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I've always issued bilateral modifications when adding funds incrementally to a contract. I do this because I want the contractor to acknowledge that it can continue working up to the new amount and that it knows that any work performed beyond the funded amount is at its own risk.

I've got someone telling me that this type of modification can be made unilaterally. I can see where this person is correct, but I'd like to know what the proper method is. Should a modification to add funds incremetally to a contract be made unilaterally or bilaterally.... or does it even matter?

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I think that the modification can be unilateral, based on the wording of FAR 52.232-22( b ):

"The parties contemplate that the Government will allot additional funds incrementally to the contract up to the full estimated cost to the Government specified in the Schedule, exclusive of any fee. The Contractor agrees to perform, or have performed, work on the contract up to the point at which the total amount paid and payable by the Government under the contract approximates but does not exceed the total amount actually allotted by the Government to the contract."

Think of it this way, what if the contractor refused to sign the bilateral modification allotting the additional funds? I think that the Government could still compel performance by unilaterally allotting the funds. As far as what is "proper", I don't think it's a big deal.

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Guest Vern Edwards

Unilaterally, as authorized by the Limitation of Funds clause, which clearly contemplates a unilateral decision by the CO to fund or not.

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