There are several types of formal contract changes available under Government contracts. Some of them can be issued unilaterally by the Government but unilateral changes cannot be made for anything that affects the substantive rights of the contractor. Following is a brief description of the formal contract changes available to the Government and the contractor.
Administrative changes. Administrative changes are almost always unilateral changes and do not affect the substantive rights of the parties. Administrative changes are defined in FAR 43.101 and might include a change in the "paying office", appropriation codes, or a new telephone number for an agency point of contact. Administrative modification numbers usually begin with the letter "A".
Change orders. A change order is a unilateral, written order, signed by the contracting officer, directing the contractor to make a change that the "changes clause" authorizes, with or without consent. Examples would be exercising options, suspending work, or terminating the contract. Some change orders lead to equitable adjustments which ultimately become bilateral modifications.
Bilateral modifications. Bilateral modifications, sometimes referred to as supplemental agreements, are contract modifications signed by the contracting officer and the contractor. According to FAR 43.103(a), bilateral modifications are used for negotiating equitable adjustments that result from the issuance of a change order, definitizing a letter contract, or reflecting other agreements of the parties affecting the terms of a contract.
Administrative changes are typically benign but other type of changes can result in adverse financial impact for contractors either because expenses will increase or reduction in scope that leads to higher indirect costs on other contracts. In such cases, contractors have recourse. Contractors can submit REAs (Requests for Equitable Adjustments) or file a claim under the Contract Disputes Act.
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