CHANGES -- CONTRACT MODIFICATIONS

GPO Contract Terms, which is incorporated by reference into all GPO contracts, has a clause specifically dealing with changes.  Contract Clause 4 gives the contracting officer the power to make changes, after the contract is awarded, by written change order, in the following areas:  1) specifications; 2) method of shipment or packing and place of delivery.  Since the specifications include just about everything relating to the job, the CO has a broad authority to make changes.  However, one of the things he cannot do is shorten the schedule. 

Note that the right to make changes – which may originate with the agency customer – is not given to the agency customer.  Any changes made by the agency customer must be confirmed in writing by the GPO contracting officer.

Contract Clause 4(b) states that if any change made by the contracting officer causes an increase or decrease in the cost of the work, or the time required to complete the work, the printer is entitled to a contract price adjustment and an extension of the delivery schedule, or both.  A contract price increase and/or a schedule extension are supposed to be granted by the contracting officer by a written contract modification issued under Contract Clause 4(b).

While this system seems fair and straightforward, problems can arise.  The main reason for the problems is that with small jobs, or any jobs moving at a rapid pace to meet a schedule, communications regarding the work and changes are generally by telephone.  The printer may well be expending time and money to make a change requested by the contracting officer before receiving a written contract modification.  Later when the contract modification arrives, it may not reflect what the printer thought was agreed to.  Or the contract modification may not arrive at all.  This is a serious problem, since the printer cannot bill for the extra work without that piece of paper known as the “contract modification”.

To address the issue of changes properly, and to avoid or minimize problems with changes and payment, printers should follow up every verbal change by promptly completing and faxing the contract the Contract Mod for Changes form letter.  Use of this letter will create a paper trail that can be used later in the event a dispute arises over what changes were requested for or what contract price increase was agreed to.  Contract Clause 4 (c) provides that the printer must submit any request for a contract price increase within 30 days of the date it receives the written change order from the contracting officer.  Although contracting officers can consider request for additional payments made by the printer more than 30 days after the change order was issued, they do not always do so.

One important and unique thing about the GPO system is that Contract Clause http://www.gpo.gov/printforms/pdf/ppr.pdf5, dealing with disputes, requires the printer to move ahead with the changes requested by the contracting officer even where they can’t agree on a price.  The theory is that the government has deep pockets, and the printer can be assured of payment.  The problem with that theory is that without some written communication before the work is done, such as a signed contract modification or the Contract Mod for Changes Form Letter, problems may arise. 

Contract Clause 5 provides that if there is a dispute the printer must move forward with the work and then file a dispute with the contracting officer (a common dispute arises when the printer and the contracting officer can’t agree on the price of the changes, or whether the changes were ordered).  If that dispute is resolved to everyone’s satisfaction, the matter is ended.  If the printer is dissatisfied with the contracting officer’s "final decision," the printer can file an appeal to the GPO Board of Contract Appeals.

Making changes that are not authorized or confirmed in writing can result in a job being rejected, or a price reduction.  These “unauthorized” changes can occur when a printer makes a change that he feels will benefit the agency customer, or receives conflicting instructions (copy does not match specs, etc.) and the printer chooses what he believes is the obvious or logical choice.  That choice can constitute an unauthorized change which could result in rejection of the job or a price reduction. 

Contract Clause 7 requires that when there is an obvious conflict created by the government, the printer – not the government – has the duty to "bring any discrepancies to the attention of the Contracting Officer" before proceeding.

Copyright © 2000-2007 Frederic G. Antoun Jr.  All rights reserved.