Manage Changes

Question 1

What must a contracting officer have to deal with changes in customer requirements?

Answer 1

A mechanism to deal with these changes.

Question 2

What are some uses of unilateral modifications?

Answer 2

Unilateral modifications are used to make administrative changes, issue change orders, and make changes authorized by clauses other than a changes clause.

Question 3

What is a bilateral modification?

Answer 3

A bilateral modification is a contract modification that is signed by both the contractor and the contracting officer, used to make negotiated equitable adjustments, definitize letter contracts, and reflect other agreements modifying the terms of contracts.

Question 4

Who can modify or change contracts on behalf of the Government?

Answer 4

Only warranted contracting officers acting within the scope of their authority can modify or change contracts on behalf of the Government.

Question 5

What are the two types of contract modifications according to FAR 43.103?

Answer 5

The two types of contract modifications are bilateral modifications and unilateral modifications.

Question 6

What must a contracting officer obtain before executing a contract modification that increases funds?

Answer 6

A certification of fund availability.

Question 7

What should the certification of fund availability be based on?

Answer 7

The negotiated price or, if the modification is completed before negotiation, the best available estimate of cost.

Question 8

Under what conditions can a contracting officer execute a contract modification without obtaining a certification of fund availability?

Answer 8

When the modifications are conditioned on availability of funds or contain a limitation of cost or funds clause.

Question 9

What types of changes are permitted under the changes clause?

Answer 9

The types of changes permitted are subject to the contract’s contract-type, which can be fixed-price, cost-reimbursement, or time & materials.

Question 10

What is the purpose of the changes clause in government contracts?

Answer 10

The changes clause permits the contracting officer to make unilateral changes in designated areas within the general scope of the contract.

Question 11

How are change orders documented according to FAR?

Answer 11

Change orders are documented by issuing written change orders on Standard Form 30, Amendment of Solicitation/Modification of Contract (SF 30).

Question 12

In which type of contracts is a contractor not obligated to continue performance after a change order?

Answer 12

In cost-reimbursement or incrementally funded contracts, the contractor is not obligated to continue performance or incur costs beyond the limits established in the Limitation of Cost or Limitation of Funds clause.

Question 13

What must a contractor do when a contracting officer issues a change order?

Answer 13

The contractor must continue performance of the contract as changed, except in cost-reimbursement or incrementally funded contracts.

Question 14

What should contracting officers do regarding equitable adjustments resulting from change orders?

Answer 14

Contracting officers should negotiate equitable adjustments resulting from change orders within the shortest practicable time.

Question 15

What typically results from the change order process?

Answer 15

The change order process typically results in two modifications: the modification issuing the change order and the modification issuing the supplemental agreement between the parties.

Question 16

What is a change order?

Answer 16

A change order is issued by a contracting officer directing changes in the general scope of the contract.

Question 17

Under what circumstances can a contracting officer issue a change order by electronic means without a SF 30?

Answer 17

A contracting officer may issue a change order by electronic means without a SF 30 under unusual or urgent circumstances, provided that the message contains substantially the information required by the SF 30 and immediate action is taken to issue the SF 30.

Question 18

What documents are required when change orders are not forward priced?

Answer 18

When change orders are not forward priced, they require a change order and a supplemental agreement reflecting the resulting equitable adjustment in contract terms.

Question 19

What is the purpose of a supplemental agreement in contract modifications?

Answer 19

A supplemental agreement is used to reflect the resulting equitable adjustment in contract terms when an equitable adjustment in the contract price or delivery terms can be agreed upon in advance.

Question 20

What are some examples of when unilateral modifications are used?

Answer 20

Unilateral modifications are used to make administrative changes, issue change orders, make changes authorized by clauses other than a changes clause, and issue termination notices.

Question 21

What is a unilateral agreement in contract modifications?

Answer 21

A unilateral agreement is a contract modification that is signed only by the contracting officer and is used for administrative changes, issuing change orders, making changes authorized by clauses other than a changes clause, and issuing termination notices.

Question 22

What type of modifications are all changes to commercial contracts under FAR clause 52.212-4?

Answer 22

All changes to commercial contracts under FAR clause 52.212-4 are bilateral in type.

Question 23

What does FAR clause 52.212-4(c) state regarding modifications of commercial contracts?

Answer 23

FAR clause 52.212-4(c) states that changes may only be made by written agreement of both parties.

Question 24

What is the Government’s policy regarding the resolution of contractual issues in controversy?

Answer 24

The Government’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level.

Question 25

According to FAR 33.206, how should contractor claims be submitted?

Answer 25

Contractor claims shall be submitted in writing to the contracting officer.

Question 26

What are some provisions included in the Disputes statute?

Answer 26

The Disputes statute provides for the payment of interest on contractor claims, certification of contractor claims, and a civil penalty for fraudulent claims or those based on misrepresentation of fact.

Question 27

What should agencies do before the submission of a claim according to FAR 42.304?

Answer 27

Agencies should make reasonable efforts to resolve controversies prior to the submission of a claim.

Question 28

What does 41 U.S.C. chapter 71 establish regarding claims?

Answer 28

41 U.S.C. chapter 71 establishes procedures and requirements for asserting and resolving claims subject to the Disputes statute.

Question 29

What procedures are agencies encouraged to use to resolve disputes?

Answer 29

Agencies are encouraged to use Alternative Dispute Resolution (ADR) procedures to the maximum extent practicable.

Question 30

According to FAR 33.207, what is the certification requirement for claims exceeding $100,000?

Answer 30

Contractors shall certify any claim exceeding $100,000.

Question 31

What is the time limit for presenting a claim for a decision after the accrual of a claim?

Answer 31

The claim must be presented for a decision within 6 years after accrual of a claim, unless the contracting parties agreed to a shorter time period.

Question 32

Who can execute the certification for a claim exceeding $100,000?

Answer 32

The certification may be executed by any person authorized to bind the contractor with respect to the claim.

Question 33

When does the Government pay interest on a contractor’s claim?

Answer 33

The Government pays interest on a contractor’s claim from the date the contracting officer receives the claim or from the date payment would otherwise be due, if that date is later, until the date of payment.

Question 34

What types of claims are contracting officers not authorized to decide or resolve?

Answer 34

Contracting officers are not authorized to decide claims for penalties or forfeitures prescribed by statute or regulation that another Federal agency is authorized to administer, or claims involving fraud.

Question 35

What authority do contracting officers have according to FAR 33.210?

Answer 35

Contracting officers are authorized to decide or resolve all claims arising under or relating to a contract subject to the Disputes statute, within any specific limitations of their warrants.

Question 36

What procedures can contracting officers use to resolve claims according to FAR 33.214?

Answer 36

Contracting officers are authorized to use Alternative Dispute Resolution (ADR) procedures to resolve claims.

Question 37

What factors should a contracting officer consider when determining the time to issue a decision on a claim?

Answer 37

The contracting officer should consider the size and complexity of the claim, the adequacy of the contractor’s supporting data, and any other relevant factors.

Question 38

What actions must a contracting officer take when a claim cannot be settled by mutual agreement according to FAR 33.211?

Answer 38

The contracting officer must review the facts pertinent to the claim, secure assistance from legal and other advisors, coordinate with the contract administration officer or contracting office, and prepare a written decision.

Question 39

What is the time frame for a contracting officer to issue a decision on claims over $100,000?

Answer 39

The contracting officer must issue a decision within 60 days after receiving a certified claim, and if a decision will not be issued within that time, the contractor must be notified of the expected time frame.

Question 40

What is the time limit for a contracting officer to issue a decision on claims of $100,000 or less?

Answer 40

The contracting officer shall issue the decision within 60 days after receiving a written request from the contractor or within a reasonable time after receipt of the claim if no request is made.

Question 41

What must the contracting officer provide to the Agency Board of Contract Appeals during an appeal?

Answer 41

The contracting officer shall provide data, documentation, information, and support as may be required by the agency BCA for use on a pending appeal.

Question 42

What does the Disputes statute (41 U.S.C.7103(g)) authorize agencies to require from contractors during an appeal?

Answer 42

The Disputes statute authorizes agencies to require a contractor to continue contract performance in accordance with the contracting officer’s decision pending a final resolution of any claim related to the contract.

Question 43

What can contractors do if they disagree with a contracting officer's decision?

Answer 43

Contractors can appeal the contracting officer's decisions with the applicable Agency Boards of Contract Appeals (BCAs).

Question 44

What are the two types of terminations specifically for commercial contracts?

Answer 44

Termination for Convenience and Termination for Cause.

Question 45

What is the primary condition under which a contracting officer shall terminate contracts according to FAR 49.101(b)?

Answer 45

The termination must be in the Government’s interest.

Question 46

What are the two main types of terminations for contracts?

Answer 46

Termination for the Convenience of the Government and Termination for Default (Noncommercial).

Question 47

What must notices of termination state according to FAR 49.102(a)?

Answer 47

Notices of termination must state that the contract is being terminated for the convenience of the Government (or for default), the effective date of termination, the extent of termination, any special instructions, and the steps the contractor should take to minimize the impact on personnel.

Question 48

How should notices of termination be communicated to the contractor according to FAR 49.102(a)?

Answer 48

Notices of termination must be done in writing to the contractor.

Question 49

What are the conditions under which a contracting officer shall effect a no-cost settlement instead of issuing a termination notice according to FAR 19.101(b) and FAR 49.109-4?

Answer 49

A no-cost settlement shall be effected when it is known that the contractor will accept one, Government property was not furnished, and there are no outstanding payments, debts due the Government, or other contractor obligations.

Question 50

Who is responsible for negotiating any settlement after the contracting officer issues a notice of termination according to FAR 49.101(d)?

Answer 50

The termination contracting officer (TCO) is responsible for negotiating any settlement.

Question 51

What methods can be used for the settlement of terminated cost-reimbursement contracts and fixed-price contracts terminated for convenience according to FAR 49.103?

Answer 51

Settlement may be completed by negotiated agreement, determination by the terminating contracting officer (TCO), costing-out under vouchers using SF 1034, or a combination of these methods.

Question 52

What should contracting officers do according to FAR 49.103 when settling with a contractor?

Answer 52

Contracting officers should negotiate a fair and prompt settlement with the contractor and settle by making a unilateral determination only when it cannot be settled by agreement.

Question 53

What form is used to execute a settlement agreement after a termination settlement has been negotiated?

Answer 53

Standard Form 30 (Amendment of Solicitation/Modification of Contract).

Question 54

What must a contractor submit to the Terminating Contracting Officer according to FAR 49.109-7(a)?

Answer 54

A settlement proposal within the period required by the termination clause.

Question 55

What is required before executing a settlement agreement according to FAR 49.603?

Answer 55

All required reviews must be obtained.

Question 56

What must the contractor do immediately after receiving a notice of termination according to FAR 49.104?

Answer 56

The contractor must stop work immediately on the terminated portion of the contract and stop placing subcontracts thereunder.

Question 57

What is required of the TCO if the contractor and TCO cannot agree on a termination settlement?

Answer 57

The TCO shall issue a determination consistent with the termination clause after giving the contractor at least 15 days notice to submit written evidence substantiating the amount previously proposed.

Question 58

What should the contractor do regarding subcontracts after receiving a notice of termination?

Answer 58

The contractor must terminate all subcontracts related to the terminated portion of the prime contract.

Question 59

What must the contractor do if the termination is partial?

Answer 59

The contractor must perform the continued portion of the contract and submit promptly any request for an equitable adjustment of price for the continued portion, supported by evidence of any increase in cost.

Question 60

What happens to settlement proposals of subcontractors after a termination notice?

Answer 60

All settlement proposals of subcontractors, except those specifically excepted from the agreement and reserved for separate settlement, must be considered.

Question 61

According to FAR 49.201, what should a settlement compensate the contractor for in the event of a termination for convenience?

Answer 61

A settlement should compensate the contractor fairly for the work done and the preparations made for the terminated portions of the contract, including a reasonable allowance for profit.

Question 62

What is the primary objective of negotiating a settlement for contract termination?

Answer 62

The primary objective is to negotiate a settlement by agreement, compensating the contractor fairly for the work done and preparations made for the terminated portions of the contract.

Question 63

How is fair compensation determined in contract terminations?

Answer 63

Fair compensation is a matter of judgment and cannot be measured exactly; it relies on the use of business judgment rather than strict accounting principles.

Question 64

What actions must a contractor take to protect property in their possession that the Government may acquire an interest in during contract termination?

Answer 64

The contractor must take necessary or directed action to protect and preserve the property, deliver it to the Government as directed by the TCO, and promptly notify the TCO in writing of any legal proceedings related to the terminated portion of the contract.

Question 65

Under what condition will the TCO not allow profit according to FAR subpart 49.202?

Answer 65

The TCO shall not allow profit if it appears that the contractor would have incurred a loss had the entire contract been completed.

Question 66

What does FAR subpart 49.202 state about profit on preparations made by the contractor for the terminated portion of the contract?

Answer 66

The TCO shall allow profit on preparations made and work done by the contractor for the terminated portion of the contract but not on the settlement expenses.

Question 67

What is the preferred method for settlement proposals according to FAR 49.206-2(a)?

Answer 67

The use of the inventory basis for settlement proposals is preferred.

Question 68

What happens after the TCO receives the audit report regarding the settlement proposal?

Answer 68

The TCO shall proceed with the settlement and execution of a settlement agreement upon receipt of the audit report, if applicable, and the contract audit closing statement covering vouchered costs.

Question 69

What is the time frame for a contractor to submit a final settlement proposal after a termination for convenience under cost-reimbursement contracts?

Answer 69

The contractor shall submit a final settlement proposal within 1 year from the effective date of termination, unless the period is extended by the TCO.

Question 70

What costs can the contractor propose in the settlement proposal for a terminated cost-reimbursement contract?

Answer 70

The contractor may propose only costs allocable to the terminated portion of the contract, and the settlement proposal must itemize each cost item separately.

Question 71

What must the TCO do with the settlement proposal submitted by the contractor?

Answer 71

The TCO shall submit the settlement proposal to the appropriate audit agency for review.

Question 72

What is termination for default according to FAR 49.401?

Answer 72

Termination for default is the Government’s contractual right to completely or partially terminate a contract due to the contractor’s actual or anticipated failure to perform its contractual obligations.

Question 73

What happens if a contractor can establish that they were not in default?

Answer 73

If the contractor can establish that they were not in default or that the failure to perform is excusable, the termination for default should be changed to a termination for the convenience of the Government.

Question 74

What is required before terminating a contract for default according to FAR 49.607(a)?

Answer 74

A 'Cure Notice' is required before terminating a contract for default, and it must be ensured that an amount of time equal to or greater than the period of 'cure' remains in the contract delivery schedule.

Question 75

What action can a contracting officer take upon expiration of the 10-day cure period if the failure to perform has not been cured?

Answer 75

The contracting officer may issue a notice of termination for default.

Question 76

What is the purpose of a 'Show Cause Notice' according to FAR 49.607(b)?

Answer 76

It calls the contractor’s attention to the contractual liabilities if the contract is terminated for default and requests the contractor to show cause why the contract should not be terminated.

Question 77

What may happen if a contractor fails to present an explanation in response to a Show Cause Notice?

Answer 77

Failure to present an explanation may be taken as an admission that no valid explanation exists.

Question 78

What should be done if the time remaining in the contract delivery schedule is not sufficient for a realistic 'cure' period of 10 days or more?

Answer 78

The 'Cure Notice' should not be issued.

Question 79

What should a contracting officer do if termination for default appears appropriate?

Answer 79

The contracting officer should, if practicable, notify the contractor in writing of the possibility of the termination.

Question 80

What should the Government decide when considering a default termination according to FAR 49.402-3(a)?

Answer 80

The Government shall decide which type of termination action to take, which may include default, convenience, or no-cost cancellation.

Question 81

What does FAR 49.402-3(e)(1) suggest if termination for default appears appropriate?

Answer 81

If termination for default appears appropriate, the contracting officer should take necessary actions as outlined in the regulations.

Question 82

What are the consequences for the contractor under a termination for default according to FAR 49.402-2(a)?

Answer 82

Under a termination for default, the Government is not liable for the contractor’s costs on undelivered work and is entitled to the repayment of advance and progress payments applicable to that work.

Question 83

What is the Government's right to terminate a contract for default according to FAR 49.402-1?

Answer 83

The Government has the right to terminate the contract completely or partially for default if the contractor fails to make delivery of the supplies or perform the services within the time specified, perform any other provision of the contract, or make progress that endangers performance.

Question 84

What must the contracting officer do if the contractor is a small business firm and a cure notice or show cause notice is issued?

Answer 84

The contracting officer shall immediately provide a copy of any cure notice or show cause notice to the contracting office’s small business specialist and the Small Business Administration Regional Office nearest the contractor.

Question 85

What authority does the contracting officer have if termination is in the Government’s interest?

Answer 85

The contracting officer may terminate the contract for the convenience of the Government.

Question 86

Under what condition shall a contract not be terminated for default according to FAR 49.402-3?

Answer 86

If the contracting officer determines before issuing the termination notice that the failure to perform is excusable, the contract shall not be terminated for default.

Question 87

What actions can a contracting officer take in lieu of termination for default according to FAR 49.402-4?

Answer 87

The contracting officer can permit the contractor to continue performance under a revised delivery schedule, allow performance through a subcontract or other arrangement with an acceptable third party, or execute a no-cost termination settlement agreement if the requirement no longer exists and the contractor is not liable for damages.

Question 88

What must a contracting officer do when supplies or services are still required after termination for default in cost-reimbursement contracts according to FAR 49.402-6(a)?

Answer 88

The contracting officer shall repurchase the same or similar supplies or services against the contractor’s account as soon as practicable.

Question 89

What happens to the contractor's allowable costs when a cost-reimbursement contract is terminated for default?

Answer 89

The contractor is reimbursed the allowable costs, and an appropriate reduction is made in the total fee, if any.

Question 90

Are the costs of preparing the contractor’s settlement proposal allowable when a cost-reimbursement contract is terminated for default?

Answer 90

No, the costs of preparing the contractor’s settlement proposal are not allowable.

Question 91

What principles govern the settlement of a cost-reimbursement contract terminated for default?

Answer 91

The settlement is subject to the principles in FAR subparts 49.1 & 49.3.

Question 92

Does a cost-reimbursement contract allow for recovery of excess repurchase costs after termination for default?

Answer 92

No, a cost-reimbursement contract does not contain any provision for recovery of excess repurchase costs after termination for default.

Question 93

What is required before terminating a cost-reimbursement contract for default according to FAR 52.249-6?

Answer 93

A 10-day notice to the contractor is required before termination for default.

Question 94

What is the purpose of Terminations for Convenience under commercial contracts?

Answer 94

Terminations for Convenience allow the Government to terminate the contract for its sole convenience, requiring the Contractor to stop all work and receive payment for work performed prior to termination.

Question 95

What happens if a termination for default is determined to be improper?

Answer 95

If a termination for default is deemed improper, it will be considered a termination for convenience.

Question 96

What must a Contractor do immediately upon receiving a notice of Termination for Convenience?

Answer 96

The Contractor must immediately stop all work and ensure that all suppliers and subcontractors cease work.

Question 97

What is the Contractor's liability in the event of a Termination for Cause?

Answer 97

The Contractor is liable to the Government for any and all rights and remedies provided by law and will not be compensated for supplies or services not accepted.

Question 98

What are the conditions under which the Government may terminate a contract for cause?

Answer 98

The Government may terminate for cause if the Contractor defaults, fails to comply with contract terms, or does not provide adequate assurances of future performance.

Question 99

How is the payment calculated for a Contractor upon Termination for Convenience?

Answer 99

The Contractor is paid a percentage of the contract price reflecting the percentage of work performed prior to termination, plus reasonable charges that can be demonstrated as resulting from the termination.