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  • Question

    Does the issuance of change orders for not-to-exceed amounts for construction contracts violate the anti-deficeincy act (ADA)?


    Answer

    In response to the question, the following terms are applicable:
     
    1) Change order - is a unilateral written direction signed by the contracting officer under the authority of one of the "Changes"  clauses at FAR 52.243-1 through -6.
     
    2) Unpriced order - is an order whose firm price is not established at the time the order is issued. However, there is a monetary limitation is stated in the order (the not-to-exceed amount).
     
    3) FAR 43.105 Availability of Funds.  The contracting officer shall not execute a contract modification that causes or will cause an increase in funds without first obtaining a certificate of funds availability...
     
    Based on the information provided in the above and in the question, the contracting officer would be required to obtain funds equal to the change order not-to-exceed dollar amount prior to issuing the unilateral change order. Therefore, an Anti-Deficiency Act violation would not have occurred as a result of issuing a change order.
     

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