What is the effect of the ‘changes’ clause?

Each Government contract contains a Changes clause. The Changes clause allows the Government contracting officer to make changes within the general scope of the contract. These changes generally may involve changes in the Government-furnished specifications, method of shipment or packing, place of delivery, or time of performance.

The contractor must assert its right to an “equitable adjustment” under the Changes clause within a certain time from the date that the change occurred. (An “equitable adjustment” is generally the amount required to cover the contractor’s increased (or decreased costs) plus an additional amount to account for profit.) If the Government change increases or decreases the cost of performance under the contract, the contracting officer must make an “equitable adjustment” in the contract price, delivery schedule, or both. If the contractor disagrees with the adjustment, it should submit a claim under the Contract Disputes Act. However, the contractor should continue with performance while the claim is pending.