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Unpriced Change Orders


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On 10/9/2020 at 8:09 AM, ji20874 said:

Just remember that DFARS subpart 217.74, Undefinitized Contract Actions, by its own words, does not apply to unpriced change orders within the Defense Department -- some DoD organizations or individuals may require compliance for change orders even though the DFARS does not it, but you should be able to tell the difference and understand the correct principle.

And also bear in mind that DFARS 243.204-70, Definitization of Change Orders, by its own words, only applies to unpriced change orders with an estimated value over $5 Million within the Defense Department -- some DoD organizations or individuals may require compliance for lower-dollar change orders even though the DFARS does not it, but you should be able to tell the difference and understand the correct principle.

Some former DoD persons who transfer to civilian agencies may bring some of this baggage with them.  

Read the FAR.  Read your current agency's regulations.  Then, do what they say.  

ji is correct. For USACE, the policy is that although unpriced change orders are not UCA’s, USACE says to “follow the policy and procedures at 217.74 to the maximum extent practicable”. I don’t remember a $5 million threshold so don’t know whether it applies for USACE. However, the SOP’s that were written are not overbearing and we’re written with practicality in mind. Doesn’t appear that Navy has any coverage for unpriced change orders beyond DFARs in their 52 FAR Supplement but there may be other coverage.

 Note that the contracting community complained to Congress during the past two years about agencies issuing change orders then not definitizing or making progress payments in a timely manner. As a member of the Design-Build Institute of America’s Federal acquisition committee, we were asked to review and comment on proposed language for a recent Defense Authorization Act proposal that would affect all agencies, requiring them to report the time it takes to definitize and pay for change orders. It was included in either the FY 2019 or 2020 Authorization Act. 

Here is the language in the USACE Acquisition Instructions for unpriced change orders. 

USACE ACQUISITION INSTRUCTION (UAI)
 PART 43 – CONTRACT MODIFICATIONS
SUBPART 43.1 — GENERAL
43.102-100 Policy.
(b) The policy and procedures at DFARS217.74 shall be used to the maximum extent practicable for contract modifications within the scope of the contract that are not "undefinitized contract actions" (UCAs) as defined by DFARS 217.7401(d) (e.g., unpriced change orders (UCOs)). A D&F, signed by the PCO prior to issuance of any such modification, shall contain, as a minimum, the following:
(1) The reason normal contract modification procedures and lead times are not practicable; (2) The date the requirement was first identified;
(3) The consequences of missing the required delivery date;
(4) The definitization schedule for the contract modification;
(5) An explanation for any deviation from the definitization schedule;
(6) The percentage of contract modification work completed by the contractor prior to definitization;
(7) The NTE price.
(c) The DCC/CCC and Chief of Construction shall establish management controls for monitoring definitization schedules, receipt of contractor proposals, and completion of negotiations/execution of the definitization modification, when UCOs are issued.”

The guidance that I wrote included limitations on the amount of the not to exceed price that could be paid prior to Receipt of a Qualifying proposal and or definitization, but we did not adhere to a 50% limitation.

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