Request for Equitable Adjustment
To maintain the “Benefit of the Bargain,” you may need a Request for Equitable Adjustment. Changes or modifications to the contract do occur for the benefit of one or all parties of a contract from time to time. In order for the contract performance baseline to remain equitable, the contractor must submit a Request for Equitable Adjustment. An Equitable Adjustment in compensation and/or time for performance is the result of changes to the parties’ obligations.
Do not agree to an “equitable adjustment” without first seeking counsel. These changes or modifications can affect your ability to have a profit for your performance of the contract.
There is no such thing as a perfect contract. When contracting in the federal, state or local government marketplace, contractors need to be prepared to effectively manage any changes to the agreed contract at any stage of performance.
A Request for Equitable Adjustment is an administrative procedure used to maintain the balance of the original performance obligations and the benefit of the bargain due to changes. A well-reasoned and supported Request for Equitable Adjustment avoids conflict or dispute.
The Busch Law Firm understands that changes to a government contracts can affect the “benefit of the original bargain.” They can help you determine if Request for Equitable Adjustment is appropriate.
What Makes Government Contracts Unique?
The Federal Acquisition Regulation Changes clause gives broad powers to the Government to adjust the contract performance baseline. Good contract administration is important to:
- Manage technical changes in a timely manner;
- Avoid misunderstandings;
- Take necessary mutually agreed upon corrective actions; and
- Negotiate an administrative resolution without a dispute.
The Changes clause also provides that the contractor may propose revisions to the work in order to:
- Gain more efficient performance;
- Provide greater quality of the contract end product; and
- Demonstrate a collaborative approach with their customer to achieve success.
In government contracts, there is a requirement to obtain competition when ordering supplies or services. The Changes clause is a unique provision that could allow the Government to order additional work within the general scope of the contract. The parties could order these changes without conducting a full competition. It also allows the Government to make changes to the administration of the contract through a simple unilateral direction. A Request for Equitable Adjustment gives the contractor the right to maintain the benefit of the bargain though increased money or time for performance for any changes to the original agreement.
Government Subcontractors – A Note
A Request for Equitable Adjustment from the prime contractor to the Government may also include the costs incurred from any changes to the work by the subcontractor. This “ripple effect” from subcontractor to prime contractor to the Government must be effectively managed.
A subcontractor Request for Equitable Adjustment, or pass-through claim, is a different specialized process to recover compensation for additional work performed on the subcontract.
If you are a subcontractor, it is very important to have a legal review of the changes to your work effort and grounds for recovery. It is important to determine if the change was ordered solely by the prime contractor or the Government.
Government Contract Administration Law Firm
The Busch Law Firm will work with you to ensure any proposed contract change is within the general scope of the contract and properly documented.
A Request for Equitable Adjustment is an administrative function which would allow you to recover consultant and attorney’s fees as an allowable cost. Recovery of costs for extra performance and to submit a Request for Equitable Adjustment is simply good contract
administration and business.
Contact us on 844-243-4198 to learn more about recoverable costs or increased performance time through an equitable adjustment. Remember, all initial consultations are free.