NOAA Acquisition Manual

Main Table of Contents

Subchapter G- Contract Management

Part 1330-43 Contract Modifications

Subpart 1330-43.1 General

1330-43.101-70 Definitions

1330-43.102 Policy

1330-43.105 Availability of Funds

Subpart 1330-43.2 Change Orders

1330-43.205 Contract Clauses

1330-43.205-70 Solicitation and Contract Language

1330-43.270 Unpriced Change Orders and Undefinitized Contract Actions


 

Part 1330-43 Contract Modifications

Subpart 1330-43.1 General

1330-43.101-70 Definitions

“Change order” means a written order, signed by the contracting officer (CO), directing the contractor to make a change that the Changes clause authorizes the CO to order without the contractor’s consent (unilateral). See FAR 2.101-Definitions.

“Request for Equitable Adjustment” (REA) means a request submitted by the contractor for compensation to account for adjustments to the contract price, delivery terms, or both.   Equitable adjustment means that the contractor is entitled to its costs, plus reasonable profit (except for suspensions and profit on uncompleted work with regard to termination for convenience), and overhead.  The additional costs must be allowable, allocable, and reasonable.

  1. If the change(s) cause an increase or decrease in the cost of or the time required for performance of any part of the work, the Contractor must assert its right to an equitable adjustment within 30 days after receipt of the order, by submitting to the CO a written statement describing the general nature and amount of the proposal, unless this period is extended by the Government.
  2. The equitable adjustments are negotiated and agreed upon by both parties in accordance with FAR 43.103(a) and/or FAR 43.204.
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“Undefinitized Contract Action” (UCA) means a contract action for which the contract terms, specifications, or price are not agreed upon before performance commences.   A UCA is used when the negotiations of a definitive contract action is not possible in sufficient time to meet Government requirements, and Government interest demands that the contract action be initiated in order for contract performance to begin immediately.

  1. A UCA includes letter contracts; orders under a basic ordering agreement, blanket purchase agreement, or a Federal Supply Schedule; undefinitized task or delivery orders; or an undefinitized modification for additional supplies or services to an existing contract determined to be outside of the scope of the original contract.  The policy for letter contracts is covered within the Federal Acquisition Regulation (FAR) 16.603, Commerce Acquisition Regulation (CAR) 1316.603, Commerce Acquisition Manual (CAM) 1301.70, Delegation of Contracting Authority, and NAM 1330-16.
  2. A UCA does not include a unilateral change under the Changes clause, administrative changes, funding modifications, or any other modifications within scope under the terms of the contract.
  3. Submission of a qualifying proposal in accordance with the definitization schedule is a material element of the contract.

“Unpriced Change Order” (UCO) means a unilateral change that is within the scope of the contract where the Government and contractor have not reached an agreement, in contract terms, on an equitable adjustment.

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1330-43.102 Policy

(a) Complete a Business Case Memorandum (BCM) for any negotiated change to the contract.
 

1330-43.105 Availability of Funds

(a)(1) Funding contract modifications. See NAM 1330-32.703-170(a)(2) for additional policy on funding contract modifications.

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Subpart 1330-43.2 Change Orders

1330-43.205 Contract Clauses

1330-43.205-70 Solicitation and Contract Language

(a)  Insert the solicitation and contract language located at 1330-52.243-70, Requests for Equitable Adjustment, in all solicitations and resulting contracts to appropriately address REAs resulting from UCOs or UCAs.


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1330-43.270 Unpriced Change Orders and Undefinitized Contract Actions

(a)   For the purposes of definitization, UCOs and UCAs are processed in a similar manner by NOAA.

  1. A UCA or UCO shall include a price ceiling or a not-to-exceed amount and a definitization schedule that provides for definitization by the earlier of:
    1. The date that is 180 days from the date the action was issued; or
    2. The date in which the funds obligation amount under the contract action reaches 50 percent of the price ceiling or the not-to-exceed price.
      1. The Government shall not obligate more than 50 percent of the price ceiling or the not-to-exceed price before definitization occurs.
      2. However, if a contractor submits a qualifying proposal before 50 percent of the ceiling price or the not-to-exceed price has been obligated by the Government, then the limitation on obligations before definitization may be increased to no more than 75 percent of the ceiling price or the not-to-exceed price.
      3. The CO may extend the period (180 days) or the amount (50 percent of the ceiling price or the not-to-exceed price) for the definitization schedule, subject to the review and approval of the SBPO.
  2. The definitization schedule for a UCA or UCO shall include:
    1. A Milestone Plan, completed in collaboration with the contractor, that outlines the definitization schedule for the UCA or UCO; and
    2. Evidence of an agreement on the Milestone Plan between the Program Office and the Acquisition Division.

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(b) Legal Review. All UCAs, UCOs, Letter Contracts, REAs, and resultant definitized actions and contracts require legal review before being issued or finalized in accordance with CAM 1301.71 Legal Review of Acquisition Related Thresholds.

(c)  Processing Requests for Equitable Adjustment

  1. A UCO or UCA cannot be definitized until negotiations for the REA have been completed. Negotiations for the REA shall be completed within 180 days of the issuance or receipt of the UCO or UCA. 
    1. The equitable adjustment agreed upon shall not exceed the ceiling price specified for the UCO or UCA.
    2. Notification must be submitted to the responsible CO’s Division Director who will notify the SBPO of any REAs, UCOs, and UCAs where negotiations have not been completed within 180 days. The notification must include:
      1. The reason for the extended time frame;
      2. A plan for resolution; and
      3. The estimated value of the equitable adjustment.
  2. The CO’s final resolution for each negotiated REA must be submitted to the SBPO, who will review and submit the decision to the Senior Procurement Executive (SPE) for review in accordance with CAM 1301.70 Appendix B, Senior Procurement Executive Notifications, (d) Final Decision.

 

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