Overview
This section defines and distinguishes between the two primary types of contract modifications—bilateral and unilateral—specifying the signatures required and the appropriate regulatory use cases for each.
Key Rules
- Bilateral Modifications (Supplemental Agreements):
- Require the signatures of both the contractor and the contracting officer to be effective.
- Are used to formalize negotiated equitable adjustments resulting from change orders.
- Are required to definitize letter contracts and to incorporate any other mutual agreements that modify existing contract terms.
- Unilateral Modifications:
- Require only the signature of the contracting officer.
- Are used for "administrative changes" that do not affect the substantive rights of the parties.
- Are used to issue change orders and termination notices.
- Are authorized for specific actions permitted by contract clauses, such as exercising an option (Options clause) or directing a suspension of work.
Practical Implications
- Contractors should carefully review bilateral modifications before signing, as these represent mutual agreements that typically include a release of claims regarding the change.
- Unilateral modifications allow the government to exercise specific authorities (like funding changes or option exercises) quickly without requiring contractor consent, provided the action falls within the scope of an existing contract clause.