Tailoring clause 52.212-4 for unilateral modifications

You may be able to modify the clause to permit the Government to issue unilateral changes if such a practice is consistent with customary commercial practice. If it is not consistent with customary commercial practice (I believe this to be the case), you may be able to modify the clause if you obtain a waiver per your agency's procedures. I believe it is unlikely you have the basis to do so, but you make that decision after you look a the the FAR and a GAO decision.

See FAR 12.302( c): 

(c) Tailoring inconsistent with customary commercial practice. 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 a discussion of such waivers in the GAO decision U.S. Foodservice, Inc.; Labatt Food Services, LP File: B-404786; B-404786.2; B-404786.3; B-404786.4, May 13, 2011: https://www.gao.gov/assets/400/392210.pdf.

DIGEST

Protest of the terms of solicitation for food distribution services on grounds that the terms are inconsistent with commercial practice and are otherwise unreasonable is denied where the agency properly issued a waiver in accordance with Federal Acquisition Regulation § 12.302(c) for commercial item solicitation requirements that may be inconsistent with customary commercial practice, and the record shows that the terms are reasonably justified.

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On October 22, 2010, DLA Troop Support executed a class waiver to include provisions in the solicitation that are inconsistent with customary commercial practice. Agency Report (AR), Tab 11, Class Waiver. This waiver was signed by the contracting officer and approved by the Director of Subsistence Supplier Operations. Among other things, the waiver justified modifications to commercial practices involving economic price adjustments; rebates, discounts, and other price-related items; unilateral changes to the contract; and most favored customer warranties. Id.

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The waiver here identified several terms that are inconsistent with commercial practice, including (among others): (1) the inclusion of a tailored economic price adjustment provision, (2) modifications to rebate, discounts, and other price-related provisions,3 and (3) the inclusion of a unilateral changes clause. AR, Tab 11, Class Waiver and Addendum. The agency explained that these deviations were necessary to insure transparency in food pricing and to prevent fraud, especially given that there had been several fraud indictments involving subsistence contracts outside the continental United States. Contracting Officer’s Supp. Statement at 1-2. In addition, the agency relied on a Department of Defense Inspector General report that found that DLA Troop Support did not provide sufficient oversight of costs of subsistence vendors in Afghanistan and recommended better contract administration of prime vendor costs. Id.

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The waiver explained that customary commercial practice usually involves bilateral changes. However, the waiver justified the inclusion of a unilateral waiver provision because the government needs the right to make unilateral changes in delivery and shipment requirements in order to be able to supply food on a daily basis to its military customers, whose needs may change over the course of the contract. Id. at 1.

A deobligation of unused funds is not a “change” to the contract’s terms and conditions — it is not prohibited by FAR 52.212-4(c), and you do not need to tailor para. (c) to have that flexibility.  

Anyone errs who asserts that FAR 52.212-4(c) prohibits unilateral modifications.

ji20874 said:

Anyone errs who asserts that FAR 52.212-4(c) prohibits unilateral modifications.

Well, I guess DAU has erred, then. Looking at the discussion of changes, DAU asserts that 52.212-4(c) permits only "supplemental agreements" which are bilateral in nature. Same assertion from the contracting academy at GA Tech. (https://contractingacademy.gatech.edu/authority-for-modifying-a-contract/).

Or did you mean to type that the clause may be tailored to permit unilateral changes if the parties agree to do so, with appropriate waiver? Because that would make sense to me.

ji20874 said:

A deobligation of unused funds is not a “change” to the contract’s terms and conditions — it is not prohibited by FAR 52.212-4(c), and you do not need to tailor para. (c) to have that flexibility.  

Anyone errs who asserts that FAR 52.212-4(c) prohibits unilateral modifications.

ji - Can you explain your statement in light 43.101 which states "“Administrative change” means a unilateral (see 43.103(b)) contract change, in writing, that does not affect the substantive rights of the parties (_e.g.,_a change in the paying office or the appropriation data)." as your statement seems inconsistent with this definition?

So you guys would assert that a modification to deobligate unused funds (such as for closeout) must be bilateral in a contract for commercial items?  I won't go there with you.

FAR 52.212-4(c) does not prohibit unilateral modifications -- rather, it prohibits unilateral changes to the contract's terms and conditions.  I can imagine a unilateral modification that is not a change to terms and conditions.

The plain text of FAR 52.212-4(c) speaks for itself -- it clearly says changes to terms and conditions, and yet people enforce it as if it says all unilateral modifications.

Carl:

Depends on what the deobligation is in contracting terms (e.g., partial termination, deductive change, administrative change), right? A mod to decrease funding without decreasing the obligation may be problematic, but it doesn't change the contractor's substantive rights. (e.g., The contractor is still entitled to what the contract states and can get it via claim.)

H2H:

Here is what 52.212-4(c) Changes, states:

"Changes in the terms and conditions of this contract may be made only by written agreement of the parties." (emphasis added)

Seems we need to identify what terms and conditions means.

Then we need to review how unilateral actions like exercising options, issuing terminations, etc. are proper in light of 52.212-4(c). If these unilateral actions are permitted, it's reasonable to believe administrative changes that don't alter the terms and conditions of the contract in ways that affect the substantive rights of the parties could also be permissible.

ji20874 said:

A deobligation of unused funds is not a “change” to the contract’s terms and conditions — it is not prohibited by FAR 52.212-4(c), and you do not need to tailor para. (c) to have that flexibility.  

Anyone errs who asserts that FAR 52.212-4(c) prohibits unilateral modifications.

ji20874 said:

FAR 52.212-4(c) does not prohibit unilateral modifications -- rather, it prohibits unilateral changes to the contract's terms and conditions.  I can imagine a unilateral modification that is not a change to terms and conditions.

Your use of  "change" with "modification" is confusing and misinterprets my question.  Think about it!  No where did I provide that a unilateral modification was prohibited by an untailored 52.212-4 paragraph (c).  Other clauses (as noted by Jamaal) allow unilateral rights to change a contract within its scope. Your initial statement and subsequent confusion of stating "modification" are too general in my view.  We are talking about a "change" of which pursuant to the FAR there are three (43.103).

The one that is paramount to this discussion thread is one category of a unilateral modification a "administrative change" stated as one that does not go to substance of the contract. Administrative changes may well be okay but the OP has presented examples that in my view go to substance.  Deobligations of excess funds due to unutilized work presents many questions in my view most specific "unutilized" in who's view not to mention what type of contract and the funds unutilized as related to?   As to "forward-priced "change orders" for the commercial item already procured under the contract" there is no such authority for a change order under 52.212-4 (c) if not tailored.   You just can't get there unless you tailor the whole of t paragraph (c) to allow change orders in the first place.  In both these cases I would offer that each is essential to the sufficiency and validity of the contract. 

If the OP said something like a contract action to correct a fund code or the paying office I might be on board but if I were a contractor and you started taking money out of the contract or did a  forward priced change order without my input you are messing with the substance of my contract.

In the end it is my belief that absent a process as noted by napolik the OP's intentions are mis-placed and could cause unintended complications.   Do it the easy way, send the dang modification to the contractor and ask them to sign it.  If they do then done deal if they do not and state a reason for not signing then you are on the track to find out why the contractor thinks its of "substance".   Remember just because government thinks it is not substantive, does not mean the contractor agrees.

On 12/15/2018 at 8:39 PM, Jamaal Valentine said:

Then we need to review how unilateral actions like exercising options, issuing terminations, etc. are proper in light of 52.212-4(c). If these unilateral actions are permitted, it's reasonable to believe administrative changes that don't alter the terms and conditions of the contract in ways that affect the substantive rights of the parties are also permissible.

Jamaal, I don’t think that’s the right discussion to have.  Are options and terminations governed by 52.212-4(c)?

On 12/15/2018 at 8:39 PM, Jamaal Valentine said:

Seems we need to identify what terms and conditions means.

A fairly simple example should the clause itself:  52.212-4 - Contract Terms and Conditions - Commercial Items

Matthew Fleharty said:

Jamaal, I don’t think that’s the right discussion to have.  Are options and terminations governed by 52.212-4(c)?

You may be right, but I think it's worthwhile for the reasons stated: it encourages us to realize there is more than just the plain meaning of 52.212-4(c). Read plainly, "[c]hanges in the terms and conditions of [a] contract may be made only by written agreement of the parties."

It's not clear if everyone agrees that unilateral actions are permitted in commercial contracts. I used options and terminations because most people agree they can be used unilaterally and how that contrasts with the plain language of 52.212-4(c); thus, suggesting there is more to it.

Now, options need not be limited to the option clauses in FAR … if an option is governed by 52.212-4(c) is fact dependent (e.g., tailoring). Standard terminations are not governed by 52.212-4(c) but, see also FAR 49.002(c) ... and when should a removal of contract requirements be treated as a partial termination and when should it be treated as a deductive change under 52.212-4(c)? Even if we label it wrong it can be deemed something else by another authority (e.g., deductive change converted to partial termination)...

Sunstrider said:

A fairly simple example should the clause itself:  52.212-4 - Contract Terms and Conditions - Commercial Items

What is a term? What is a condition?

@Jamaal Valentine don’t escalate your commitment on this one.  The two examples you provide don’t work and I have no idea what you may think fits into “etc.”  Absent another example this discussion is only going to get more confusing and send readers down the wrong rabbit hole.  

A fundamental principle concerning options is that they are exercised in strict accordance with the terms and conditions of the contract (so no changes and, therefore, no applicability of 52.212-4(c)).  I have no idea what you’re talking about when you mention options governed by 52.212-4(c) via tailoring, but if you have an example you should provide it...

As for terminations, your last point is merely that people may disagree as to whether an action is a partial termination (governed by it’s own respective authority, not 52.212-4(c)) or a change (governed by 52.212-4(c)).  I don’t see how that adds substantively to the discussion and I think trying to conflate the two will only serve to confuse people.

Anchoring is a powerful bias, but you must fight it.

@Matthew Fleharty, your point, if any, is unclear. 

Matthew Fleharty said:

The two examples you provide don’t work and I have no idea what you may think fits into “etc.”

Don't work for what? In what ways? (Also, I couldn't find what "etc." you were referring to … maybe etc. includes disputes pursuant to FAR 32.211 and the disputes clause?)

I am not sure why you are limiting your thinking about options. Anchoring is powerful, but so is personal incredulity.

First, I don't think that you accurately described a fundamental principle concerning options.

Matthew Fleharty said:

A fundamental principle concerning options is that they are exercised in strict accordance with the terms and conditions of the contract (so no changes and, therefore, no applicability of 52.212-4(c)).

What you described is a fundamental principle of exercising options. More importantly, your assertion is inconsistent with FAR 43.103( b )(3).

Exercising an option involves a party unilaterally making a change. Remember, an option is an unaccepted offer until exercised; its terms are not part of the existing contract. When exercised, it changes the terms of the contract in accordance with the terms of the offer (option).

Again, in addition to the standard options contemplated under FAR 17.2, the parties can write an option to add or delete a clause, change a specification or statement or work, or change the contract in myriad other ways. Tailoring is by addenda to 52.212-4 for commercial contracts.

Regarding terminations, I am not conflating anything. I expressly stated that "I used options and terminations because most people agree they can be used unilaterally and how that contrasts with the plain language of 52.212-4(c)." I am not sure why that is unclear to you. You quoted the relevant part five posts ago.

Within FAR Part 49, Terminations of Contracts, FAR 49.002(c), which offers guidance for commercial terminations states "[t]he contracting officer may use this part in determining an equitable adjustment resulting from a modification under the Changes clause of any contract…"

I think you are overcomplicating it: some people seem to think 52.212-4(c) requires that all changes be bilateral … unilateral options and terminations are simple examples that refute that theory.

If you think I err, point it out and provide your rationale and supporting evidence for consideration/discussion.

Exercising Options (in strict accordance with the terms of the option) and TFC  (separately authorized) aren’t “changes in the terms and conditions of [the] contract”.  They are already terms and conditions of the contract that provide for a change in the contract price and/or time. 

I will suggest that de-obligating excess funds for work not (to be ) performed - where separately identifiable from work to be performed - can be simply accomplished by notifying the contractor of the government’s intention, asking for prompt verification that they won’t be required to complete the contract and/or to explain why it would be necessary to retain them.  

The above course of action would seem to be applicable where the funds are associated with unit priced items for a variable quantity of goods or services. Not applicable for non-segregable goods or services. Thus, there is no change in the terms and conditions of the contract. 

Acknowledge your contractor’s verication and advise/confirm that you are issuing an admin mod to de-obligate the excess funds. 

If communicating orally by telephone or in person, acknowledge and memorialize the conversation in writing, electronically.  

COMMUNICATE WITH YOUR CONTRACTOR for crying out loud! 

If electronic contracting is the current mode of contract administration, how hard can that be? 

And if you are convinced that an admin change won’t affext the rights and responsibilities of the parties, it ought to be simple - and is a responsible thing to do as a courtesy if nothing else - to verify and advise the other party what you want to do.

A primary distinction in simplified acquisitions for commercial items, as implemented using the Part 12 procedures, was that the customer (government) couldn’t unilaterally order changes to the contract that would alter the agreed terms and conditions. 

I think that government buyers should understand and follow that principle. As  a general idea, don’t buy stuff that way if it will involve changes to the agreement that you want to be able to unilaterally direct. 

If you or I buy something for ourselves or for our private organizations and later determine needs to be changed, we go back and work with the supplier, retailer or business to best accommodate the end purpose of the purchase.

joel hoffman said:

Exercising Options (in strict accordance with the terms of the option) and TFC  (separately authorized) aren’t “changes in the terms and conditions of [the] contract”.  They are already terms and conditions of the contract that provide for a change in the contract price and/or time.

I understand that to be a common belief, albeit inconsistent with FAR 43.103(b):

"…Unilateral modifications are used, for example, to -- (1) Make administrative changes; (2) Issue change orders; (3) Make changes authorized by clauses other than a changes clause (e.g., Property clause, Options clause, or Suspension of Work clause); and (4) Issue termination notices."

Surely a termination changes the terms and conditions of the contract in ways that affect the substantive rights of the parties. Look at FAR 12.403 and the various definitions in FAR 2.101 such as "terminated portion of the contract", "termination for convenience", "partial termination", etc.

joel hoffman said:

A primary distinction in simplified acquisitions for commercial items, as implemented using the Part 12 procedures, was that the customer (government) couldn’t unilaterally order changes to the contract that would alter the agreed terms and conditions.

I believe this was an attempt to follow the UCC for goods (supplies); UCC doesn't apply to services including construction.

Jamaal Valentine said:

I believe this was an attempt to follow the UCC for goods (supplies); UCC doesn't apply to services including construction.

And Part 12 generally isn't appropriate for construction "as a commercial item". 

I did discover recently that the house that the members of our hunting camp stay at in a small town in South Alabama was ordered from a Sears Catalog in 1903.  It is built above ground on brick pier foundations, so could have been located anywhere I suppose.  Didn't have electricity or indoor plumbing, originally. Sears used to advertise, as late as the 1960-1970's that "We have Everything". I guess that was true once upon a time...

Noting the below reference  with regard to what is "substantive" I find it interesting that discussion of it  lacks reference so I am back to my view that the specifics will determine if a change is substantive.   There is no broad brush view that could, in the case of a commercial item contract where 52.212-4(c) is untailored, provide that there is bunch of changes you could make unilaterally. As already stated in my view one could not develop a clause to so state a broad brush view, just can not get there.   I do agree that there are other paragraphs within 52.212-4, or clauses that could be added otherwise to a commercial item contract, that allow a unilateral action by the government. 

However of interest is 43.102 (b) that seems to provide the preference of all modifications to federal government contract should be bilateral.   "(b) "Contract modifications, including changes that could be issued unilaterally, shall be priced before their execution if this can be done without adversely affecting the interest of the Government. If a significant cost increase could result from a contract modification and time does not permit negotiation of a price, at least a ceiling price shall be negotiated unless impractical."

https://www.jagcnet.army.mil/Sites%5C%5Ccontractandfiscallaw.nsf/0/0F15E358416D4CD285257E89005365F4/%24File/2015%20CAD.Reader%20Extended.pdf

Page21-4

1. Administrative. These unilateral changes are made in writing by the

contracting officer, and do not affect the substantive rights of the parties.

FAR 43.101. These include:

a. Changes to appropriations data (to update for new fiscal years,

etc.);

b. Changing points of contact or telephone numbers.

2. Substantive. These changes alter the terms and conditions of the contract

in ways that affect the substantive rights of the parties by adding, deleting,

or changing the work required and/or compensation authorized under the

contract. These may be made unilaterally (for changes authorized by a

changes clause) or bilaterally (with agreement between the two parties).

Jamaal Valentine said:

I am not sure why you are limiting your thinking about options. Anchoring is powerful, but so is personal incredulity.

Since you asked, this is certainly one area where you erred @Jamaal Valentine.  I wish you well thinking about this issue, but I'm through here.

Matthew Fleharty said:

Since you asked, this is certainly one area where you erred @Jamaal Valentine.  I wish you well thinking about this issue, but I'm through here.

I asked you to provide your rationale and supporting evidence for consideration/discussion. You opted to reply by cryptically emphasizing 'personal incredulity' without much else. I hope you aren't suggesting that personal incredulity isn't powerful.

Nonetheless, if you change your mind and you'd like to discuss it, you know how to get in touch with me … I'm about done here and continuing would likely only result in repeating myself since you haven't refuted my supported points with any reliable evidence of your own.

Catch ya on the next thread!

Jamaal Valentine said:

I understand that to be a common belief, albeit inconsistent with FAR 43.103(b):

"…Unilateral modifications are used, for example, to -- (1) Make administrative changes; (2) Issue change orders; (3) Make changes authorized by clauses other than a changes clause (e.g., Property clause, Options clause, or Suspension of Work clause); and (4) Issue termination notices."

Surely a termination changes the terms and conditions of the contract in ways that affect the substantive rights of the parties. Look at FAR 12.403 and the various definitions in FAR 2.101 such as "terminated portion of the contract", "termination for convenience", "partial termination", etc.

T for C and T for D procedures are prescribed in 52.212-4 (l). This is a unilateral right.  Good discussion in “Administration of Government Contracts” by Nash and (Cibinic or successor contributors). I have the Fourth edition. 

Note also, as mentioned in the above mentioned reference, “ [t]he [TFC] clause is one of the most unique provisions contained in government contracts. In no other area of contract law has one party been given such complete authority to escape from contractual obligations.... “

There is no conflict within the paragraphs in 52.212-4.  

See for example, an ASBCA Appeal and the Appellant’s Request for Reconsideration : 

 http://www.asbca.mil/Decisions/2005/53910.pdf

and 

http://www.asbca.mil/Decisions/2004/53910.pdf

as for conflicts between Part 12 and Part 43, see 12.102 (c)

“Contracts for the acquisition of commercial items are subject to the policies in other parts of the FAR. When a policy in another part of the FAR is inconsistent with a policy in this part, this part 12 shall take precedence for the acquisition of commercial items.”

One must also realize that Part 43 was generally written before the commercial acquisition procedures were added to FAR.

On 12/15/2018 at 5:24 PM, ji20874 said:

FAR 52.212-4(c) does not prohibit unilateral modifications -- rather, it prohibits unilateral changes to the contract's terms and conditions.  I can imagine a unilateral modification that is not a change to terms and conditions.

To evaluate that assertion, we need to know what you mean by "terms and conditions".

joel hoffman said:

A primary distinction in simplified acquisitions for commercial items, as implemented using the Part 12 procedures, was that the customer (government) couldn’t unilaterally order changes to the contract that would alter the agreed terms and conditions. 

I think that government buyers should understand and follow that principle. As  a general idea, don’t buy stuff that way if it will involve changes to the agreement that you want to be able to unilaterally direct. 

If you or I buy something for ourselves or for our private organizations and later determine needs to be changed, we go back and work with the supplier, retailer or business to best accommodate the end purpose of the purchase.

I would also offer that in commercial contracting, the vast majority of the time those terms and conditions are agreed upon up front. There is definitely no unrestricted power to issue the change now, then close the deal later.

With that in mind, assuming my personal assertion made in the OP is correct, then we are talking about negotiating/incorporating initially agreed upon circumstances in which the Government can unilaterally change commercial T&Cs, and only when such unilateral changes are already consistent with commercial industry practices within a particular market. Doesn't seem like unrestricted power to me, and there will have been clear agreement up front... Either way, I'm not the expert here and remain open-minded.

Sunstrider said:

With that in mind, assuming my personal assertion made in the OP is correct, then we are talking about negotiating/incorporating initially agreed upon circumstances in which the Government can unilaterally change commercial T&Cs, and only when such unilateral changes are already consistent with commercial industry practices within a particular market.

Well I think you almost get it but the above statement is confusing.  I do not believe you are discussing unilaterally changing "T&C's" a right not even contained in any FAR 52.243-XX clauses by my read.    I believe you are wanting some limited unilateral rights.  Or, in other words you do not want the right to say unilaterally remove any thing from the contract you want to but rather you want to right to deobligate excess funds due to unutilized work or forward-priced "change orders" for the commercial item already procured under the contract?  And if yes, am I reading correctly that if such a unilateral right is placed in the contract  you would also provide the right of the contractor to "close the deal" later or in other words that the contractor would retain rights like the ability of requesting a equitable adjustment?

C Culham said:

Well I think you almost get it but the above statement is confusing.  I do not believe you are discussing unilaterally changing "T&C's" a right not even contained in any FAR 52.243-XX clauses by my read.    I believe you are wanting some limited unilateral rights.  Or, in other words you do not want the right to say unilaterally remove any thing from the contract you want to but rather you want to right to deobligate excess funds due to unutilized work or forward-priced "change orders" for the commercial item already procured under the contract?  And if yes, am I reading correctly that if such a unilateral right is placed in the contract  you would also provide the right of the contractor to "close the deal" later or in other words that the contractor would retain rights like the ability of requesting a equitable adjustment?

Yes to both questions. I do think that, considering an intended benefit of commercial contracting is increased efficiency in administration, inflexibly requiring supplemental agreement on every single contract modification is a bit impractical. I am definitely looking to learn of ways to responsibly issue unilateral mods to commercial contracts (for such circumstances I originally stated) and thereby expand my toolbox.

Sunstrider said:

Yes to both questions. I do think that, considering an intended benefit of commercial contracting is increased efficiency in administration, inflexibly requiring supplemental agreement on every single contract modification is a bit impractical. I am definitely looking to learn of ways to responsibly issue unilateral mods to commercial contracts (for such circumstances I originally stated) and thereby expand my toolbox.

As I explained above, it is a relatively simple process to COMMUNICATE with your contractor (orally or by simple written methods)  your intent to de-obligate excess funding for severable unit-priced work/products with estimated quantities not to be provided. Follow up in writing and transmitting  your confirmation that they understand that it doesn't impact them. Then issue the admin mod.

i would find it problematic to write into such a contract a term that would allow you to issue unilateral modifications for change orders to commercial items being purchased.  I apparently don't understand exactly what you mean by "or forward-priced change orders for the commercial item already procured under the contract." Were you referring to admin funding mods or to the change order mod itself?

EDIT: To my knowledge, according to DoD's Standard Procurement System or the Army's predecessor  system , one cant actually adjust the contract price to reflect actual quantities of unit-priced quantities purchased via an admin mod,  where the line item price was based upon estimated quantities. Our organization used to adjust quantities and associated contract price administratively before then.

We were told to issue those mods, citing the VEQ clause, which was flat out wrong.  The VEQ clause doesn't authorize any adjustment in the estimated quantity or in the contract price to reflect actual quantities.  That clause merely provided for an equitable adjustment of prices if an overrun or underrun affected the contractor's cost per unit and/or authorized a time adjustment if it affected the contract period. 

Technically, the Changes clause would have probably been the operative clause.to adjust line item quantities and resulting contract price/funding. Technically, that could have been done unilaterally as a definitized change order in a non-commercial item contract format.

Quote

Question -

 1. If a buyer has tailored the language in 52.212-4(c ) so that unilateral changes are permitted and they have a minor address change which necessitates doing an administrative mod should they: a) Fill out Block 13(B) on the SF 30 which is an administrative mod? This block sites 43.103(b) as the authority. This reference defines unilateral mods. OR b) Fill out Block 13(D) and site 52.212-4( c), the Changes Clause for commercial contracts, as the authority? 2. I had been advised that FAR 43 does not cover commercial contracts. Is this correct? It seems to me that FAR 43 does not differentiate between commercial and non-commercial acquisitons and, thus commercial contracts can be covered by FAR 43. That being said, is it incorrect to check block 13(B) or is checking 13(D) and zeroing in on the appropriate authority for the commercial contract just more accurate? Is either choice acceptable?

 Scenario - I am trying to obtain the proper modification authority for an administration mod to a commercial contract. I have been advised that FAR 43 does not cover FAR 12 acquisitions, but I question the accuracy of this. This led me to the below questions.

 A:  To answer both Qs 1 and 2, since you are talking about modifying a commercial contract then you will be referencing 52.212-4.  This clause calls for all modifications to be bilateral (as stated in the clause part (c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties). You make mention in your question that you tailored the language in your contract to allow for administrative modifications to be unilateral.  If this is the case, then proceed.

https://www.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=3&cgiQuestionID=109722

Perhaps the professor errs?  It is a very common mistake to aver that para. (c) of FAR 52.212-4 requires all modifications of a commercial item contract to be bilateral.  But those who will read the actual clause text, and accept the text as written, will discern that the clause only requires that changes to the contract’s terms and conditions have the agreement of both parties.  But don’t just take my word for it, please look for yourself!

As Don and maybe others have asked, what is meant by "terms and conditions"?  No one has attempted to answer that fundamental question.  For example, are blocks 15, 16, 17a and 18a of the SF 1449 terms or conditions of the contract?

ji20874 said:

Perhaps the professor errs?  It is a very common mistake to aver that para. (c) of FAR 52.212-4 requires all modifications of a commercial item contract to be bilateral.  But those who will read the actual clause text, and accept the text as written, will discern that the clause only requires that changes to the contract’s terms and conditions have the agreement of both parties.  But don’t just take my word for it, please look for yourself!

Other than administrative changes and unilateral changes expressly permitted by a contract clause, what do you think a CO can unilaterally modify in a commercial contract?

Retreadfed said:

As Don and maybe others have asked, what is meant by "terms and conditions"?  No one has attempted to answer that fundamental question.  For example, are blocks 15, 16, 17a and 18a of the SF 1449 terms or conditions of the contract?

From the Fourth Edition of the Government Contracts Reference Book: 

Quote

TERMS AND CONDITIONS  All the provisions of a contract. FAR 14.201-1 and FAR 15.204-1 require that the terms and conditions follow the UNIFORM CONTRACT FORMAT, with exceptions listed in FAR 14.201-1(a) and FAR 15.204. Standard terms and conditions are set forth in FAR Part 52.

napolik said:

All the provisions of a contract

Does that mean that every word, number and symbol in a contract is a term or condition of the contract?

Per Black's Law Dictionary: provision. 1. A clause in a statute, contract, or other legal instrument. 2. A stipulation made beforehand. See PROVISO.

proviso: 1. A limitation, condition or stipulation upon whose compliance a legal or formal document's validity or application may depend.

@Retreadfed, I don't think so. Black's Law Dictionary contains the following entry for "term":

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A contractual stipulation <the delivery term provided for shipment within 30 days>.

And the following entry for "condition":

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Loosely, a term, provision, or clause in a contract.

“This term condition is generally used to describe any fact, subsequent to the formation of a contract, which operates to make the duty of a promisor immediately active and compelling. Such a fact may be described as such in a term of the contract or it may not. In either event, the term of the contract should not itself be called the condition. … It is not uncommon, popularly, to speak of a condition of the contract as synonymous with term or provision of the contract. This should be avoided.” William R. Anson, Principles of the Law of Contract 226 n.1 (Arthur L. Corbin ed., 3d Am. ed. 1919).

“The word ‘condition’ is used in the law of property as well as in the law of contract and it is sometimes used in a very loose sense as synonymous with ‘term,’ ‘provision,’ or ‘clause.’ In such a sense it performs no useful service.” Id. at 409.

So, if I understand correctly, the following sentence includes both a term and a condition:

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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.

The condition is the increase or decrease in the cost of, or time required for, performance of the contract. The term is the requirement to equitably adjust the contract. Perhaps a lawyer can check my understanding.

I don't think that everything in a contract would be a "term" or "condition". For example, page numbers, requisition numbers, instructions to the payment office, are informational in my view.

I don't think the dollar figure cited at the end of a line of accounting is a term. I think the purpose of that number is to communicate the amount of the obligation created to the agency accounting office. Unless the figure were erroneous, I don't know how a change in the amount of the obligation would not also be accompanied by a change in the contract terms.

Don Mansfield said:

Other than administrative changes and unilateral changes expressly permitted by a contract clause, what do you think a CO can unilaterally modify in a commercial contract?

Don,

If you will agree that a contracting officer may make “administrative changes and unilateral changes expressly permitted by a contract clause” in a contract for commercial items, then we are in agreement because this belies the common error that all modifications must be bilateral.

ji20874 said:

If you will agree that a contracting officer may make “administrative changes and unilateral changes expressly permitted by a contract clause” in a contract for commercial items, then we are in agreement because this belies the common error that all modifications must be bilateral.

 A:  To answer both Qs 1 and 2, since you are talking about modifying a commercial contract then you will be referencing 52.212-4.  This clause calls for all modifications to be bilateral (as stated in the clause part (c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties). You make mention in your question that you tailored the language in your contract to allow for administrative modifications to be unilateral.  If this is the case, then proceed.