186:(1984) ; Environmental Protection Agency, 49 Fed. Reg. 8834 (1984) ; Federal Emergency Management Agency, 49 Fed. Reg. 12,646 (1984) ; General Services Administration, 49 Fed. Reg. 10,792 (1984) ; Department of Health and Human Services, 48 C.F.R. ch. 3; Department of Housing and Urban Development, 49 Fed. Reg. 8258 (1984) ; National Aeronautics and Space Administration, 49 Fed. Reg. 12,370 (1984) ; National Science Foundation, 48 C.F.R. ch. 25; Department of Transportation, 48 C.F.R. ch. 12; and Veterans Administration, 48 C.F.R. ch. 8.
77:(hereinafter referred to as "FAR"), which are contained in Chapter 1 of Title 48 of the Code of Federal Regulations, and agency regulations supplementing or implementing the FAR. Generally the FAR apply to contract solicitations issued on or after April 1, 1984. Earlier contracts are governed by the prior agency regulations. The principal prior regulations were the Defense Acquisition Regulations and the Federal Procurement Regulations.
48:
adjustment equal to or within the
Government Estimate. In such cases the modification containing the adjustment in price and/or time price contained in the Government Estimate may be issued unilaterally, with or without a Contracting Officer's Final Decision. Unilateral modifications are also used to make administrative changes and to issue termination notices.
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equitable adjustment is to place the contractor in the position he or she would have been in had the change not been encountered. The adjustment should not alter the contractor's profit or loss position from what it was before the change occurred. As mutually agreed by the government and contractor.
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give the government the power unilaterally to order contractual modifications; in return, the contract specifies that if the parties are unable to agree on compensation to be received by the contractor for the modified work, the contractor shall be entitled to an equitable adjustment. The goal of an
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J.F. Shea Co. v. United States, 10 Cl. Ct. 620 (1986) . Where a contract was bid in a lump sum, the equitable adjustment for substitution of work is computed by the following formula: (1) Adjusted contract price; (2) Less projected cost without changed conditions; (3) Plus actual cost under changed
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The ultimate goal of an equitable adjustment is to do equity; to achieve equity, the government contractor seeking an equitable adjustment bears the "essential burden of establishing the fundamental facts of liability, causation, and resultant injury." It must show that the increased costs arose
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A "bilateral modification" is a supplemental agreement on which the
Contracting Officer and the contractor have agreed to a price and/or time adjustment. Contrast a "unilateral modification," a modification on which the Contracting Officer and the contractor cannot agree to a price and/or time
32:, to compensate the contractor expense incurred due to actions of the Government or to compensate the Government for contract reductions. An equitable adjustment includes an allowance for profit; clauses that provide for adjustments, excluding profit, are not considered "equitable adjustments."
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Agency regulations implementing the FAR are as follows: Agency for
International Development (AID), 49 Fed. Reg. 13,236 (1984) ; Department of Commerce, 49 Fed. Reg. 12,956 (1984) ; Department of Defense, 49 Fed. Reg. 11,302 (1984) ; Department of Energy, 49 Fed. Reg. 11,922
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An equitable adjustment is determined by whether the work was foreseeable based on the information before the contractor at the time of the contract. "Foreseeability" in this instance refers to work that reasonably could be anticipated based on the contemplation of the parties. The question is
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does not prevent modifications to a contract if the modifications are not outside the scope of the original contract); Birch & Davis Int'l, Inc. v. Christopher, 4 F.3d 970 (Fed. Cir. 1993) (CICA and FAR preclude the elimination of a bidder as not in competitive range if such bidder has a
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41 U.S.C. §§ 601-613. See also In re
Liberty Constr., 9 F.3d 800 (9th Cir. 1993) (the federal district courts have subject matter jurisdiction in suits against the SBA, even after the passage of the Contract Disputes Act, because the SBA's "sue and be sued" provision independently confers
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whether the work would be a foreseeable consequence of those matters the parties "considered with continued attention," regarded thoughtfully, or "viewed . . . as probable or as an . . . intention."See
Webster's New International Dictionary, 2d ed. 574 (1955).
255:"reasonable chance" that it will be selected); Rapides Regional Medical Ctr. v. Secretary, 974 F.2d 565 (5th Cir. 1992) (defining "procurement" as the term applies to the CICA).
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See Johns-Manville v. United States, 12 Cl. Ct. 1, 33 (1987); Sterling
Millwrights v. United States, 26 Cl. Ct. 49, 72 (1992); Mojave Enterprises, 3 Cl. Ct. at 357.
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from work which was materially different from that contemplated by the parties. The increased costs must be the direct and necessary result of the changes.
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A "price adjustment" is a change to the established price of the contract arrived at by mutual agreement between the
Government and contractor.
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Mojave
Enterprises v. United States 3 Cl. Ct. 353, 357 (1983); Miller Elevator Co., Inc. v. United States 30 Fed. Cl. 662, 678 (1994).
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An "adjustment in estimated quantities" is a contract adjustment pursuant to the contract clause on variation in estimated quantities.
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conditions; (4) Plus reasonable profit/overhead computed in accordance with governing regulations on difference between 2 and 3.
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of 1982 established new procedures and remedies for the resolution of disputes between the government and contractors. The
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Equitable adjustments are determined by federal agencies. The cornerstone of the regulatory scheme is the
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To paraphrase Ralph L. Jones Co. v. United States, 33 Fed. Cl. 327, 331-332 (Fed. Cl. 1995):
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See AT&T Communications, Inc. v. Wiltel, Inc., 1 F.3d 1201 (Fed. Cir. 1993) (The
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Wunderlich
Contracting Co. v. United States, 351 F.2d 956, 968-969 (Ct. Cl. 1965)
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General
Dynamics Corp. v. United States. 218 Ct. Cl. 40, 56, 585 F.2d 457 (1978).
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Johns-Manville v. United States, 12 Cl. Ct. 1, 33 (1987) (citations omitted).
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There have been several major legislative changes over the years. The
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In a "changes clause" in government construction contracts
92:of 1984 (CICA) encourages competitive government
232:Pub. L. No. 97-164, 96 Stat. 25 (Apr. 2, 1982).
176:The FAR were published at 48 Fed. Reg. 42,102
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136:Military glossary (in the public domain)
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71:Federal Acquisition Regulations System
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90:Competition in Contracting Act
86:Federal Courts Improvement Act
75:Federal Acquisition Regulation
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167:4-15 Construction Law P 15.03
148:4-15 Construction Law P 15.03
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241:41 U.S.C. §§ 251 and 253.
100:Requirement of causation
321:Government procurement
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16:An
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