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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 avoid controversies that may result from a supplemental agreement making an equitable adjustment, the CO should:
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