Changes Claims and Disputes

What is a “change”?
A change is anything you are asked to do or provide which differs from the strict requirements of your contract.

Am I entitled to be paid for changes?
Yes. You may also be entitled to additional time to perform your contract.

What do I do if the Contracting Officer or the Contracting Officer’s Technical Representative (COTR) tells me that the “change” the Government wants is actually a contract requirement which I overlooked in my bid or proposal?
Ask the COTR to show you the specific provision in the contract document (contract terms, drawings, specifications, packing/shipping instructions) that has the requirement. If you cannot find the requirement or it is unclear as to what the requirement is, the contract is either ambiguous or defective. If the requirement is completely absent from the contract, then what the Government is demanding likely constitutes a change.

If the COTR cannot show you the requirement, or if the requirement is ambiguous, insist on a written directive to do the work. Under the changes and disputes clause, the Contracting Officer can require a company to perform disputed work. However, receiving written direction is the first step in the equitable adjustment process in this situation. If you do not have a written instruction to perform the work, you may not be able to make a claim for the work. There are no “oral” changes to government contracts.

If the contract contains a defect, am I required to do the work requests?
It depends on the type of defect.

Defects generally fall into one of two groups; latent and patent.

A patent defect is one that is obvious, i.e. a reasonable bidder should have noticed the defect or ambiguity in preparing its bid or proposal. If it is a patent defect you are not entitled to additional time or money to do the required work.

A latent defect is the opposite of a patent defect, i.e. a reasonable bidder would not have noticed the defect in preparing its bid or proposal. If it is a latent defect, you are entitled to additional time and money to perform the requested work.

What if we cannot reach an agreement on the type of defect?
This is a fairly common occurrence. If the Government insists the requirement be part of the contract, ask for a written directive to perform the work.

What if the Contracting Officer refuses to issue a written directive?
Send the Contracting Officer a letter confirming the instructions, that you have asked for a written directive, that you have been told a written directive will not be issued but that you are required to do the work as provided in the oral instructions (explain what the work is), that you do not believe the work is required, and that you will perform as instructed and will be submitting a Request for an Equitable Adjustment.

Can the Contracting Officer’s Technical Representative (COTR) direct me to makes changes in my contract?
No. The only person that can require you to perform changes to your contract is the Contracting Officer responsible for the contract. In many cases, the Contracting Officer that awarded the contract, generally known as the Procuring Contracting Officer (PCO) is not the same person responsible once you start performance. The Contracting Officer that oversees performance is typically called the Administrative Contracting Officer (ACO). Please note that various Agencies may use different names for these positions.

What is the difference between a Request for an Equitable Adjustment (REA) and a Claim?
A Request for Equitable Adjustment (REA) is a request by the contractor for an adjustment in the contract price or time to perform the contract for which there is a dispute at the time the REA is submitted. There is no specific time limit for a Contracting Officer to respond to an REA. The Government does not pay interest on an REA.

A Claim is a demand for payment of a specific amount of money and/or additional time to perform the contract that is disputed by the Agency. Interest on a claim generally starts the date the claim is received by the Contracting Officer.

The Contracting Officer is required to issue his/her decision on a claim under $100,000.00 within sixty (60) days of receiving a written request for a decision or within a “reasonable time” if the contractor has not asked for a written decision.

For claims over $100,000.00, the Contracting Officer is required to issue a written decision within sixty (60) days or notify the contractor within that 60 day period as to the date when a decision will be issued.

If the Contracting Officer does not act within the required period the claim is “deemed denied” and the Contractor may appeal the denial to the Agency Board of Contract Appeals or the Court of Federal Claims.

If the Contracting Officer issues a final decision, the decision must include a notice as to the Contractor’s Appellate Rights. That notice will state that the Contractor has sixty (60) days to appeal to the Agency Board of Contract Appeals or the Court of Federal Claims.