Why begin, "In consideration..."?

Voyager said:

This has me scratching my head at FAR 43.204(c)(2):

It says the consideration, or thing of value, that the contractor brings to a supplemental agreement containing an equitable adjustment as the result of a change order is a promise that it will not hold liable the government for further equitable adjustments. Isn't the consideration the promise to perform the contract as changed?

No, they've already promised to do that in their offer (assuming it contained the Changes clause).

Voyager, "consideration" mentioned in the release language you quoted refers to consideration provided by the government to the contractor.

Retreadfed said:

Voyager, "consideration" mentioned in the release language you quoted refers to consideration provided by the government to the contractor.

Is the modification consideration for the promise to release, or is the promise to release consideration for the modification?

That is the question.

Or is "In consideration of" being used as nothing more than ordinary English phrasing, as in "in view of" or "in light of", with no legalistic intent?

What say ye, Forum?

Don Mansfield said:

No, they've already promised to do that in their offer (assuming it contained the Changes clause).

Oh. Hence, the change order required no further consideration to be made effective. I get that now, so my proposition is null.

Retreadfed said:

Voyager, "consideration" mentioned in the release language you quoted refers to consideration provided by the government to the contractor.

But I disagree with this, based on my understanding of the English involved here. I assume that the beginning phrase (from "In" to "adjustment,'") is an adverbial phrase modifying the verb "releases". The noun in the sentence is "Contractor".

Vern Edwards said:

Is the modification consideration for the promise to release, or is the promise to release consideration for the modification?

That is the question.

Or is "In consideration of" being used as nothing more than ordinary English phrasing, as in "in view of" or "in light of", with no legalistic intent?

What say ye, Forum?

Based on my above assumption, I would say the Contractor's promise to release claims is consideration for the Government's offered contract modification. Especially since "releases" is active, not passive.

If my above assumption is false, then "in consideration of" is mere colloquialism as you suggest.

Vern Edwards said:

Is the modification consideration for the promise to release, or is the promise to release consideration for the modification?

That is the question.

Or is "In consideration of" being used as nothing more than ordinary English phrasing, as in "in view of" or "in light of", with no legalistic intent?

What say ye, Forum?

This is my first time commenting in these forums and I do not have decades of experience in government contracting so take my input with a grain of salt, but I interpret that language to be synonymous with "in view of" or "in light of" rather than a reference to a consideration made by the contractor or government. I recently completed a Contractor's Assignment of Release for a DOD contract with the language "Pursuant to the terms of the contract and in consideration of costs as provided for in said contract..." at the beginning of the document. There were no additional "considerations" outside of the proposed work provided by either party.

I think it means “in return for” the modification(s) agreed to herein as complete equitable adjustments for the Contractor's ________________ (describe) ___________ “proposal(s) for adjustment…

See Oxford Languages dictionary definition at a Google Search of “what does in consideration of” mean

Also this under the same search question:

“For a contract release to be legally enforceable, it must meet certain legal criteria:

1. Mutual Consent: All parties involved must voluntarily agree to the release terms.

2. Consideration: There must be something of value exchanged (e.g., monetary compensation, settlement, or service completion).

3. Clarity of Terms: The release language must be clear and specific about which claims are being waived.

Vern Edwards said:

Or is "In consideration of" being used as nothing more than ordinary English phrasing, as in "in view of" or "in light of", with no legalistic intent?

No legalistic intent. Again borrowing for discussions elsewhere in Forum. A relational intent of the parties where each party gives to the other something to change the contracts original intent. And as a relational intent the parties are committing to not go back on the deal but it not a guarantee of possible legal challenge.

The text at issue is:

In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor's ________________ (describe) __________________ “proposal(s) 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 “proposal(s) for adjustment” (except for ____________________ ).

That's one sentence. Let's rewrite it.

The subject of the sentence is the Contractor. Let's put the subject first, where it belongs:

The Contractor...

The predicate of the sentence is 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 “proposal(s) for adjustment...

Let's put the predicate after the subject, where it belongs:

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 “proposal(s) for adjustment (except for___________)...

Now, where should we put In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor's ________________ (describe) __________________ “proposal(s) for adjustment..."?

How do we complete the rewrite?

What say you?

At the beginning. 🤪

Edit: But if you insist, how about something like “This modification agreed to herein serves as consideration for complete equitable adjustments for the Contractor's ________________ (describe) __________________ “proposal(s) for adjustment..."?

IMO, the current wording is adequate.

Since the release is only applicable to bilateral modifications, the above or similar wording must be included as the legal basis for the release…

@joel hoffman So you think the mod is consideration for the release, not the other way round?

Yes . I think that is the way it reads right now .

“In consideration of… the contractor hereby releases the government of…”

Of course, I’m not a lawyer. I’m sure that lawyers wrote or approved the existing language.

EDIT: This or similar language was supposedly included in the initial issuance of the FAR in 1983-1984 (per a Google Search). The same language is in a 1998 FAR that I still have. I dont have access to the FACs cited for SUBPART 43.2 in that FAR edition.

Vern Edwards said:

@joel hoffman So you think the mod is consideration for the release, not the other way round?

Vern, you are a close friend of one of the all-time most respected Contract Law attorney Professors. Is this a test? I’m pretty sure that R.C.N., Jr., Esq. knows. 🤠

@joel hoffman

Based on the text of the Changes clause, isn't agreeing to an equitable adjustment a pre-exiting legal duty of the government? Didn't it promise to do that and to modify the contract when it signed the contract?

(b) If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract.

Vern Edwards said:

@joel hoffman

Based on the text of the Changes clause, isn't the granting of an equitable adjustment a pre-exiting legal duty of the government?

Yes. But the release is only applicable to supplemental agreements, not a unilateral equitable adjustment.

Just now, joel hoffman said:

But the release is only applicable to supplemental agreements, not a unilateral equitable adjustment.

On what basis do you say that?

Vern Edwards said:

In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor's __

A unilateral modification for an equitable adjustment is open for further contractor dispute. It isn’t necessarily final and complete.

I should have said supplemental agreements for the equitable adjustments, not interim agreements. It also allows for exceptions to the releases .

When a CO sends the contractor a mod to be signed as a supplemental agreement, isn't that an offer to settle?

I’ve never seen that done. Sending a bilateral mod as an offer, doesn’t seem to me to reflect a clear mutual understanding of the settlement. Nonetheless, unless the release is included, it isn’t necessarily final and complete. And it might not include exceptions which are allowed…

Much case law on the finality of releases and exceptions. I’m not a lawyer. Just a retired practitioner.

I’ve got to mow the yard and watch football. Ask Ralph. 🤠

Just now, joel hoffman said:

Ask Ralph. 🤠

I did. He said he wasn't sure. We both laughed. 😁 I don't know, either.

Vern Edwards said:

I did. He said he wasn't sure. We both laughed. 😁 I don't know, either.

🌹👍 🤠

Personally, I think the whole statement is wordy and unnecessary. Why not just rewrite it to say, "The Contractor hereby releases the Government, in consideration of the modification(s) agreed to, from all liability under this contract for further equitable adjustments arising from the “proposal(s) for adjustment” (except for _________)."

Vaughn said:

[T] he whole statement is wordy and unnecessary. Why not just rewrite it...?

Why not?

On 9/6/2025 at 7:41 AM, Vern Edwards said:

Quote: In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor's ________________ (describe) __________________ “proposal(s) 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 “proposal(s) for adjustment” (except for ____________________ ).

Vaughn said:

"The Contractor hereby releases the Government, in consideration of the modification(s) agreed to, from all liability under this contract for further equitable adjustments arising from the “proposal(s) for adjustment” (except for _________)."

Just a comparison for info.

I see in the language @Vaughn sets forth we lose the applicability of the release to the underlying facts or circumstances surrounding the change the Government made. We instead apply the release of claims to all things the Contractor wrote in their proposal. So, they could just issue a new proposal and get another swing at it. Imagine a disgruntled contractor up at the plate: "Strike 8 - try again!"

In DOD I once had a boss who was a former NCO that used to say, "Disapproved! Please submit again in 90 days for further disapproval."

I agree with Voyager. The clause has worked since 1984.

joel hoffman said:

The clause has worked since 1984.

It's worked longer than that. It appeared at 32 CFR 22-304(b) in 1975:

26-204 Complete and Final Equitable Adjustments. (a) Controversies sometimes arise in interpreting what the parties to a contract intended to include within the scope and terms of the supplemental agreement equitably adjusting changes. To assure that equitable adjustments are complete, contractors should make every reasonable effort to present to the Government all elements of adjustment arising out of the change order to which the equitable adjustment pertains. Supplemental agreements containing a release of claims should be made only after all such elements of adjustment have been presented and considered.

(b) The following is a sample release for use in supplemental agreements: RELEASE OF CLAIMS In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor's ........................................ (describe) ........................................ claim s, 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 aforesaid claims (except for: .............................. ).

It probably appeared in regulations long before that.

The issued is not whether it "worked". The issue is, as raised by the OP, how does one interpret "In consideration of..."

I say it refers to consideration flowing from the contractor to the Government in return for it's agreement to modify the contract.

But I could be wrong.

With the "facts or circumstances" language put back in, that leaves open Vern's two questions still:

On 9/6/2025 at 1:02 PM, Vern Edwards said:

When a CO sends the contractor a mod to be signed as a supplemental agreement, isn't that an offer to settle?

A binding contract requires offer, acceptance of the offer, and consideration. Assuming FAR Part 15 source selection procedures were used, prior to award the Contractor proposal's promissory statements were the offer, and, unless the Government counteroffered in discussions, the award document was acceptance of the offer. Consideration, according to The Government Contracts Reference Book, is either a benefit to the offeror or a detriment to the buyer, so at time of award without discussions, consideration was the Government's promise to pay the sums stated in the contract.

Now, here at time of contract modification, I assume the parties are actually negotiating. Now the supplemental agreement drafted by the Government is the offer, as it captures the REA proposal's promissory statements and any other promises the Government offers to the Contractor buyer for bilateral signature. Again, consideration must be either a benefit to the offeror or a detriment to the buyer. Here the detriment to the buyer is the promise to release claims.

On 9/6/2025 at 8:41 AM, Vern Edwards said:

Let's put the predicate after the subject, where it belongs:

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 “proposal(s) for adjustment (except for___________)...

Now, where should we put In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor's ________________ (describe) __________________ “proposal(s) for adjustment..."?

Look at this phrase again: it seems to say the "modification(s)" are the consideration*. But I just said the promise to release claims is the consideration. It is unclear as written. I therefore propose the whole entire template language remain the same except for the first word. Change "In" to "As". Then the offer is the supplemental agreement draft, the acceptance is the Contractor's bilateral signature, and the consideration is the promise to release.

*Here, the modification is actually the binding contract. It is the instrument that requires offer, acceptance, and consideration.

On 9/6/2025 at 12:46 PM, joel hoffman said:

a unilateral equitable adjustment.

What is this?

Retreadfed said:

What is this?

It’s when the government issues a unilateral modification for an equitable adjustment to the contract price and/or contract time due to a directed change order or constructive change or under another applicable contract clause that may provide for an equitable adjustment, such as Differing Site Conditions, etc.

There can also be unilateral mods for price adjustments but no profit/fee or non-compensable time extensions, etc, etc….

On 9/6/2025 at 12:02 PM, Vern Edwards said:

When a CO sends the contractor a mod to be signed as a supplemental agreement, isn't that an offer to settle?

I think only two contract clauses in the FAR System expressly permit a CO to unilaterally adjust a contract price: FAR 52.230–6 Administration of Cost (June 2010**)** Accounting Standards and GSA FAR Supp. 552.216-71, Economic Price Adjustment—Special Order Program Contracts (August 2010).

However, it has been done in the past. See Paragon Energy Copr., 88-3 ENGBCA ¶ 20959 (Eng. B.C.A.), ENGBCA No. 5302 (1988):

The lack of parallelism of the faces of the flywheel of .0035 inches caused the Appellant delay and extra cost. Some of the delay was intermingled and concurrent with several other causes of delay during the alignment process. The Government has already made a unilateral equitable adjustment of $10,000 and granted a 3 day time extension. Of this, approximately $5,000 was for work by G.E. On the basis of a jury verdict, we conclude that the total equitable adjustment due the Appellant in this appeal (which adjustment includes the Government's unilateral of $10,000) is $20,000 and 10 day time extension for delay to the alignment process.

Such an adjustment may be disputed. Note that such a unilateral mod is not conditioned on receipt of a release of claims. But it could save the government some interest on a later claim for more money.

On 9/6/2025 at 12:02 PM, Vern Edwards said:

When a CO sends the contractor a mod to be signed as a supplemental agreement, isn't that an offer to settle?

Vern, if you mean, after completion of negotiations and agreement, sending the mod unsigned mod to the contractor to sign and return, I suppose that may be considered an offer to settle, although the parties have already settled the issue through negotiation or a proposal and acceptance of the proposal by either party. .

joel hoffman said:

Vern, if you mean, after completion of negotiations and agreement, sending the mod unsigned mod to the contractor to sign and return, I suppose that may be considered an offer to settle, although the parties have already settled the issue.

The parties have not settled the issue until both have signed the mod. Prior to that they only have a tentative agreement, which may be subject to approval by higher authority on both sides.

joel hoffman said:

t’s when the government issues a unilateral modification for an equitable adjustment to the contract price and/or contract time due to a directed change order or constructive change or under another applicable contract clause that may provide for an equitable adjustment, such as Differing Site Conditions, etc.

Looking at the language of the Changes clause wouldn't this be in the form of a contracting officer's decision under the Disputes clause? I don't see any other way for a CO to unilaterally issue an equitable adjustment.

The CO could just do it. What's to prevent? It would not be binding on the contractor, because without a release of claims the contractor could submit a supplemental claim for more money. An upward unilateral EA would give the contractor some money pending resolution of supplemental claim(s).

On 9/6/2025 at 12:43 PM, Vern Edwards said:

Based on the text of the Changes clause, isn't agreeing to an equitable adjustment a pre-exiting legal duty of the government? Didn't it promise to do that and to modify the contract when it signed the contract?

I think Vern is on to something here. Let's did into this a little deeper. The Changes causes permit the CO to issue certain types of changes. I think we all agree that no additional consideration is necessary for the CO to do this. The consideration for this power was provided at the time of contract inception. Similarly, no additional consideration is required for a CO to agree to an equitable adjustment for a permissible change under the Changes clause. Therefore, the contract modification memorializing these two actions needs no further consideration because that consideration was already provided when the contract was formed. This brings up the question of what consideration is needed for the contractor to provide a release after the parties agree on an equitable adjustment under the Changes clause. None of the Changes clauses requires such a release. However, the parties can agree on including the requirement for a release in the contract. If they do, I would argue that the consideration for providing any such release running to the contractor is included within the price/estimated cost of the contract. On the other hand, if there is no clause in the contract requiring such a release and the CO wants to require one unilaterally, that brings up a lot more questions than consideration.

@Retreadfed Actually, I think you have shown me that I am wrong to think that the release is consideration for the mod.

I'm beginning to think that since no clause requires a release, and since making an equitable adjustment after issuance of a change order is a pre-existing duty of the government and something to which the contractor is already entitled, the government's request for a release is what requires consideration.

🤔😳😵‍💫

We occasionally had contractor’s whose legal departments’ policy was not to sign a release. The usual excuse was that the impact of cumulative effect of changes couldn’t be pre-determined. Then we’d get the REA at the end of performance. Raytheon was a prime example. They “tried” but had zilch of a case to support it. . That’s another story…

joel hoffman said:

We occasionally had contractor’s whose legal departments’ policy was not to sign a release. The usual excuse was that the impact of cumulative effect of changes couldn’t be pre-determined. Then we’d get the REA at the end of performance. Raytheon was a prime example. They “tried” but had zilch of a case to support it. . That’s another story…

I've only had large firms refuse to sign a release. Never once have I had a small biz push back. Maybe because they don't have the bandwidth at that level?

Motorcity said:

I've only had large firms refuse to sign a release. Never once have I had a small biz push back. Maybe because they don't have the bandwidth at that level?

I don’t remember every firm that signed only with reservations but you are probably right.

Edit: The last one I was directly involved with was a large business civil works contractor, Granite Construction, 12 or 13 years ago.