I awarded a contract with a basic period of 1 Jun 02 - 31 May 03 with four one-year option periods. My customer wants to change the period of performance to coincide with the fiscal year (1 Oct - 30 Sep). Is this allowed? If so, or not, is there a FAR citation I can reference?

By Vern Edwards on Tuesday, April 01, 2003 - 08:56 am:

Yes, it generally is permissible to restructure the periods of performance, or to make them longer or shorter. To the best of my knowledge, the FAR does not address this matter; such change is more a matter of contract law than procurement statute or regulation. I do not know of any procurement statute or regulation that prohibits restructuring a contract performance period. See FAR Subpart 11.4 for a general discussion of delivery or performance schedules. Any two parties that make a contract can agree to change it.

In practice, you will have to negotiate the change with the contractor, who may be affected in serious and costly ways. You cannot impose the change on the contractor; you must persuade the contractor to agree. This may entail compensating the contractor for any cost impact.

You must also take fiscal law into account. What funds did you obligate on the contract? What funds will you use in the new performance periods?

By joel hoffman on Tuesday, April 01, 2003 - 10:52 am:

Vern, I have two questions. You said, "You cannot impose the change on the contractor; you must persuade the contractor to agree." If so, would the supplemental agreement be outside the authority of the "Changes" clause, because changes are actions which could be unilaterally directed?

Would such a modification, if there is no other operable clause, thus be considered outside the scope of the contract? I know we've discussed this before. I'm not clear when a mod is within or outside the authority of the Changes clause or outside the KO's authority, without further justification or exemption from competition.

Technically, the Changes clause only seems to cover unilateral changes. Many changes are never issued unilaterally, yet still considered "changes", executed pursuant to the Changes clause. I've been under the impression that if one can't direct the scope of the change or unilaterally make the equitable adjustment, it isn't a "change", thus requiring another clause or other authorization to execute. I guess it's safe to say that there is some implied authority to make bilateral changes "within the scope of the contract" and that they are normally executed pursuant to this clause. Correct? happy sails! joel

By FormerCO4AF on Tuesday, April 01, 2003 - 10:57 am:

Vern,

Do you think Anonymous needs to ensure they do not exceed the 5 year limitation set forth at FAR 17.204(e)? (Unless an award term is used)

What about clause 52.217-9 -- Option to Extend the Term of the Contract? Specifically para c...

(c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed ___________ (months)(years).

By Vern Edwards on Tuesday, April 01, 2003 - 11:51 am:

Joel:

In answer to your first question: Yes, the supplemental agreement would be outside the authority of the changes clause. None of the changes clauses permits the contracting officer to unilaterally restructure the basic and option periods of performance.

In answer to your second question: No, I do not think that the change would be outside of the scope of the contract, defined as "all work that was fairly and reasonably within the contemplation of the parties at the time the contract was made." See: The Government Contracts Reference Book, 2d ed., by Nash, Schooner and O'Brien. A change of the type that Anonymous wants to make -- to bring the periods into line with the fiscal year -- would not alter the scope of the contract. An extension of the total period -- i.e., adding performance -- would be outside of the scope of the contract.

Finally, you must distinguish between a change ("modification") and a change order. The parties to a contract can change it at will. The changes clause is an agreement between the parties that one of them, the customer, can make certain kinds of changes unilaterally. However, the parties could choose to make those changes bilaterally, without recourse to the changes clause, if they so desire. They can also make changes not covered by the changes clause.

Technically, changes are called "modifications." See FAR § 43.103. There are two types: bilateral and unilateral. Bilateral modifications, called "supplemental agreements," include (a) supplemental agreements to definitize unilateral mods, (b) supplemental agreements to definitize letter contracts, and (c) supplemental agreements to make other changes that the parties agree to make. Unilateral modifications include (a) administrative changes, (b) change orders, and (c) other unilateral changes.

Many people have come to think that the changes clause is what authorizes the parties to make changes. Not so. All that the changes clause does is authorize the government to make certain kinds of changes unilaterally -- to order them. The parties do not need a clause to authorize them to to change their contract by mutual agreement; the power to make a contract includes the power to change ("modify") it.

FormerCO4AF:

In restructuring the period of performance the parties cannot extend that period so that the government buys more services. That would be a new procurement, beyond the scope of the existing contract, that would require new competition. This must be distinguished from a situtation in which the period of performance is extended to give the contractor more time to complete a project, which is not a new procurement and does not change the scope of the contract.

Vern

By Anonymous on Tuesday, April 01, 2003 - 11:57 am:

Thanks for your answers.

By joel hoffman on Tuesday, April 01, 2003 - 08:22 pm:

Thanks, Vern for the reality check/ basic review. happy sails! joel

By jlessig on Wednesday, April 02, 2003 - 01:07 pm:

Vern - In a case like this, what authority would you cite in Item 13 of the SF-30.

By Vern Edwards on Thursday, April 03, 2003 - 11:04 am: