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Revisions in Regulation During Contract Performance
By mosummers on Friday, June 07, 2002 - 06:22 pm:

I'd like to get information on any existing FAR clause or guidance governing a contractor's obligation to adhere to government regulations listed in a contract that are revised during performance of the contract. For example, if the contract states that the contractor is required to follow the guidelines of AFR 10-1 dated 1 Apr 95, and the regulation is revised midway through the contract and now is AFR 10-1 dated 1 May 98, is there any government requirement or clause that applies to the contractor following the revised regulation?

By Vern Edwards on Friday, June 07, 2002 - 07:03 pm:

I am not aware of any such clause or guidance.

By John Ford on Friday, June 07, 2002 - 08:49 pm:

Agreeing with Vern, I do not believe there is any standard FAR clause or guidance on this issue. However, I have seen contracts that have special provisions requiring the contractor to adhere to the most current regulation at all times. Unfortunately, these contracts have not gone the next step and provided for an equitable adjustment if compliance with the most current regulation has an impact on cost/schedule.

By bob antonio on Saturday, June 08, 2002 - 06:56 am:

The Department of Energy (DOE) under its Managmenet and Operating (M&O) contract provisions in its FAR supplement (DEAR) has a specific clause that allows the contracting officer to unilaterally modify the contract to change or add new DOE Directives. See (b) below and how it is handled.

970.5204-2 -- Laws, regulations, and DOE directives.

As prescribed in 48 CFR 970.0470-2, insert the following clause:

Laws, Regulations, and DOE Directives (DEC 2000)

(a) In performing work under this contract, the contractor shall comply with the requirements of applicable Federal, State, and local laws and regulations (including DOE regulations), unless relief has been granted in writing by the appropriate regulatory agency. A List of Applicable Laws and regulations (List A) may be appended to this contract for information purposes. Omission of any applicable law or regulation from List A does not affect the obligation of the contractor to comply with such law or regulation pursuant to this paragraph.

(b) In performing work under this contract, the contractor shall comply with the requirements of those Department of Energy directives, or parts thereof, identified in the List of Applicable Directives (List B) appended to this contract. Except as otherwise provided for in paragraph (d) of this clause, the contracting officer may, from time to time and at any time, revise List B by unilateral modification to the contract to add, modify, or delete specific requirements. Prior to revising List B, the contracting officer shall notify the contractor in writing of the Department's intent to revise List B and provide the contractor with the opportunity to assess the effect of the contractor's compliance with the revised list on contract cost and funding, technical performance, and schedule; and identify any potential inconsistencies between the revised list and the other terms and conditions of the contract. Within 30 days after receipt of the contracting officer's notice, the contractor shall advise the contracting officer in writing of the potential impact of the contractor's compliance with the revised list. Based on the information provided by the contractor and any other information available, the contracting officer shall decide whether to revise List B and so advise the contractor not later than 30 days prior to the effective date of the revision of List B. The contractor and the contracting officer shall identify and, if appropriate, agree to any changes to other contract terms and conditions, including cost and schedule, associated with the revision of List B pursuant to the clause of this contract entitled, "Changes."

By Vern Edwards on Saturday, June 08, 2002 - 12:57 pm:

To add to what Bob has said, if a regulation such as AFR 10-1 is incorporated into a contract in the statement of work or specification, then the contracting officer can update it by issuing a change order pursuant to the Changes clause. This route will entitle the contractor to an equitable adjustment if the update increases the cost or time of performance.

Moreover, if a regulation applies to a contractor independently of the contract, e.g., OSHA regulations, then a change will take effect without contractual specification. In such a case the contractor may or may not be entitled to an equitable adjustment, depending on what the contract says.

By anon2 on Monday, June 10, 2002 - 07:47 am:

I once worked on a Base Operating Services Contract and frequently changes occurred as a result of changes in the law affecting the way the base plants (nculear power plant, environmental changes, water and sewage standards)were operated. When we incorporated the updated EPA standards or other standards, our engineers and COTRs evaluated the impact of the new guidelines. Some required an adjustment and some changes did not require an adjustment. We analyzed each change. Sometimes we ended up in dispute with the contractor as to impact and the contractor would file a claim.

By joel hoffman on Monday, June 10, 2002 - 10:12 am:


I don't know what your contract says, or what type contract it is (services? cost reimbursement? firm-fixed price?, etc.?). It would appear, from the wording you provided, that you need to issue a change to revise the applicable procedures, if the Contractor will have to change its procedures. happy sails! joel hoffman