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Posted on Tuesday, July 29, 2014

Do Not Read All FAR Clauses Literally

A literal reading of some FAR clauses can cost you money. One such clause is the Changes clause (FAR 52.243-4) requiring the contractor to give the contracting officer written notice of suspected government changes within 30 days. Although a contracting officer or COTR might want to demand strict compliance with the clause, all government contractors need to know that courts do not require strict compliance. A contractor may be entitled to an equitable adjustment for a contract change even though the contractor notifies a government employee other than the contracting officer of a suspected change long after 30 days have passed and even if the notice is oral. A recent court decision shows how broadly courts construe the Changes clause notice provision.A construction contractor claimed that it was entitled to an equitable adjustment for design changes that the government imposed in the comments it made to the contractor’s design plans. But the first time the contractor raised the issue was in court pleadings three years after the government had made its design comments and long after the building was built. The contractor should have given the contracting officer notice of its disagreement immediately after receiving the government comments.

Although the court concluded that this contractor’s notice was too late, its decision discusses precedents that established the defining issue in “notice” disputes. It is not whether 30 days have passed, nor whether the notice was oral, or even whether the contracting officer was the government employee who got notice. The issue is what harm has the government suffered by a contractor’s failure to give 30 days written notice? In this recent case, the harm was that timely notice would have given the parties a chance to resolve the issue years ago, making litigation unnecessary.

But in many situations, the lack of 30 days written notice to the contracting officer may not harm the government. For example, the contractor had complained orally to the COTR immediately after being told to do extra work.

Of course, the best policy is to rigidly follow the rules in the clause. However, a government contractor needs to know that all FAR clauses should not be taken literally. Nor should a government contractor be deterred from filing a request for an equitable adjustment by a contracting officer’s rigid interpretation of a notice provision.

If you believe the government has made costly change to your contract without modifying it to add money, let the Government Contracts Team at Berenzweig Leonard help you make sure you give the government proper notice. A small investment in legal advice can have a large return for you.

Terrence M. O’Connor is the Director of Government Contracts at Berenzweig Leonard LLP. He can be reached at TOConnor@BerenzweigLaw.com

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