FAR Part 43 Questions

Question 1

In our profession, we often find it necessary to modify a contract for a variety of reasons during post-award. As we know, it’s important to understand the type of modification to align with the correct authority.

What is a unilateral modification? Please provide an example. What is the impact of commerciality (commercial vs. non-commercial) on your approach to mod authorities?

Answer 1

• Unilateral modifications are only required to signed only by the contracting officer. Unilateral modifications are used, for example, to—

(1) Make administrative changes; 
(2) Issue change orders; 
(3) Make changes authorized by clauses other than a changes clause (e.g., Property clause, Options clause, or Suspension of Work clause); and 
(4) Issue termination notices.

When using FAR Part 12 procedures for the acquisition of commercial items, the Government does not have authority to unilaterally require changes. The commercial item clause at FAR 52.212-4, Contract Terms and Conditions — Commercial Items, requires that both parties

The Changes Clause is the cornerstone of the Government’s ability to modify a contract for non-commercial items. It provides the Government with authority that is unmatched in private-sector contracting. This clause allows the Government to unilaterally make changes in the contract without requiring the contractor’s concurrence

Question 2

What is a bilateral modification? Please provide an example.

Answer 2

Bilateral modifications results from a supplemental agreement between the contractor and the Government. The modification must be signed by the contractor and the contracting officer. Bilateral modifications are used to—

(1) Make negotiated equitable adjustments resulting from the issuance of a change order; 
(2) Definitize letter contracts; and 
(3) Reflect other agreements of the parties modifying the terms of contracts.

• One of your first questions when determining modification authority should be “is this a commercial contract”. If it is commercial one should review 52.212-4 before reviewing other clauses. Clause 52.212-4 will provide authority for many modifications.
• One of the most common errors in determining modification authorities is referencing other clauses when 52.212-4 applies.

Question 3

What is the impact of commerciality (commercial vs. non-commercial) on your approach to mod authorities?

Answer 3

Commercial Item Contracts. When using FAR Part 12 procedures for the acquisition of commercial items, the Government does not have authority to unilaterally require changes. The commercial item clause at FAR 52.212-4, Contract Terms and Conditions — Commercial Items, requires that both parties agree to changes in the terms and conditions of a contract. When this occurs, a supplemental agreement has been created.

Non-Commercial Item Contracts. The Changes Clause is the cornerstone of the Government’s ability to modify a contract for non-commercial items. It provides the Government with authority that is unmatched in private-sector contracting. This clause allows the Government to unilaterally make changes in the contract without requiring the contractor’s concurrence.

Question 4

Commonly used Changes clauses are:

Answer 4

• 52.243-1 — Changes — Fixed-Price.
• 52.243-2 — Changes — Cost-Reimbursement
• 52.243-3 — Changes — Time-and-Materials or Labor-Hours
• 52.243-4 — Changes — Construction
• 52.243-5 — Changes and Changed Conditions (Construction)