What is the effect of the ‘changes’ clause?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Feb 20, 2013

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Each Government contract contains a Changes clause. The Changes clause allows the Government contracting officer to make changes within the general scope of the contract. These changes generally may involve changes in the Government-furnished specifications, method of shipment or packing, place of delivery, or time of performance.

The contractor must assert its right to an “equitable adjustment” under the Changes clause within a certain time from the date that the change occurred. (An “equitable adjustment” is generally the amount required to cover the contractor’s increased (or decreased costs) plus an additional amount to account for profit.) If the Government change increases or decreases the cost of performance under the contract, the contracting officer must make an “equitable adjustment” in the contract price, delivery schedule, or both. If the contractor disagrees with the adjustment, it should submit a claim under the Contract Disputes Act. However, the contractor should continue with performance while the claim is pending.

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