LATE BIDS AND MODIFICATIONS OR

WITHDRAWALS

(This paragraph applies to all advertised solicitations. In the case of Department of Defense negotiated solicitations, it shall also apply to late offers and modifications (other than the normal revisions of offers by selected offerors during the usual conduct of negotiations with such offerors) but not to withdrawal of offers. Unless otherwise provided, this paragraph does not apply to negotiated solicitations issued by civilian agencies.)

(a) Bids and modifications or withdrawals thereof received at the office designated in the invitation for bids after the exact time set for opening of bids will not be considered unless: (1) They are received before award is made; and either (2) they are sent by registered mail, or by certified mail for which an official dated post office stamp (postmark) on the original Receipt for Certified Mail has been obtained and it is determined by the Government that the late receipt was due solely to delay in the mails for which the bidder was not responsible; or (3) if submitted by mail (or by telegram if authorized), it is determined by the Government that the late receipt was due solely to mishandling by the Government after receipt at the Government installation: Provided, That timely receipt at such installation is established upon examination of an appropriate date or time stamp (if any) of such installation, or of other documentary evidence of receipt (if readily available) within the control of such installation or of the post office serving it. However, a modification which makes the terms of the otherwise successful bid more favorable to the Government will be considered at any time it is received and may thereafter be accepted.

(b) Bidders using certified mail are cautioned to obtain a Receipt for Certified Mail showing a legible, dated postmark and to retain such receipt against the chance that it will be required as evidence that a late bid was timely mailed.

(c) The time of mailing of late bids submitted by registered or certified mail shall be deemed to be the last minute of the date shown in the postmark on the registered mail receipt or registered mail wrapper or on the Receipt for Certified Mail unless the bidder furnishes evidence from the post office station of mailing which establishes an earlier time. In the case of certified mail, the only acceptable evidence is as follows: (1) Where the Receipt for Certified Mail identifies the post office station of mailing, evidence furnished by the bidder which establishes that the business day of that station ended at an earlier time, in which case the time of mailing shall be deemed to be the last minute of the business day of that station; or (2) an entry in ink on the Receipt for Certified Mail showing the time of mailing and the initials of the postal employee receiving the item and making the entry, with appropriate written verification of such entry

from the post office station of mailing, in which case the time of mailing shall be the time shown in the entry. If the postmark on the original Receipt for Certified Mail does not show a date, the bid shall not be considered.

[33 F.R. 20042, Dec. 31, 1968]

§ 1-7.602-2 Termination for convenience of the Government, in contracts estimated to exceed $10,000. Whenever a termination for convenience clause is to be included in contracts estimated to exceed $10,000, insert the clause set forth in § 1-8.703 under the conditions prescribed in § 1-8.700-2(a) (5).

§ 1-7.602-3 Termination for convenience of the Government, in contracts estimated not to exceed $10,000.

Whenever a termination for convenience clause is to be included in contracts estimated not to exceed $10,000, insert the clause set forth in § 1-8.705-2 under the conditions prescribed in § 1-8.700-2 (a) (6).

§ 1-7.602-4 Price reduction for defective cost or pricing data.

Insert the appropriate clause set forth in § 1-3.814-1 under the conditions described therein.

§ 1-7.602-5 Audit and records.

Insert the appropriate clause set forth in § 1-3.814-2 under the conditions described therein.

§ 1-7.602-6 Subcontractor

pricing data.

cost and

§ 1-7.602-10 Federal, State, and local

taxes.

Insert either the clause in § 1-11.401-1 or the clause in § 1-11.401-2 and, when appropriate, insert the supplementary clause in § 1-11.401-3 (a), in accordance with the conditions contained in those sections.

APPENDIX

BACKGROUND AND NATURE OF REVISIONS TO
CONTRACT CLAUSES

1. Background. This amendment prescribes three revised contract clauses for use by executive agencies in fixed-price construction contracts, namely: "Changes;" "Differing Site Conditions" (formerly designated "Changed Conditions"); and "Suspension of Work" (formerly designated "Price 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 adjust

ment 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 equitable 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, "Differing Site Conditions" to 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 follows:

as

1-8.208 1-8.208-1 1-8.208-2

(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 preference to the Suspension of Work clause. Furthermore, granting an extension of time under the "Delays-Damages" clause (Clause 5 of Standard Form

1-8.208-3 1-8.208-4

Scope of subpart.

General.

Notice of termination.

Methods of settlement.

Duties of prime contractor after receipt of notice of termination. Duties of contracting officer after issuance of notice of termination.

Fraud or other criminal conduct. Accounting review of prime con

tract settlement proposals and of subcontract settlements. Settlement of subcontract claims. Subcontractor's rights.

Prime contractor's rights and obligations.

Settlement procedure.

Authorization for

subcontract