§ 1-7.703-17 Contract not affected by oral agreement.

CONTRACT NOT AFFECTED BY ORAL

AGREEMENT

No oral statement of any person shall modify or otherwise affect the terms, conditions, or specifications herein stated. All modifications to the contract must be made in writing by the Government's Contracting Officer or his authorized representative.

§ 1-7.703-18 Service Contract Act of 1965. Insert either the clause set forth in § 1-12.904-1 or the clause in § 112.904-2 in accordance with the conditions contained in those sections.

§ 1-7.703-19 Termination for convenience of the Government.

Insert either the clause set forth in § 1-8.705-1 under the conditions prescribed in § 1-8.700-2(a)(2).

§ 1-7.703-20 Moving contracts for the relocation of a Federal office.

(a) A prospective contractor shall be competent to perform a moving contract involving the relocation of a Federal office, whether a move of this type takes place between States, including the District of Columbia (i.e., an interstate move), or wholly within the borders of one State or the District of Columbia (i.e., an intrastate move).

(b) Paragraph (b) of the Performance Capability clause prescribed by this § 1-7.703-20 and the Permits, Authorities, or Franchises clause prescribed by § 1-7.701-2 may be deleted when the contracting officer determines that the exclusion of the provision is in the best interest of the Government. In these cases, the requirement relating to obtaining or holding State authority to operate within the State, and to maintaining a facility within the State or commercial zone, shall not apply.

(c) The following provisions, subject to paragraph (b) of this section, shall be included in each such invitation and in the resulting contract:

PERFORMANCE CAPABILITY

(a) If the move specified herein is to be performed by the Contractor as a carrier within the borders of more than one State, including the District of Columbia (i.e., an

interstate move), the Contractor shall have obtained and hold appropriate and current operating authority from the Interstate Commerce Commission.

(b) If the move specified herein is to be performed by the Contractor as a carrier wholly within the borders of one State or the District of Columbia (i.e., an intrastate move), the Contractor shall, when required by the State or the District of Columbia in which the move is to take place, have obtained and hold appropriate and current operating authority from such jurisdiction, in the form of a certificate, permit, or equivalent license to operate, or if no such authority to operate is required by the State or the District of Columbia in which the move is to take place, then the Contractor as carrier shall maintain facilities, equipment, and a business address within the jurisdiction in which the move is to take place: Provided, That if the move is to originate and/or terminate within an area of one State, or the District of Columbia, which comprises a part of a recognized Commercial Zone (see 49 CFR Part 1048), whose boundaries encompass portions of more than one State or the District of Columbia, it shall be sufficient if the Contractor as carrier maintains facilities, equipment, and a business address within the Commercial Zone and holds appropriate operating authority, if required, from the jurisdiction within which he maintains such facilities, equipment, and business address.

(c) If the move specified herein will not be performed by the Contractor as carrier it must be performed for the Contractor by a carrier operating under a subcontract with the Contractor. In such instance, the Contractor shall not be subject to the requirements of paragraphs (a) and (b), above, but it shall be the responsibility of the Contractor to require and insure that the subcontractor carrier complies with such requirements in every respect.

(d) There shall be compliance with the applicable requirements of this clause at least 14 days before the date on which performance of the contract shall commence under the terms and conditions herein specified: Except that, if the period from the date of award of the contract to the date that performance shall commence is less than 28 days, the Contractor need only comply with the applicable requirements of this clause midway between the time of award and the time of commencement of performance.

[38 FR 991, Jan. 8, 1973, as amended at 46 FR 13217, Feb. 20, 1981]

§ 1-7.703-21 Employment of the handicapped.

Insert the clause set forth in § 112.1304-1 under the conditions contained in the section.

[39 FR 26642, July 22, 1974]

§ 1-7.703-22

Cost accounting standards.

(a) National defense procurements. Insert the notices set forth in § 13.1203-3(a) in solicitations of proposals and the appropriate contract clauses set forth in § 1-3.1204-1 in negotiated contracts in accordance with the provisions of Subpart 1-3.12.

(b) Nondefense procurements. Insert the notice set forth in § 1-3.1203-3(b) in solicitations of proposals and the appropriate contract clauses set forth in § 1-3.1204-2 in negotiated contracts in accordance with the provisions of Subpart 1-3.12.

[47 FR 4082, Jan. 28, 1982]

Adjustment for Suspension, Delay, or Interruption of the Work").

a. For many years problems have been encountered in the administration of these clauses. A study of the problems was initiated by GSA on June 18, 1964. The Study Group (which included the representatives of major construction contracting agencies) submitted a report on March 1, 1966, in which it set forth basic objectives, analyzed administrative difficulties, and recommended revised contract clauses. Included in the basic objectives were:

(1) Clarification of the authority of the contracting officer with respect to the making of changes.

(2) Express recognition in the contract document itself of the doctrine of "constructive changes."

(3) Elimination of the adverse effects of the "Rice" doctrine (insofar as it has been interpreted to preclude appropriate consideration of the effect of a change upon affected aspects of contract work not specifically covered by the change order).

(4) Clarification and revision of notice requirements imposed by the Government on the contractor.

Underlying these objectives was the desire to facilitate administrative adjustment of claims arising under construction contracts. It was believed that the elimination of "fractionalization" problems in the handling of such cases by contracting officers, contract appeals boards, the General Accounting Office, and courts will benefit both the Government and contractors.

b. The proposals set forth in the report of the Study Group were submitted for comment both to Government agencies and to construction industry representatives (including industry associations, professional bar groups, and interested individuals). In the light of the comments received from these organizations, the Study Group submitted on May 8, 1967, a supplemental report which set forth additional revisions in the text of the respective clauses. Thereafter, further reconciliations were made by GSA and the prescribed texts of the clauses were developed, giving due consideration to the views and recommendations of all interested parties, consistent with the interests of the Government.

2. Nature of revisions to contract clauses.-a. Changes clause. (1) Paragraph (a), like a counterpart provision in the clause previously prescribed, establishes the authority of the contracting officer to make changes within the general scope of the work. The revised clause makes it clear, however, that the change may relate to any aspect of the work to be performed under the contract. To effect this clarification, the clause sets forth illustrative categories for the making of changes, which embrace

changes not only in the drawing, designs and specifications, but also changes in the method and manner of performance; in the provision of sites and services; or requiring acceleration in performance. These categories are intended to be descriptive of the kind of change actions which historically have been accommodated under the Changes clause. Deceleration actions not related to a change or unreasonable delay in the issuance of a change order were intentionally omitted since they are in the nature of a suspension, delay, or interruption covered by the Suspension of Work clause, which is now made a mandatory clause. Hence, it is not intended that the Changes clause cover actions which (i) are clearly denoted as a suspension order or (ii) have as a primary purpose the effecting of a suspension, delay, or interruption of the work. While the contracting officer is authorized to make changes in any aspect of the work itself, the clause does not authorize him to alter any of the collateral aspects of contract performance, such as are covered by the payment and so-called boilerplate clauses.

(2) Paragraph (b) of the clause (for which there is no counterpart provision in the clause previously prescribed) concerns "constructive changes." This paragraph provides that other written or oral orders (including directions, instructions, interpretations, or determinations) from the contracting officer which cause a change within the general scope of the work will be treated as changes under the clause. However, as a prerequisite to the consideration of a claim based on a constructive change, the contractor must notify the contracting officer that he considers such order to be one directing a change in the work to be performed.

(3) Paragraph (c) (for which there is no counterpart provision in the clause previously prescribed) provides that no order, statement, or conduct of the contracting officer shall be treated as a change, except as specifically provided for in the clause itself. With respect to constructive changes, accordingly, only those provided for in paragraph (b) may be considered under the Changes clause. This paragraph does not, of course, preclude the contractor from seeking such administrative relief as may be available under another clause contained in the contract, such as the Suspension of Work or a Government-furnished property clause. Likewise, it does not preclude the contractor from seeking judicial relief for breach of contract.

(4) Paragraph (d), like a counterpart provision in the clause previously prescribed, establishes the contractor's right to an equitable adjustment in situations involving the making of changes. More specifically, the paragraph states that if any change effected under the clause causes an increase in

the cost of, or in the time required for, the performance of any part of the work, "whether or not changed by any order," an equitable adjustment is to be made.

(i) A significant revision in the clause is the adoption of additional text designed to eliminate the application of the "Rice" doctrine (which reflected interpretive rulings relating to the meaning of the clause previously prescribed). The elimination of the "Rice" doctrine has been accomplished primarily by adding the phrases "any part of the work" and "whether or not changed." These phrases now appear in the Changes clause of Standard Form 32, the general provisions for standard supply contracts. An equitable adjustment clearly encompasses the effect of a change order upon any part of the work, including delay expense; provided, of course, that such effect was the necessary, reasonable, and foreseeable result of the change.

(ii) Except for defective specifications, the Changes clause as revised will continue to have no application to any delay prior to the issuance of a change order. An adjustment for such type of delay, if appropriate, will be for consideration under the provisions of the Suspension of Work clause.

(iii) A further revision in the equitable adjustment provision in paragraph (d) has been made by reason of the recognition in the clause of constructive changes under paragraph (b). Under this revision, a contractor who seeks relief in a constructive change situation not involving defective specifications cannot recover for any costs arising more than 20 days prior to his furnishing an apprisal notice as prescribed under paragraph (b). Accordingly, a cost limitation which has heretofore been prescribed for suspensions arising under the Suspension of Work clause will now also be prescribed for constructive changes arising under the Changes clause. The 20-day limitation is not waiverable, and costs may not be recovered contrary to this limitation.

(iv) Notwithstanding the inapplicability of the 20-day cost incurrence limitation to constructive change orders involving defective specifications, the apprisal notice required by paragraph (b) must be given. Moreover, paragraph (d) also limits the equitable adjustment to costs reasonably incurred in attempting to comply with defective specifications. Thus, the time of the notice in relation to when the contractor becomes aware of the defect could be a factor in determining reasonableness of costs. Of course, no adjustment is intended to be allowed in connection with defective specifications unless the Government is responsible therefor.

(5) Paragraph (e) requires the contractor to submit to the contracting officer a statement setting forth the general nature and monetary extent of his claim for an equita

33-133 0-84--35

ble adjustment within 30 days after the receipt of a written change order issued under paragraph (a), or within 30 days after the furnishing by the contractor to the contracting officer of an apprisal notice pursuant to paragraph (b). The paragraph also indicates that in a constructive change situation arising under paragraph (b), the contractor may include his claim statement with his apprisal notice. Because the clause previously prescribed made no reference to the constructive change situation, that clause did not cover the furnishing in such a situation either of an apprisal notice or of a claim statement. In effect, the clause merely required the contractor to submit a notice of intent to assert a claim where a change order issued. Also, there was no specific requirement to provide information on the nature and extent of the claim, based on either a change order or a constructive change. Such additional information will enable the contracting officer to evaluate a claim properly, particularly in a constructive change situation. A further revision concerns the authorization to extend the time for the filing of a claim. Under the text of the clause previously prescribed, the time for submitting the assertion of a claim could be extended by the "contracting officer." Under the clause as revised, the time for the submission of the claim may be extended by the "Government," which includes a contract appeals board. Whether the Government would be prejudiced thereby is for consideration in granting an extension.

(6) Paragraph (f) (the subject matter of which appeared in the clause previously prescribed merely as a dependent phrase rather than as an independent statement) states that a claim for an equitable adjustment under the clause must be asserted prior to final payment.

(7) The disputes provision which appeared in the text of the clause previously prescribed has been deleted. The existence of an administrative remedy is established by the Disputes clause. Accordingly, there is no need to reiterate in clauses covering particular aspects of the contractual agreement the availability of that remedy. It must be emphasized that deletion of a separate disputes provision from the Changes clause (or from the Differing Site Conditions clause or the Suspension of Work clause) does not alter or diminish in any respect the applicability of the Disputes clause or the jurisdiction of administrative boards, which will continue to be subject to the limitations imposed by the Wunderlich Act.

(8) The extra work or material provision which appeared in the final sentence of the clause previously prescribed has been deleted. The provision appears to be unnecessary because the revised clause will cover all applications for adjustment thereunder,

whether based upon a change order or a constructive change.

b. Differing Site Conditions clause. The Differing Site Conditions clause has been developed to coordinate its text with that of the Changes clause as revised. The principal revisions in the Differing Site Conditions clause are as follows:

(1) The former title, "Changed Conditions," has been replaced by the new title, to "Differing Site Conditions" describe more accurately the subject matter of the clause.

(2) The phrases, "any part of the work" and "whether or not changed," have been added to conform the text of paragraph (a) with similar provisions of the Changes clause.

(3) Like paragraph (e) of the Changes clause, which relates to a prescribed notice to be provided by the contractor, paragraph (b) of the Differing Site Conditions clause states that the time for furnishing a prescribed notice may be extended by the "Government." The term "Government" has been substituted for the term "contracting officer" in this provision for the same reason that such substitution has been made in a similar provision of the Changes clause.

(4) The separate disputes provision included in the prior Changed Conditions clause has been deleted for the same reasons that such provision has been deleted from the Changes clause.

c. Suspension of Work clause. The Suspension of Work clause has been revised to coordinate its text with that the Changes clause as revised. The principal revisions in the Suspension of Work clause are as follows:

(1) The abbreviated title, "Suspension of Work," commonly used in making reference to the clause, has been adopted in lieu of the longer title appearing in the clause previously prescribed.

(2) The text of paragraph (b) of the clause has been modified and some clarifications and editorial revisions have also been made. Accordingly, the phrase "without fault or negligence of the contractor" which appeared in the first sentence of the counterpart paragraph of the clause previously prescribed has been removed and has been added to the second sentence of the paragraph. For clarification, the second sentence of the clause as revised specifically indicates that an adjustment is not to be made under the clause in any instance where "an equitable adjustment is provided for or excluded under any other provision" of the contract. Accordingly, where a claim for delay expense is cognizable under the Changes clause or the Government-Furnished Property clause, for example, an adjustment will be for consideration under these clauses in

1-8.203

Methods of settlement.

1-8.204 Duties of prime contractor after receipt of notice of termination. 1-8.205 Duties of contracting officer after issuance of notice of termination. 1-8.206 Fraud or other criminal conduct. 1-8.207 Accounting review of prime con

tract settlement proposals and of subcontract settlements.

1-8.208 Settlement of subcontract claims. 1-8.208-1 Subcontractor's rights. 1-8.208-2 Prime contractor's rights and obligations.

1-8.208-3 Settlement procedure. 1-8.208-4 Authorization for subcontract

settlements without approval or ratification.

1-8.208-5 Recognition of judgments and arbitration awards.

1-8.208-6 Delay in settlement of subcontractor claims.

1-8.208-7 Government assistance in settle

ment of subcontracts.

1-8.208-8 Assignment of rights under sub

contracts.

1-8.209 Settlement agreements. 1-8.209-1 General.

1-8.209-2 Excepted items.

1-8.209-3 Government property.

1-8.209-4 No-cost settlement.

Subpart 1-8.4-Additional Principles Applicable to the Settlement of Cost-Reimbursement Type Contracts Terminated for Convenience 1-8.401 General.

1-8.402 Discontinuance of invoices or

vouchers.

1-8.403 Notice to the General Accounting Office.

1-8.404 Procedure after invoices or vouchers are discontinued.

1-8.404-1 Submission of settlement proposal.

1-8.404-2 Interim negotiations.

1-8.404-3 Partial payments.

1-8.404-4 Adjustment of overhead costs.

1-8.404-5 Information concerning previous cost invoices or vouchers. 1-8.404-6-1-8.404-7 [Reserved] 1-8.404-8 Final settlement.

1-8.405 Procedure for partial termination. 1-8.405-1 General.

1-8.405-2 Submission of settlement propos

al (fee only).

1-8.405-3 Submission of invoices or vouch

ers.

1-8.406 Adjustment of fee.