Contract Change Evaluation



Contract Change Evaluation

Introduction

All the government contracts are supervised by the contracting officers who have also authority to make any changes in the contract (Warren, 2012). At the time of accepting contract, our company, Aberdeen Logistics, had also accepted the unilateral power of contracting officer. If there is any change in contract, he will communicate with the contracting party as soon as possible on the given address. In terms of contract, our company was responsible to give services for 12 months. As the contracting period began, there was the unavailability of many army personals because of their trainings outside the country. Our company sent 10 prime candidates to perform the work, and they remained 400 hours/week (40*10) in the field. They worked for one month against the rate of $65 which makes a total cost of $104000 (1600*65). Contracting officer communicated with us to stop the services for three months. At this time, our company had given one month services. Now the government wants again to start the services for next 12 months, and it will pay only $50,000 for one month delivered services. In this grim scenario, our company is facing some administrative and legal challenges to avoid any unfavorable scene.

Change Order Accounting Procedure

In the FAR 43.203, there is detailed information about the change in contract work. Actually, these are the guidelines for the contracting officer to segregate the additional cost which incurred because of the extra work done by the contracting party. It is also the duty of the contracting party to read them carefully before signing the contract because it describes which costs are payable and which are not accountable in case of extra work. He is empowered to make any changes in the contract like method of packaging, shipment, designs, drawings and other items of the contract. In FAR 43.205 contract clauses, Alternative V says, the contracting officer can make an equitable modification in the time, price and other indirectly affected clauses of the contract (Hamrick et al, 2009).. According to the case, the contract officer is liable to make extra amount but he did not.

Administrative process to effect the changes

Changes in the context of the contract are the general practice in all types of government and private contracts. To deal with them in the right manner, FAR 43.204 defines the roadmap. According to this clause, the contracting officer has to inform in the quickest possible time for changes in the contract, but in this case it was informed after one month of the delivery of services. He is also responsible to negotiate with the contracting party about the equitable adjustments. However, there was no negotiation between us and contracting officer adjusted this amount without considering our views. Moreover, the contracting officer has the power of using various price analyses before deciding the price. These are also discussed in detail under the clause FAR15.404-1. He may require price data and certified cost for the evaluation of provided services and then determine the matter ...