5-8.9 Administration of Change Orders

When change orders are not priced before performance, they usually require two documents: (1) the change order and (2) a supplemental agreement reflecting an equitable adjustment for the change order. If an equitable adjustment in the contract price or delivery terms, or both, can be agreed upon in advance, only a supplemental agreement need be issued. If the change order has no effect on price or delivery, no equitable adjustment or supplemental agreement is needed. Administrative changes and changes issued under a clause giving the Postal Service a unilateral right to make a change (such as an option clause) require only one document. COs must promptly negotiate equitable adjustments resulting from change orders and must follow up when claims for equitable adjustment are not received within 30 days after the order. Before negotiating an equitable adjustment, the CO must ensure that price and cost analyses, as appropriate, are made and must consider the supplier’s segregable costs of the change, if available. If additional funds are required as a result of the change, the funds must be available before the supplemental agreement is signed. To ensure that all parties have reached a complete understanding and resolution of all of the issues and to avoid controversies that may result from a supplemental agreement making an equitable adjustment, the CO should do the following:

• Ensure that all elements of the equitable adjustment have been presented and resolved, and
• Include a release of claims in the supplemental agreement. The following is some suggested language for a release, but contracting officers should always ask assigned counsel to review any release of claims prior to use:

 

Supplier’s Statement of Release

The supplier agrees that this modification constitutes a complete accord and satisfaction for the (insert supplier’s request or proposal here), and, upon execution of this modification, the supplier releases the Postal Service from any and all liability under this contract for further equitable adjustments attributable to such facts or circumstances giving rise to the (insert reference to the supplier’s request or proposal here).