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    I see that 52.243.3 can be bilateral or unilateral. When is 52.243-3 bilateral and when is unilateral?


    Answer

    You asked when you can use FAR 52.243-3, Changes – Time and Material (T&M) or Labor Hours (LH) as a bilateral modification and when is it used for a unilateral modification.  Your answer is in the clause and in FAR 43.103.
     

    FAR 52.243-3 (a) gives a list of reasons when you can unilaterally tell a contractor, using this clause as your authority, to make a change to a T&M or LH contract
    .

     (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:
    (1) Description of services to be performed.
    (2) Time of performance (i.e., hours of the day, days of the week, etc.).
    (3) Place of performance of the services.
    (4) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.
    (5) Method of shipment or packing of supplies.
    (6) Place of delivery.
    (7) Amount of Government-furnished property.
     
    FAR 43.103, Types of Contract Modifications, further explains that the unilateral modification can made in a few circumstances, although the one you are addressing in your AAP question is “(b)(2) Issue change orders”. 
     
    43.103 -- Types of Contract Modifications.
     (b) Unilateral. A unilateral modification is a contract modification that is signed only by the contracting officer. 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.
     
    When you change a contracts description of services to be performed, time of performance, etc, it will likely cause a change to the cost and schedule of the contract.  The Government and the Contractor will definitize the change order with a bilateral agreement that clarifies the equitable adjustment to the contract.  The Government and the Contractor generally do not want to go to court in a “dispute.  Rather we prefer to agree to the equitable adjustment using negotiations and a bilateral modification. FAR clause 52.243-3 (b) – (d)  explains the requirement for the Government and Contractor to agree on an equitable adjustment:  
     
     (b) If any change causes an increase or decrease in any hourly rate, the ceiling price, or the time required for performance of any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer will make an equitable adjustment in any one or more of the following and will modify the contract accordingly:
    (1) Ceiling price.
    (2) Hourly rates.
    (3) Delivery schedule.
    (4) Other affected terms.
    (c) The Contractor shall assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract.
    (d) Failure to agree to any adjustment will be a dispute under the Disputes clause. However, nothing in this clause excuses the Contractor from proceeding with the contract as changed.
    (End of clause)


    FAR 43.103 (a) (1), Types of Contract Modifications, further explains that a bilateral modification (usually called a supplemental agreement) will be used to make the equitable adjustment.
    43.103 -- Types of Contract Modifications.


    Contract modifications are of the following types:
    (a) Bilateral. A bilateral modification (supplemental agreement) is a contract modification that is signed by the contractor and the contracting officer. Bilateral modifications are used to --
    (1) Make negotiated equitable adjustments resulting from the issuance of a change order;
    (2) Definitize letter contracts; and
    (3) Reflect other agreements of the parties modifying the terms of contracts.
     

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