work and refuses to pay you because
“there was no official, written change order.” Be careful about relying on constructive changes. A better idea is to ask for a written modification whenever you suspect a change order or any change to the contract.

Question 51

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is an equitable adjustment?

An equitable adjustment is a modification to the contract price, schedule, or other terms to reflect changed circumstances. Most equitable adjustments are in response to a change order directed by the contracting officer under the Changes clause. For example:

Answer 51

1. Contracting officer issues a change order to use more expensive material
2. Your company complies with the change order because of the Changes clause
3. Your company incurs greater
   costs
   than
   contemplated under the original contract
4. Your company submits a request for equitable adjustment (REA) for more money
5. Contracting officer grants your REA
6. Contracting officer modifies the contract to pay you more money (equitable adjustment)

Question 52

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is a request for equitable adjustment or REA?

Answer 52

Learn more about requests for equitable adjustment
(REA) and claims under the Contract Disputes Act in Part 33, Protests, Disputes, and Appeals. You can also read my full-length article on this topic by emailing me at Christoph@ChristophLLC.com.

Question 53

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

If a modification is described as “no big deal,” why should my company take a closer look?

Answer 53

Sometimes the government contracting officer will include changes or updates to clauses in the contract.
“No big deal,” the contracting officer may say. “These are just the latest versions of the same clauses.”

Do not fall for this dirty trick. Yes, of course, the Federal Acquisition Regulation (FAR) clauses change over time.
Yes, it is true that each FAR clause shows the timing of the last update or version of that clause— for example, November 2016. None of this information is relevant to your specific contract. Your specific contract was a deal you struck, precisely showing all the clauses in your contract, as of the date of the contract.

If the government wants to change or update any ofthese clauses, your company may be entitled to receivemore money or some other consideration. Whenyou hear the term consideration, think of money orsomething else of recognizable value.

Question 54

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter.

What is a Contractor’s Statement of Release?

Answer 54

Sometimes the modification will include language that waives your right to request money or other reliefto comply with the new clauses. Watch out for this language in your modification:

“Contractor’s Statement of Release
In consideration of the modifications) agreed to herein as complete equitable adjustments for the Contractor’s
(describe)
“proposals) for adjustment,” the Contractor hereby releases the Government from any and all liability under this contract for further equitable adjustments attributable to such facts or circumstances giving rise to the “proposals) for adjustment” (except for_
).”

You might sign this modification, eager to proceed, butnot recognizing that you are also signing away yourrights to additional money. Do not make this mistake.Review every modification carefully, even if it’s “no big deal

Question 55

FAR PART 43, CONTRACT
MODIFICATIONS

FAR Part 43 explains the various types of contract modifications you may encounter

Should I permit any changes to the contract that are not formalized in writing?

Answer 55

No! Do not allow the government to make changes to your business relationship that are not established in writing. The change can start off with a conversation, but it must be followed by something in writing. I have seen countless disasters that could have been avoided by following this advice.