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Administrative Change v Change to Terms and Conditions


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I am wondering if anyone has experience modifying a contract to add clauses that were supposed to be in the solicitation?  What is considered a change that would require a bi-lateral modification?  For example, adding an economic price adjustment clause to a contract would require a bi-lateral agreement between the government and its parties?  Using the Christine doctrine could a uni-lateral modification be issued to add the commercial contract clauses if they were not included in the original solicitation?  Has anyone had experience utilizing the Christine Doctrine to make changes to a contract and how was it done on an SF-30?

Thank you.

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I've never added clauses to a contract after award before, but I don't see why not. 1.108 says CO's can include FAR changes into existing contracts. I don't know why you couldn't process a modification to include ones that were missed. It would have to be a bi-lateral agreement you couldn't unilaterally add clauses.

I don't think you can use the Christine doctrine. Someone else might be able to elaborate, but I'm pretty sure most (if not all) legal doctrines are applied through court rulings, not CO's applying them.

 

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Guest PepeTheFrog
1 hour ago, ContractSpecialistTJohn said:

Using the Christine doctrine could a uni-lateral modification be issued to add the commercial contract clauses if they were not included in the original solicitation?  Has anyone had experience utilizing the Christine Doctrine to make changes to a contract and how was it done on an SF-30?

PepeTheFrog thinks Deaner is correct.

12 minutes ago, Deaner said:

legal doctrines are applied through court rulings, not CO's applying them

The Christian doctrine is called a doctrine because it was created by court precedent. The Christian doctrine allows a judge or court to incorporate a clause into a contract, by operation of law, as though the clause was in the contract from inception. The reasoning is that the contracting officer did not have the actual authority to not include a mandatory clause that expresses a significant or deeply ingrained strand of public procurement. It's a "legal fiction" imposed by a judge or court. The contracting officer can add any clauses he wants to your contract, unilaterally, but you can respond with a claim or request for equitable adjustment (REA). The only time the Christian doctrine will be applied is when a judge or court applies it.

Practical advice: Many contracting officers throw around the Christian doctrine, and they also try to force clause updates or additions down contractors' throats. The dirty "secret" is that you struck a particular deal based on the clauses in the solicitation and contract. If that deal changes, you might be entitled to compensation. Don't be afraid to negotiate. Don't fall for the "Well, I'll just put the new and updated clauses in the next option exercise." That's not how it should work.

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Let's first clear up the "Christian Doctrine."  The existence of the "Christine Doctrine" does not give the Government authority to make a change to a contract - if you read the case and the resulting legal analysis regarding the "Christine Doctrine" it will state something along the lines of:

Quote

"if a clause is required to be included in the contract and it "is sufficiently ingrained in public procurement policy." the contract will be read to include it even though it is not physically incorporated in the document"   Cibinic, Jr. John, Ralph C. Nash Jr., and James F. Nagle.  Administration of Government Contracts, 4th Edition

That does not mean the Contracting Officer can make that determination and then incorporate the clause into the contract unilaterally.  If you're relying on the "Christine Doctrine," the clause will not appear in the contract, then you'll roll the dice when/if a dispute arises causing the Government and the Contractor to appear in court.  The judge will then decide if the "Christine Doctrine" standards are met.

As for the other, larger issue, regarding changes to contracts, that all depends on the contract in question (is it commercial or non-commercial, fixed price or cost-reimbursable, etc.).  Read the contract and figure out what the contract says regarding changes to it and go from there.  What you won't find in any of the Changes clauses is the ability to unilaterally modify the clauses of the contract.  So here are some options to consider (not an exhaustive list):

  • If you and your organization's legal counsel are confident that the clause(s) meet the Christian Doctrine standards, don't bother trying to negotiate their inclusion.  If a dispute arises over the issue that the clause governs, per the "Christian Doctrine" the clause will be read in and applied appropriately.
  • If you and your organization's legal counsel is confident that the clause(s) meet the "Christian Doctrine" standards and you want the contract to read correctly, leverage that to incorporate them via bilateral modification with no (or minimal) consideration provided (after all, it would be read in anyways).
  • If the issue is unclear and in dispute between the Government and the Contractor, incorporate them via bilateral modification providing appropriate consideration (if warranted/necessary).
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Guest PepeTheFrog

Matthew Fleharty,

PepeTheFrog apologizes because this was a very, very poor way of stating the point. PepeTheFrog should not have said it at all.

PepeTheFrog does not mean that there is an authority to do so properly, just that no physical forces will stop a contracting officer from issuing a unilateral modification that adds more clauses. The contractor would receive the unilateral modification, and then be stuck with "doing something about it."

As a practical matter, if something like that happens, a contractor can file a claim or REA for whatever costs that new clause imposes. An alternative is to argue the insertion of the clause(s) is a cardinal change and breach of contract, but that's probably messier than simply following the clause and getting paid appropriately for it.

The proper way to incorporate a new clause is to negotiate with the contractor and agree to a bilateral modification (with appropriate consideration).

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Here_2_help's General Rule #1 for Contract Negotiations:

Whenever one party uses the "Christian Doctrine" to justify their position or proposed action, they have already lost.

Hope this helps.

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Guest Vern Edwards
3 hours ago, ContractSpecialistTJohn said:

What is considered a change that would require a bi-lateral modification? 

Unless a contract clause permits one of the parties to unilaterally modify a right or obligation of one or both of the parties, any change in a right or obligation must be made by mutual agreement, i.e., bilaterally.

3 hours ago, ContractSpecialistTJohn said:

Using the Christine doctrine could a uni-lateral modification be issued to add the commercial contract clauses if they were not included in the original solicitation?  

In order to understand what follows you must understand that "contract" means two things: (1) the contractual agreement between the parties and (2) the contract document that memorializes that agreement.

Keep in mind that the FAR does not anticipate that the CO will omit a mandatory clause without an authorized deviation, so it does not prescribe a  corrective procedure. We have to make something up.

If a CO believes that a mandatory clause that meets the criteria for application of the Christian Doctrine has been improperly omitted from the contract, and that the contract should be interpreted to include the clause, the CO should try to persuade the contractor to accept that interpretation. If that can be done, the parties should document their agreement to revise the text of the contract document to reflect the contractual agreement. The best way to do that would be on an SF-30 that describes the revision to the text of the contract document. The modification does not alter the contractual agreement. It merely revises the contract document to reflect the true agreement. Since the contractual agreement is not changed, and the modification does not alter the rights of the parties, there is no need for consideration to bind the parties to the terms of the modification. Why not an administrative change? Because administrative changes are unilateral by FAR definition, see FAR 43.101, and the parties should document the fact that they have agreed to revise the text of the contract document.

FAR does not prescribe that procedure. I made it up.

If the CO cannot persuade the contractor, then he or she may make a government claim in the form of a CO decision interpreting the contract to include the clause. The authority for such a claim would be the Disputes clause, FAR 52.233-1, paragraph (d)(1). See also FAR 33.206(b) and 33.210. The CO should cite the Christian Doctrine and demonstrate the the criteria for the application of that doctrine have been met. After issuance of the decision, the CO should then issue a unilateral modification to revise the text of the contract document to reflect the CO's interpretation of the contractual agreement, citing the clause prescription as authority. The contractor may appeal the decision in accordance with the terms and procedures of the Disputes clause.

In such cases, the clause is not added to the contractual agreement. The argument is that clause is already there by operation of law. The contractual agreement is not modified and no consideration is necessary. The parties are just revising the contract document to reflect the contractual document.

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The Prompt Payment Act Amendments of 1988 were effective for all contracts awarded after March 31, 1989. However,  the final rule was published in the Federal Register on March 31. The USACE awarded numerous construction contracts after March 31 with bid openings prior to the effective date or shortly after, without the new prompt payment and payment clauses. I thumbed through my PPA folders this afternoon and saw where HQ Office of Counsel, PARC and Construction provided detailed instructions in the Fall of 1989 for USACE Districts' contracting offices to unilaterally modify all such contracts, via administrative mods, to update the clauses "by operation of law. "  

My office prepared all the mods that our District issued and we developed the specific operating procedures, guidance and standardized attachments to payment requests to implement the new statutory requirements for progress payments, based upon the clauses and the revised OMB Circular A-125. 

Although the new clauses provided the contractors much quicker progress payments (positive cash flow), the new requirements prohibited prime contractors from physically withholding retainage from subs from the progress payments the government made to them. That had been a traditional practice which allowed primes to finance their contracts using the sub's retainage.  In addition, the Amendments required that the primes must pay their subs within seven (I think) days of being paid, which further affected their cash flow. 

Several firms threatened to submit claims for the increased cost of compliance and inability to physically hold the retainage from the sub's.  For contracts awarded after March 1989, the government is supposed to  reduce progress payments to the prime by the amount of any retainage from the subs or suppliers earnings payments, which the prime must identify in its progress payment request.  We informed all those potential claimants that the contract clauses were effective by operation of law and that they were deemed to have constructive notice of the final rule (even though we didn't know it either at that time). I have copies of the directives and correspondence with some of the contractors.   None actually submitted claims within our District. 

EDIT: OMB Circular A125, Prompt Payment,  wasn't amended to provide clear guidance and implementing instructions to government organizations, contracting officers, accounting and finance offices and receiving offices (ACO/CORs) until the Fall of 1989, either.  My PPA file is very thick and that part of it is 27 years old. I went through it earlier today to refresh my failing memory. It was a BIG deal back then. 

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