Would a contractor find the Government Delay of Work clause preferable?

I've been looking at 52.242-17, Government Delay of Work. The prescription states that the clause is optional when a fixed-price contract is contemplated for services, or for supplies that are commercial or modified-commercial items.

It also states that the clause is not applicable if the contract otherwise specifically provides for an equitable adjustment because of the delay or interruption; e.g when the changes clause is applicable.

However, the changes clause (52.243-1) doesn't address delay or interruption, only changes in 1) drawings, designs, or specs (when supplies are to specially manufactured for gov in accordance with drawings, designs or specs), 2) method of shipment or packing and 3) place of delivery. So, this leads me to believe if we don't have 52.242-17 on contract, then the disputes clause (52.233-1) applies with regard to any government delays.

Which got me to thinking, if a fixed-price contract is contemplated for services (or supplies that are commercial or modified commercial), would 52.242-17 be preferable in the contract to address any government delays as opposed to being left with only the disputes clause?

Assuming I've made the right connections here, there seem to pluses and minuses with each clause. What do you all think?

If this were a ccmmercial item contract, the changes clause at 243-1 wouldn't be in the contract, would it?

Did you look at any of the alternates to 52.243-1? If it's a services contract, Alternates I and II also allow for changes to "the description of work to be performed." Could a change in the period of performance, from a Contracting Officer-caused delay, count as a change in the description of work to be performed?

If this were a ccmmercial item contract, the changes clause at 243-1 wouldn't be in the contract, would it?

This has thrown me for a loop...I've been thinking on how I can miss your point. Or maybe your point is that there's no point to whether the changes clause is in the contract or not...

Anyway, so the question is whether I would prefer to accept 52.242-17 or not. Does it aid me more in the situation where the government has caused delays than the disputes clause.

Did you look at any of the alternates to 52.243-1? If it's a services contract, Alternates I and II also allow for changes to "the description of work to be performed." Could a change in the period of performance, from a Contracting Officer-caused delay, count as a change in the description of work to be performed?

No, I didn't until you mentioned it. I can see where some of those alternatives might broaden the changes clause to make 52.242-17 less important.

"This has thrown me for a loop...I've been thinking on how I can miss your point. Or maybe your point is that there's not point to whether the changes clause is in the contract or not..."

mtclymer,

I certainly don't mean to speak for Joel, and I'm sure he'll answer you himself, but I think he was pointing out that in commercial contracts, the authority for changes is in 52.212-4. 52.243-1 is only applicable to non-commercial contracts.

I certainly don't mean to speak for Joel, and I'm sure he'll answer you himself, but I think he was pointing out that in commercial contracts, the authority for changes is in 52.212-4. 52.243-1 is only applicable to non-commercial contracts.

onliberty,

What do you mean by "authority for changes"? FAR 52.212-4( c ) says "Changes in the terms and conditions of this contract may be made only by written agreement of the parties." If that statement were removed from the contract, would the CO no longer have the authority to modify the contract bilaterally?

Don,

That clause is a "significant or deeply ingrained strand of public procurement policy," so I would say even if it were left out, it would be read-in via the Christian Doctrine.

And obviously if both parties agree to change the terms and conditions, there is nothing preventing them from doing so.

But, it's just good contracting practice to cite your authority from the contract itself, so if changes need to be made, the CO should cite the appropriate clause, in this case 52.212-4 if it's a commercial contract.

Which got me to thinking, if a fixed-price contract is contemplated for services (or supplies that are commercial or modified commercial), would 52.242-17 be preferable in the contract to address any government delays as opposed to being left with only the disputes clause?

Assuming I've made the right connections here, there seem to pluses and minuses with each clause. What do you all think?

If you have the delay clause in the contract, a claim would "arise under the contract." Otherwise, it would "relate to the contract." See FAR 33.213(a).

Under the delay clause the contractor is entitled to an adjustment "excluding profit" and to some procedural safeguards. If there is no delay clause and the contractor pursues a claim relating to the contract, it would seek damages, which would likely include profit. Also, the government might not have the procedural safeguards of paragraph ( b ) of the delay clause.

onliberty,

The CO has the authority to tailor FAR 52.212-4 to remove paragraph ( c ) pursuant to FAR 12.302. If a CO did purposely remove paragraph ( c ), why would a board or court apply to read it in via the Christian Doctrine?

So, back to my original question. Would a CO have the authority to make a bilateral change to a commercial contract if FAR 52.212-4( c ) were removed?

Don,

I thought you meant if the clause itself wasn't included. I didn't realize you were getting into weird hypotheticals.

Why would a CO take that provision out? FAR 12.302(c ) states, "The contracting officer shall not tailor any clause or otherwise include any additional terms or conditions in a solicitation or contract for commercial items in a manner that is inconsistent with customary commercial practice [except by waiver]."

It's customary commercial practice that if both parties agree on the changes, they can make changes.

onliberty:

Why not just answer the question without all the sparring? The answer is that the parties to a government contract do not require express authority, contractual or otherwise, to bilaterally modify a contract they have made. It is a well-established legal principle that any two parties that can make a contract can agree to modify it. So if FAR 52.212-4( c ) were omitted for some reason, the parties could still modify the contract through bilateral agreement.

Vern,

I'm not sparring. Why would a CO take that paragraph out? Whether it's in or out, the responsibilities of the parties remain the same.

And I answered the question the first time he asked it. I said, "And obviously if both parties agree to change the terms and conditions, there is nothing preventing them from doing so."

What Don is trying to get at is whether you need the paragraph in order to modify a contract by mutual agreement. He's reacting to your statement:

"I certainly don't mean to speak for Joel, and I'm sure he'll answer you himself, but I think he was pointing out that in commercial contracts, _the authority for changes is in 52.212-_4."

What he's getting at is whether express contractual authority is needed. For purposes of his question it doesn't matter why the paragraph would have been taken out or whether it would have been. The issue is the consequence of it having been taken out. He's trying to get you to agree that no express contractual authority is needed.

I take it that your answer is that none is needed.

If you have the delay clause in the contract, a claim would "arise under the contract." Otherwise, it would "relate to the contract." See FAR 33.213(a).

Under the delay clause the contractor is entitled to an adjustment "excluding profit" and to some procedural safeguards. If there is no delay clause and the contractor pursues a claim relating to the contract, it would seek damages, which would likely include profit. Also, the government might not have the procedural safeguards of paragraph ( b ) of the delay clause.

Thank you Vern, this is very helpful - I learned something new - "arise under the contract" vs "relate to the contract"!

So on the downside, 52.242-17 would exclude profit on the adjustment, where 52.233-1 may include profit.

On the plus side 52.242-17 has some procedural safeguards for the contractor and I gather does not preclude the contractor for pursing additional remedy through 52.233-1...?

I guess it's an opinion, but sounds like 52.242-17 would be desirable in situations where the prescription is optional.

mtclymer:

FAR 52.233-1 does not allow profit. It allows a contractor to submit a claim, get a decision, collect interest, and appeal a decision. The key is that the legal principles government claims based on breach of contract (which would be claims relating to a contract) and compensatory damages would likely allow profit, which would be otherwise be barred by the clause.

As for the desirability of the clause, that depends entirely on your point of view in light of what we've discussed. I would expect that the government would consider the clause desirable. The procedural safeguards in paragraph ( b ) of 52.242-17 favor the government, not the contractor.

Vern,

Thanks, and yes I get that. I fully understand that in the commercial world, mutual agreement of the parties is all that is needed to modify a contract.

The only point I was trying to make, in relation to mtclymer's question, is that if it's a commercial contract, 52.243-1 shouldn't be in there. Instead, 52.212-4 should be.

Then, if he wanted to execute a formal mod, in block 13 of the SF30, instead of just stating "mutual agreement of the parties"(which he could do), it's best practice to cite the specific authority from the contract itself, that is, 52.212-4.

I'm a firm believer that specific is always better than general. If the contract itself gives you specific authority to do an action, use it!

----------------------

*steps onto soapbox*

And the why does matter. It's a valid question. W_hy_ would a CO ever take out that paragraph, especially since the FAR says not to do it? Why would a CO take out that paragraph if it's a completely neutral change?

The reason that paragraph is in there, is because the FAR is designed (I use that term loosely) so that contracting officers should cite the contract itself (to the extent possible) as their authority for changes. This keeps things clear-cut (to the extent possible).

Entering bizarro-world and speculating about weird "what-ifs" that would never happen only muddles the issue and confuses everybody. (See how many qualifications I have to put in front of every single thing I say?)

*steps off of soapbox*

-------------------------------------

All that said, I totally see the value in clearly delineating the difference between changes to commercial contracts and non-commercial contracts (but is there a way we can do it without entering bizarro-world?).

Here's an example of how to make the same point without entering bizarro-world.

Imagine I'm Don (*puts on fake scruffy beard and looks really angry*)

(as Don) "onliberty said. 'the authority for changes is in 52.212-4.' While this is true, I think there is an important distinction to be made that can be valuable in teaching us all the differences between commercial and non-commercial contracts. In the commercial world, mutual agreement of the parties is all that is needed to modify the contract. No express contractual authority is required. Oh, and I love onliberty's avatar."

Thank you all, very interesting discussions! I am reminded of how much I don't know.

This has thrown me for a loop...I've been thinking on how I can miss your point. Or maybe your point is that there's no point to whether the changes clause is in the contract or not...

Anyway, so the question is whether I would prefer to accept 52.242-17 or not. Does it aid me more in the situation where the government has caused delays than the disputes clause.

I have been out in the field (literally) most of today. My point the other day was that the Changes clause isnt in a commercial service or commercial item contract. Your comparison with the Delay clause is moot.

As for Changes in a commercial contract with 52.212-4 in it, paragraph ( c ) doesn't "authorize" changes. It serves to limit the government to make only bilaterally agreed changes to the terms and conditions.

A government imposed delay wouldn't be an authorized change to the contract unless both parties agreed to it, including compensation for time and/or cost impacts. Oherwise, I'm guessing that it would be some type of government breach of contract, unless a delay clause were otherwise in the contract. A delay clause provides for an adjustment within the terms of the contracts without having to sue or be sued for a breach.

Here's an example of how to make the same point without entering bizarro-world.

Imagine I'm Don (*puts on fake scruffy beard and looks really angry*)

(as Don) "onliberty said. 'the authority for changes is in 52.212-4.' While this is true, I think there is an important distinction to be made that can be valuable in teaching us all the differences between commercial and non-commercial contracts. In the commercial world, mutual agreement of the parties is all that is needed to modify the contract. No express contractual authority is required. Oh, and I love onliberty's avatar."

onliberty:

Go a little easy on Don. (Not too easy.) No one would actually delete the paragraph. He knows that. He was just trying to deal with the "authority" issue by removing the authority and seeing what you'd say.

I have been out in the field (literally) most of today. My point the other day was that the Changes clause isnt in a commercial service or commercial item contract. Your comparison with the Delay clause is moot.

As for Changes in a commercial contract with 52.212-4 in it, paragraph ( c ) doesn't "authorize" changes. It serves to limit the government to make only bilaterally agreed changes to the terms and conditions.

A government imposed delay wouldn't be an authorized change to the contract unless both parties agreed to it, including compensation for time and/or cost impacts. Oherwise, I'm guessing that it would be some type of government breach of contract, unless a delay clause were otherwise in the contract. A delay clause provides for an adjustment within the terms of the contracts without having to sue or be sued for a breach.

I have seen commercial item contracts in which the CO has inserted the changes clause from FAR 52.243-1 or one of the others In fact, I've seen that done on several occasions.

Here's an example of how to make the same point without entering bizarro-world.

Imagine I'm Don (*puts on fake scruffy beard and looks really angry*)

(as Don) "onliberty said. 'the authority for changes is in 52.212-4.' While this is true, I think there is an important distinction to be made that can be valuable in teaching us all the differences between commercial and non-commercial contracts. In the commercial world, mutual agreement of the parties is all that is needed to modify the contract. No express contractual authority is required. Oh, and I love onliberty's avatar."

onliberty,

I would not say that your statement--"the authority for changes is in FAR 52.212-4"--is true. What Vern, now joel, and I are trying to get you to understand is that FAR 52.212-4( c ) does not provide "authority" for a CO to bilaterally change a commercial contract. If a CO can remove that paragraph from the contract and still modify the contract bilaterally, then that paragraph must not have been the basis for the CO's authority.

The same is true for noncommercial contracts--express contractual authority is not required to bilaterally modify a contract.

Don,

I completely understand your point (and Vern's and Joel's). I agree with you!

I'm making a separate point.

The point I was making is that authority comes not from the clause, but from the contract.

True or false: If 52.212-4 is in the contract, the CO has the authority to negotiate a bilateral change?

(I know what you're going to say - the CO has that authority regardless - I get it!)

If 52.212-4 is negotiated into the contract, then the contract itself gives the CO the authority to make the changes - yes, this in addition to the authority he has anyway just by the nature of a mutually-agreed to change.

If you're going to negotiate a change to a commercial contract, in the modification, cite the authority the contract itself gives you - in this case 52.212-4. This is much cleaner than saying, "because I can anyway."

And of course this principle is true of any clause. The clause itself never gives the CO authority to anything unless it's incorporated into the contract. And then the authority comes not from the clause, but from the contract.

So, your point boils down to this: If 52.212-4( c ) is in the contract, then insert "52.212-4( c )" in SF 30, Block 13C, not "mutual agreement."

Why? Because it's "cleaner."

Is that right?

But 52.212-4( c ) does not say that the parties may make changes by mutual agreement. It says only that they may make changes "only by written agreement," as opposed to oral agreement. In other words, it does not authorize the parties to make changes by mutual agreement. It requires that if they make changes they do so by written agreement. So, if you want to be "clean," why would you cite 52.212-4( c ) in SF 30, Block 13C, as authority to make a change by mutual agreement? The authority must come from elsewhere. It comes from the same place as the authority to enter into the contract in the first place. There was no contract then, so the contract was not the authority to enter into it. If the parties did not need a contract in order to enter into one, why do they need to cite the contract as the authority to modify that contract?

Maybe the problem is that SF 30 is unclear and misleading.

Vern,

"So if you want to be 'clean,' why would you cite 52.212-4(c ) in SF 30, Block13C, as authority to make a change by mutual agreement?"

To your point, the clause, and thus the contract, require that mutually agreed-to changes be written. The SF30 is your written agreement. You (well, me - you can do whatever you want) cite 52.212-4 to clearly demonstrate that this mutually agreed-to change is done in a way that complies with the terms of the contract.

I'm curious - as a practical matter, what do people put in block in 13 (it may not be 13C) of the SF30 when executing a bilateral change to a commercial contract? Citing 52.212-4 is not wrong (despite the seeming tone of this thread) and is one option. There are certainly other options. I would argue that 52.212-4 is the best option, but I wonder what other people do and why.

And of course this principle is true of any clause. The clause itself never gives the CO authority to anything unless it's incorporated into the contract. And then the authority comes not from the clause, but from the contract.

So clauses in contracts don't give the CO authority, it's the contract that does? Hmm, let me just check my FAR.

Generally, Government contracts contain a changes clause that permits the contracting officer to make unilateral changes, in designated areas, within the general scope of the contract. (FAR 43.201(a))

The termination clauses or other contract clauses authorize contracting officers to terminate contracts for convenience, or for default, and to enter into settlement agreements under this regulation. (FAR 49.101( a ))

The clauses referred to in (a) of this section--(2) Give the Government the right to make inspections and tests while work is in process;... (FAR 46.202-3( b )

But I'm the one in bizarro-world.

Don, relax. I didn't mean any offense. Just an attempt to lighten the mood.

But those clauses don't do a lick unless they're actually in the contract.

onliberty,

Yes, but you wrote that once a clause is in a contract, "then the authority comes not from the clause, but from the contract." That's the part that was wrong.

I'm not offended by anything you wrote. However, I'm losing faith that you will "get it".

Don,

How about we try this:

1. You or I (hereafter "we") read a post.

2. Within that post, there is a word or phrase we take umbrage with.

3. We remember we're reading a discussion forum and not a carefully crafted, technical legal document.

4. We go back and re-read entire post (including previous posts for context, if necessary).

5. We see if we can discern the overall point the entire post is trying to make (considering context).

6. We check to see if our umbrage goes away, even if we remain slightly annoyed at poor author's unfortunate (and clearly idiotic) word choice.

7. If (6) proves successful - we offer our clarifying remarks. They will be welcome and beneficial.

8. If (6) proves unsuccessful, we go back and re-read step (3).

9. If (6) still proves unsuccessful - we ask for further clarification about what the overall point of the overall post was (while trying our hardest not to not scream the poor fool into oblivion for not "getting it.")

Deal?

You... cite 52.212-4 to clearly demonstrate that this mutually agreed-to change is done in a way that complies with the terms of the contract.

That doesn't make sense. Why would you do that? SF 30 Block 13C does not call for the CO to demonstrate that the mutually agreed-to change was done in a way that complies with the terms of the contract. That's not its purpose. The instructions on the form tell the CO to "insert... the authority under which the modification is issued." So why insert a reference to a clause that does not authorize the mutual agreement? Why, instead, would you cite a clause to prove that the change was done in compliance with a term of the contract requiring that the agreement be in writing?

Inserting 52.212-4 is dead wrong, because it doesn't comply with the instructions on the form. That clause requires only that changes by mutual agreement be made in writing_. It doesn't authorize anything._ 52.212-4 is not the best option to insert in 13C. It's not an option at all if you want to comply with the form instructions.

What did I insert in SF 30? "Mutual agreement." Sometimes I inserted 10 U.S.C. something or other. Frankly, I don't think anyone knows what the author of SF 30 wanted when he or she asked for "the authority."

Don,

How about we try this:

1. You or I (hereafter "we") read a post.

2. Within that post, there is a word or phrase we take umbrage with.

3. We remember we're reading a discussion forum and not a carefully crafted, technical legal document.

4. We go back and re-read entire post (including previous posts for context, if necessary).

5. We see if we can discern the overall point the entire post is trying to make (considering context).

6. We check to see if our umbrage goes away, even if we remain slightly annoyed at poor author's unfortunate (and clearly idiotic) word choice.

7. If (6) proves successful - we offer our clarifying remarks. They will be welcome and beneficial.

8. If (6) proves unsuccessful, we go back and re-read step (3).

9. If (6) still proves unsuccessful - we ask for further clarification about what the overall point of the overall post was (while trying our hardest not to not scream the poor fool into oblivion for not "getting it.")

Deal?

No deal. I will not conform to any code that puts the onus on the reader to figure out the author's "overall point" or excuses errors in facts or reasoning when the author hasn't bothered to take the time to think about what they are writing, verify their facts, and write clearly. We hold each other to very high standards in this forum and are better for it. I propose a simpler code: take responsibility for every word you write. Verify your facts. If you can't prove a statement is true, then qualify it with "I think" or "I'm not sure, but...". If you make a mistake and someone corrects you, say thank you--don't make excuses like "this is only a discussion forum".

Deal?

Someone once said, "A person who would spend a lot of time fretting over what to put in block 13 of SF 30 or posting a question about it at Wifcon should not be given anything else to think about. It would overload their circuits."

Back to the original topic, I cannot think of any reason why an agency should not include FAR Clause 52.242-17 when not otherwise prohibited. I have never understood why MAC Servicing Agencies have not included this clause in their contracts; it would probably save agencies money and time not litigating government delays.

Don,

I had to remove my avatar, because that philosophy doesn't seem to be welcome here.

I will tell you I retract my bemoaning of entering bizarro-world. I think it's good to enter there sometimes. I know I've learned a lot from reading discussions such as these, and if the respective parties hadn't taken the arguments into bizarro-world, I probably never would have known where reality ended and bizarro-world began. So it's good to engage in these intellectual hyper-theoretical discussions that have no real basis in reality, but by being exposed to them, you at least know when you've left reality. That in itself is very educational.

As for your deal, how about we compromise and do both? We will recognize there are bizarro-world weirdos on here (which includes me) and thus always write with Don Mansfield's linguistical preferences firmly in mind , and we'll practice the skill that's essential for any hermeneutic and read with discernment, recognizing that context is the best interpreter. If we don't at least commit to this, then no matter what we write, even if it's 10 pages of dense legalese full of every qualification imaginable, we'll be sure to find some semantical (I made that word up) disagreement, pull it out of context, and we'll be in bizarro-world every time!

I read things on here all the time that, if I were to get super-technical, I could quibble with, including what you and Vern write. But I understand the milieu and recognize sometimes people speak colloquially. You know, like a conversation?

Don't get me wrong, I see the value of ensuring common interpretation and clarifying things that sometimes require more precise definitions. But there's a difference between that and claiming someone is misinformed, hasn't checked their facts, or has used erroneous reasoning just because they answered in a way that didn't use the exact words in the exact order that I would have preferred.

Let's let common sense, if not prevail, at least have a seat at the table.

And Don, believe me it's nothing personal. I appreciate your style and of course your knowledge!

Vern,

I must be misunderstanding you. We must be talking past each other. Assuming I’m understanding you correctly, I completely disagree.

I would never advise a CO to use some general reasoning for a modification when the specific reasoning is contained within that very contract.

Clauses are put into contracts because the parties anticipate things might come up that those specific clauses address. When one of those things does come up, we say, “ah, we have anticipated this and put this clause in the contract for precisely this reason.” Then, when we modify the contract, we cite that clause.

Now, if something comes up that wasn’t previously anticipated, maybe there is a clause in the contract that addresses it, maybe there isn’t. If there isn’t, then we rely on some means outside of the contract, such as statute or general contracting principles or whatever. But that is our second best option.

What I’m reading is that you think it’s “dead wrong” to cite the clause in the contract that addresses the very action you’re doing.

It sounds to me like you’re saying because the SF30 uses the word “authority” in section 13C, and because the authority to enter into bilateral modifications in commercial contracts technically doesn’t result from 52.212-4, it’s “dead wrong” to cite that clause in that box even though that clause was written and included specifically for this purpose.

It seems to me you're saying it’s wrong to cite the clause because it doesn’t technically comply with the strict, technical definition of one word in the instructions on the form? A form to which you even state you’re not sure why it was written that way? The form is a means to an end. I feel like we’ve totally lost sight of the forest for the trees again.

Wouldn’t it seem more reasonable to simply say you wish they would have used a word other than “authority” in block 13C rather than go against the plain basic intent and established best practices of contracting?

onliberty:

I don't remember when last I encountered such intellectual artless dodging.

Since you apparently don't (or won't) understand plain English, I think the correct thing for me to say at this point is that you and I just disagree and that there is no ground for further communication between us on this topic. Perhaps not on any topic.

Don, my advice to you is to not waste any more time on this and to finish the article you owe me.

I have been out in the field (literally) most of today. My point the other day was that the Changes clause isnt in a commercial service or commercial item contract. Your comparison with the Delay clause is moot.

As for Changes in a commercial contract with 52.212-4 in it, paragraph ( c ) doesn't "authorize" changes. It serves to limit the government to make only bilaterally agreed changes to the terms and conditions.

A government imposed delay wouldn't be an authorized change to the contract unless both parties agreed to it, including compensation for time and/or cost impacts. Oherwise, I'm guessing that it would be some type of government breach of contract, unless a delay clause were otherwise in the contract. A delay clause provides for an adjustment within the terms of the contracts without having to sue or be sued for a breach.

I should have added that 52.212-4 ( c ) not only requires mutual agreement, as opposed to the right of the government to order changes unilaterally, it requires written agreement, as opposed to oral agreement. While I am not a lawyer, this language appears to be an attempt to implement, in a way, the Uniform Commercial Code, paragraph 2-209 (2) in contracts for commercial items . Paragraph (2) discusses putting a no oral modification term in a contract and (I think) requires both parties to sign the written modification.

EDITED, 6/25/2015:

I have seen commercial item contracts in which the CO has inserted the changes clause from FAR 52.243-1 or one of the others In fact, I've seen that done on several occasions.

Vern, That doesn't necessarily mean that it is being inserted correctly, at least if they work for DoD. However, I think that the FAR, its supplements and guidance are fairly weak on describing such "customary commecial practices" as changing or modifying commercial contracts. I also didn't find anything indicating that 52.212-4 ( c ) could be deleted or replaced by a Changes clause. Thats not to say that there may be some guidance somewhere...

I don't think that deleting paragraph ( c ) and substituting a FAR changes clause that provides for unilateral change orders and allows unilateral definitization of change orders is consistent with customary commercial practices. Hetre is a link to a page at DAU discussing "Contract Modifications and Changes" at:

https://dap.dau.mil/acquipedia/Pages/ArticleDetails.aspx?aid=ad7f10df-7780-418c-a6fb-709c1014532c

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. Commonly used Changes clauses are:

• 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
• 52.243-5 -- Changes and Changed Conditions

Contracts for non-commercial items may be modified by use of a change order, which is a unilateral order signed by the contracting officer directing the contractor to make changes using the authority of the various Changes clauses. If the change order causes an increase or decrease in the cost of, or time required for, performance of any part of the work under the contract, the contracting officer must make an equitable adjustment in the contract price, the delivery schedule, or both.

onliberty,

The CO has the authority to tailor FAR 52.212-4 to remove paragraph ( c ) pursuant to FAR 12.302. If a CO did purposely remove paragraph ( c ), why would a board or court apply to read it in via the Christian Doctrine?

Don, where does FAR 12.302 give the CO the authority to remove paragraph 52.212-4 ( c )? Please see the DAU page that I referred to above for modifications and changes.

EDIT: I suppose that one could do so with an approved waiver.

joel,

FAR 12.302( a ) allows tailoring of FAR 52.212-4. A CO could tailor FAR 52.212-4 to be silent regarding changes if it were customary commercial practice or if a waiver were granted.

Don't think about it in practical terms. It was a hypothetical example used to make a point. All that matters is that it is possible.

Vern... I don't think that deleting paragraph ( c ) and substituting a FAR changes clause that provides for unilateral change orders and allows unilateral definitization of change orders is consistent with customary commercial practices.

"Customary commercial practices" vary by industry and market. With how many industries and markets are you so intimately familiar as to know whether they include changes clauses in their contracts? I frankly don't think that your general assertion about customary commercial practices is very smart.

In any case, FAR 12.302( c ) allows agencies to waive the "customary commercial practices" condition in accordance with their own procedures.

The contracting officer shall not tailor any clause or otherwise include any additional terms or conditions in a solicitation or contract for commercial items in a manner that is inconsistent with customary commercial practice for the item being acquired unless a waiver is approved in accordance with agency procedures. The request for waiver must describe the customary commercial practice found in the marketplace, support the need to include a term or condition that is inconsistent with that practice and include a determination that use of the customary commercial practice is inconsistent with the needs of the Government. A waiver may be requested for an individual or class of contracts for that specific item.

See Crescent Helicopters, GAO B-284734, 2000 CPD ¶ 90 (May 30, 2000).

And what on Earth do you mean by "unilateral definitization"?

I have a quick question for those more familiar with this topic than I am. The various Changes clauses that are used in contracts for non-commercial items permit the issuance of change orders within the general scope of the contract. It is my understanding that one of the purposes for this limitation is to avoid the situation where the government is acquiring supplies or services without obtaining competition. On the other hand, I see no language similar to "within the general scope" in 52.212-4. Does this mean that there is no limit on the type of change that can be agreed to by the parties under a contract for commercial items? In other words, are out of scope changes permitted in contracts for commercial items?

No.

I think that the earliest GAO decision restricting the extent to which work could be added to a contract without competition was Comptroller General McCarl to the Secretary of the Interior, 5 Comp. Gen. 508, A-12445, January 21, 1926, which stated:

IN GENERAL, AN EXISTING CONTRACT MAY NOT BE EXPANDED SO AS TO INCLUDE ADDITIONAL WORK OF ANY CONSIDERABLE MAGNITUDE, WITHOUT COMPLIANCE WITH SECTION 3709, REVISED STATUTES, UNLESS IT CLEARLY APPEARS THAT THE ADDITIONAL WORK WAS NOT IN CONTEMPLATION AT THE TIME OF THE ORIGINAL CONTRACTING AND IS SUCH AN INSEPARABLE PART OF THE WORK ORIGINALLY CONTRACTED FOR AS TO RENDER IT REASONABLY IMPOSSIBLE OF PERFORMANCE BY OTHER THAN THE ORIGINAL CONTRACTOR. THE APPARENT PROBABILITY THAT THE ADDITIONAL WORK MAY BE DONE MORE CONVENIENTLY OR EVEN AT LESS EXPENSE BY THE ORIGINAL CONTRACTOR, BECAUSE OF BEING ENGAGED UPON THE ORIGINAL WORK, OR OTHERWISE, IS NOT CONTROLLING OF THE MATTER AS TO WHETHER THE PROVISIONS OF SECTION 3709 ARE FOR APPLICATION. WHETHER THE ORIGINAL CONTRACTOR CAN DO THE WORK AT LESS EXPENSE TO THE GOVERNMENT THAN CAN ANY OTHER CONTRACTOR IS POSSIBLE OF DEFINITE DETERMINATION ONLY BY SOLICITING COMPETITIVE BIDS AS CONTEMPLATED UNDER SAID SECTION

Capitalization in original. The decision makes no mention of a changes clause or the phrase "within the general scope of the contract."

I think that the clause language "within the general scope [of this contract]" originated in Bureau of the Budget Standard Form 23, issued November 19, 1926 for use in construction contracts. The Comptroller General's decision predated the clause and its language.

Since the original Comptroller General decision predated the language in the clause and made no mention of the clause or the phrase "within the general scope of the contract," it is clear to me that it was the statutory requirement for competition (Revised Statute 3709), not the clause language, that effected the restriction. I am virtually certain that the same would be true under CICA. Thus, I do not think that the absence of the "scope" language in FAR 52.212-4 permits out of scope changes to be made without competition or justification and approval.

Thanks.

...In any case, FAR 12.302( c ) allows agencies to waive the "customary commercial practices" condition in accordance with their own procedures.

See Crescent Helicopters, GAO B-284734, 2000 CPD ¶ 90 (May 30, 2000).

I agree that one may obtain a waiver to customary commercial practices. I don't necessarily agree with saying "in any case", however. How do you know that an agenciy may waive the "customary commercial practices" condition in accordance with their own procedures. "in any case"?

Concerning Crescent Helicopters, the decision at hand discussed technical requirements or invoicing requirements that either didn't change the overall nature the services from "commercial" or that closely resemble commercial services ("of a type").

The RFP requirements, which are assertedly inconsistent with customary commercial practices, are not of such a nature as to transform the type of services sought here to something other than a commercial item. In this regard, we note that the FAR definition of commercial item speaks in terms of services of a "type" offered and sold in the commercial marketplace under standard commercial terms and conditions; it does not require that the services be identical to what offerors provide their commercial customers. Aalco Forwarding, Inc., supra, at 15-17. In fact, as noted below, similar requirements to those asserted to be inconsistent with commercial practice exist in commercial contracts. While, as discussed below, there is one requirement in the RFPs that may not be consistent with commercial practice, it is permissible for a commercial item solicitation to have noncommercial terms and still remain a solicitation for a commercial item.

The Decision primarily discussed technical requirements and invoicing procedures that the protestor said weren't consistent with customary commercial practices. The agency obtained a waiver for one technical requirement during the course of the protest.

As far as inconsistent "clauses" go, this wasn't germaine to the decision. The government responded to "a portion of the clauses" in its report and the protestor didn't provide any details in its initial protest or further discussion. The GAO deemed these issues as abandoned and didnt consider them further.

Note 2. The protester also lists in its protest 88 clauses that appear in the RFPs that it contends, without any further explanation, are inconsistent with customary commercial practice. Protest at 2-3. The agency responded in its report by examining a portion of the clauses to which Crescent objected, and noting and documenting comparable provisions found in various commercial contracts. Contracting Officer's Statement at 5. Since Crescent did not further discuss this contention in its comments responding to the report, we deem these issues abandoned and will not consider them further. International Management and Communications Corp., B-272456, Oct. 23, 1996, 96-2 CPD Para. 156 at 2-3 n.2.

Title VIII of FASA, Section 8002,. REGULATIONS ON ACQUISITION OF COMMERCIAL ITEMS states, in part (emphasis added):

( b ) Contract Clauses .—(1) The regulations prescribed undersubsection (a) shall contain a list of contract clauses to be included in contracts for commercial items the acquisition of commercial end items. Such list shall, to the maximum extent practicable, include only those contract clauses—

(A) that are required to implement provisions of law or executive orders applicable to acquisitions of commercial items or commercial components, as the case may be; or ( B ) that are determined to be consistent with standard commercial practice.

I said "I don't think that deleting paragraph ( c ) and substituting a FAR changes clause that provides for unilateral change orders and allows unilateral definitization of change orders is consistent with customary commercial practices". What does "to the maximum extent practicable" mean? Is it just words or is there a intent expressed that requires some judgement or limitation on waiving?

I readily admit that I don't know whether there are any areas of commercial practice for supplies or services that allow the customer to unilaterally direct changes to the terms and conditions of the contract or that allow the customer to unilaterally establish any adjustment to the price or time involved if the parties don't or can't mutually agree.

Actually, the Changes clause requires the KO to make an adjustment to the price or time if the change impacts them.

I have not formally studied Business Law or the U.C.C. since I took a night class in it at a local college back in 1983. I'm not aware of any such practice. I have not personally performed extensive market research into every industry or market that would be considered a commercial item.

I provided a link to a page at DAU discussing "Contract Modifications and Changes" at: https://dap.dau.mil/...fb-709c1014532c

I can see where the customer having the ability to unilaterally order a change to a vendor or manufacturer's standard product or service could cause problems and that it could impete interest or participation in the government's acquisition by commercial entities. You and I both know that there are many firms that won't have anything to do with government acquisitions due to the government's clauses, rules and/or regulations and/or red tape.

And what on Earth do you mean by "unilateral definitization"?

The Changes clause would allow the KO to unilaterally definitize (establish) the adjustment to the contract by the change order.

From Black’s Law Dictionary:

definition of DEFINITIZATION (Black's Law Dictionary)

The final agreement or contract about a decision. It can be about cost or the scope of a project.

Note that a final agreement is not necessarily required for a "definitization" in the above definition.

From Black’s Law Dictionary:

What is DEFINITIZED ITEM? definition of DEFINITIZED ITEM ...

Definition of DEFINITIZED ITEM: An element of a project that has been established.

thelawdictionary.org/definitized-item/

Note that the item or element doesn't necessarily have to be established bilaterally - at least from the above definition.

FAR Clause 52.243-1 -- Changes -- Fixed-Price requires that the KO adjust the contract price and modify the contract. It doesn't state that the adjustment has to be established by mutual agreement of the parties.

.

..( 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.

FAR 43.204 -- Administration., (b ) "Definitization" requires KO's to negotiate equitable adjustments resulting from change orders in the shortest practicable time and provides for various procedures.

It doesn't address what happens if the contractor doesn't submit a proposal or if the parties can't reach an agreement.

Since, under the Changes clause, the KO "shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract", if it can't be done bilaterally, the KO must unilaterally definitize (establish) the adjustment to the contract by the change order.

I agree that one may obtain a waiver to customary commercial practices. I don't necessarily agree with saying "in any case", however. How do you know that an agenciy may waive the "customary commercial practices" condition in accordance with their own procedures. "in any case"?

You misunderstood my use of "in any case." My bad. It's a careless expression that I've got to stop using. However, I did say "in accordance with [the agency's] procedures."

The Changes clause would allow the KO to unilaterally definitize (establish) the adjustment to the contract by the change order...

Since, under the Changes clause, the KO "shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract", if it can't be done bilaterally, the KO must unilaterally definitize (establish) the adjustment to the contract by the change order.

Thank you. Understood.