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  • Question

    Is it acceptable to accomplish bilateral , supplemental agreements after the CCD or ultimate CCD have passed without granting time extensions to the contract?


    Answer

    We assume that the authority for the changes you describe most likely is occurring under the Changes Clause where the Government initiated a unilateral change order to the construction project and there has not been a resolution prior to the contract completion date or there was a claim by the contractor that has not been negotiated and resolved prior to the contract completion date.  Based on these types of circumstances, it would be valid to be completing bilateral modifications after the contract completion date.

     

    The following definitions and clause excerpts are offered for a basis of understanding:

     

    Contract - an agreement, enforceable by law, to do something for legal consideration. It obligates the seller to furnish supplies or services (including construction) and for the buyer to pay for them. (See FAR 2.101 definition.) The extent of the legal obligation of the parties, including the performance period, is defined by the terms of the contract.

     

    Contract modification - any written change in the terms of the contract. The modification may be either unilateral or bilateral. A bilateral modification is a contract modification negotiated and signed by both the contractor and the contracting officer.

     

    Change order - a unilateral contract modification made by the Government as permitted by the Changes Clause of the contract. FAR 52.243-4 is the Changes clause that applies to fixed-price construction contracts.

     

    Changes Clause FAR 52.243-4(d): "If any change under this clause causes an increase or decrease in the Contractor's cost of, or the time required for, the performance of any part of the work under this contract, whether or not changed by any such order, the Contracting Officer shall make an equitable adjustment and modify the contract in writing."

     

    Changes Clause FAR 52.243-4 (f): “No proposal by the Contractor for an equitable adjustment shall be allowed if asserted after final payment under this contract.”

     

    FAR 52.211-13 Time Extensions (Sept 2000): "Time extensions for contract changes will depend upon the extent, if any, by which the changes cause delay in the completion of the various elements of construction. The change order granting the time extension may provide that the contract completion date will be extended only for those specific elements related to the changed work and that the remaining contract completion dates for all other portions of the work will not be altered. The change order also may provide an equitable readjustment of liquidated damages under the new completion schedule."

    Summary:

     Based on the Changes clause for construction FAR 52.243-4(d), the contractor has up to the time of final payment to submit a request for equitable adjustment. The contractor could provide a proposal which includes time and cost, among other elements. The contracting officer would have the authority to negotiate the required changes. Per FAR 52.211-13, a contract extension in response to a change order may stipulate that the extension applies only to the changed work. In such case, liquidated damages may still be applied to unchanged work IAW the contract's liquidated damages clause. If the changed work was subject to liquidated damages, FAR 52.211-13 also allows "equitable readjustment of the liquidated damages under the new completion schedule." 
     
              Once a contract truly expires such that the obligations of both parties have ended, the contract cannot be extended unless the parties bilaterally agree to extend the contract, nor can the Government unilaterally issue a change order.

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