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  • Question

    Can you change a firm fix price clin into a LH clin?


    Answer

    Irrespective of the question background, you can execute a bilateral modification to change a Firm Fixed Price CLIN to a Labor Hour CLIN.  In accordance with FAR 43.103 Types of Contract Modifications,  a bilateral modification (supplemental agreement) is a contract modification that is signed by the contractor and the contracting officer. In this case, a bilateral modification would "reflect other agreements of the parties modifying the terms of contracts."  FAR Part 2 defines a supplemental agreement as: "Supplemental agreement" means a contract modification that is accomplished by the mutual action of the parties.
     
    In order to demonstrate that the bilateral modification and contract changes are appropriate, the Contracting Officer must cite the legal/regulatory rationale for making the changes.  If the contracting officer believes that the contract changes are within scope then you would cite the changes clause of the contract.  If the contemplated changes are out of scope then you will require a justification and approval (J&A) to be processed per FAR 6.303 for other than full and open competition. Generally, an increase in ceiling is considered out of scope.  Therefore, the Contracting Officer would need a J&A for other than full and open competition IAW FAR 6.303 to increase the ceiling. Scope determinations are typically complicated and based predominantly on case law, so legal counsel should generally be sought in making such determinations.

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