advised of the change, although this is not required by the contract terms.

(d) Authorized changes. The cited contract provision includes any structural changes to the total work which can be said to have been fairly and reasonably within the contemplation of the parties at the time the contract was made. It includes nonstructural changes necessary to carry on the work such as changes in sequence of operations, acceleration of work, and changes in Government furnished materials.

(e) Timeliness. Contract performance may be suspended or delayed by the contracting officer for a reasonable time, where necessary to work out the details of a proposed change and issue a change order. What is a reasonable time depends upon the extent of the change and other material circumstances. In any event, the contracting officer should proceed with contract changes, and adjustments thereunder, in a manner calculated to minimize any adverse effect on the contractor.

(1) Disputes. If the contractor does not agree with the adjustment in the change order, he must nonetheless proceed with the prosecution of the work as ordered. He is allowed a period of 30 days from the date of receipt of the change order by the changes provision of the contract within which to claim further adjustment. However, if the contracting officer determines that the facts justify such action, i.e., that the delay is not prejudicial to the Government, and evidence is available to determine the merits of the claim, he may consider and adjust any such claim if asserted at any time prior to the date of final payment under the contract. Upon receipt of such a claim, the contracting officer shall consider the facts and make whatever further adjustment in the contract is justifiled in accordance with the procedures for equitable adjustments stated in § 4-18.5107.

§ 4-18.5104 Differing site conditions.

(a) Contract provisions. Clause 4 of Standard Form 23A provides that the contractor shall promptly, and before such conditions are disturbed, notify the Contracting Officer in writing of (1) subsurface or latent physical conditions at the site differing materially from those indicated in the contract, or (2) unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and

generally recognized as inhering in work of the character provided for in the contract. Similar language appears in Clause 1 of Standard Form 19. These standard forms provide that if such conditions cause an increase in the cost of, or in the time required for, performance of any part of the work under the contract, whether or not changed as a result of such conditions, an equitable adjustment in the amount to be paid the contractor and/or in the time of performance shall be made by the contracting officer, unless the contractor fails to give the required notice and the contracting officer does not consider waiver of the notice to be justified.

(b) What constitutes a differing site condition (1) Misrepresented conditions. The first category of conditions cognizable under the differing site conditions clause is those physical conditions differing materially from that indicated by the invitation and contract, including all plans, drawings, specifications, logs, charts, and other parts thereof. If the Government intentionally or unintentionally misrepresented what had been found in the course of its site investigative work, or found otherwise, or withheld pertinent information which could have had a substantial bearing on the contractor's bid calculations and the contractor was therefore damaged through his reasonable reliance upon the information provided by the Government, he is entitled to an equitable adjustment. In such a case, the usual contract clauses warning the bidder to inspect the site, and at the same time disclaiming responsibility of the Government for inaccuracy of information supplied, are insufficient to overcome the Government's failure to supply available, accurate information. On the other hand, if the Government shows fairly, honestly, and completely what it has found, the fact that what it does show may not be representative of the conditions later found to exist will not enable the contractor to be relieved because of misrepresentation.

(2) Unanticipated conditions. This category of conditions includes those existing at the time the contract was made which were unknown to both parties, and of such unusual nature that a competent contractor would not have anticipated their presence under the circumstances. Relief does not depend upon a comparison of the conditions found with the contract documents, but rather on

whether the actual conditions encountered do differ substantially from what a contractor should reasonably have expected, based not only upon the information furnished by the Government, but also upon the conclusions which would reasonably be drawn from generally known conditions of the surrounding area and the nature of the job to be done. Statements in the invitation that the contractor is responsible for informing himself of conditions at the site, or that disclaim responsibility of the Government for unknown conditions cannot detract from the right given the contractor by the Differing Site Conditions Clause to an equitable adjustment if he encounters conditions which he could not reasonably be expected to have foreseen under the circumstances. However, if the bidder is given an opportunity to inspect the site and fails to do so, he cannot obtain relief on the basis of ignorance of conditions of which he could have been warned by a thorough visual inspection. Unusual weather conditions are not considered differing physical conditions within the meaning of this clause.

(c) Determination of contract adjustment. Upon receipt of notice of a differing site condition from the contractor, the contracting officer shall promptly investigate the conditions and if he finds that such conditions do so materially differ and cause an increase or decrease in the cost of, or the time required for, performance of any part of the work under the contract, he shall determine and make an equitable adjustment as provided in 4-18.5107. No claim for adjustment shall be allowed unless the contractor has given written notice of the differing conditions prior to their being disturbed, unless the Government actually knew of the conditions, or where its interests were not prejudiced by failure to give notice at the time required, or where evidence is available to establish the merits of the claim.

(d) Disputes. If the contractor does not agree with the adjustment made by the contracting officer, he may so notify the contracting officer, who then shall prepare a finding of fact and make a decision, as provided in § 4–50.104 of this chapter. In accordance with the contract Disputes Clause, the contractor may appeal from the decision of the contracting officer within 30 days from the date of receipt thereof.

(e) Contract provisions for estimated quantities. (1) Where quantities of items, such as earth excavation, rock removal, etc., are estimated, consideration should be given to including in the contract a special provision establishing the point at which overruns or underruns of such estimated quantities shall be considered as entitling the Government or the contractor to an equitable adjustment in the contract price. The following language is prescribed for such a provision:

QUANTITY VARIATIONS

(a) Where the quantity of work shown for an item in the schedule of items, including any modification thereof, is estimated, no adjustment of the contract price nor of the performance time shall be made for overruns or underruns which are within twentyfive (25) percent of the estimated quantity of any such item.

(b) For overruns of more than twenty-five (25) percent, the Contracting Officer shall reestimate the quantity for the item, establish an equitable contract price for the overrun of more than twenty-five (25) percent, adjust contract performance time equitably, and modify the contract in writing accordingly; this clause to thereafter be applicable to the total reestimated item quantity.

(c) For underruns of more than twentyAve (25) percent, the Contracting Omcer shall determine the quantity for the item, establish an equitable contract price therefor, adjust contract performance time equitably, and modify the contract in writing accordingly.

Additional language may be included limiting application of the provision to major items in the contract.

§ 4-18.5105 Work orders.

The term "work orders" is used for a variety of actions which are within the general scope of the contract, but which do not increase or decrease the amount due under the contract or the time required for its performance. Any situation involving a "Change" or "Differing Site Conditions," as described in §§ 4-18.5103 and 4-18.5104, requires a change order signed by the contracting officer whether or not there is a change in the contract amount or time of performance. Work orders would be used for any situation where it is advisable to direct the contractor in writing to fulfill some contract requirement in a specific way, such as when he ignores verbal directions, or to order performance of work for which a contingent sum is set up in the schedule of items of work and which is not covered by the notice to proceed, or to establish

specifications for portions of work which the contract provides shall be at the direction of the engineer, etc. Work orders are a part of the official actions under a contract and as such are to be retained as a part of the contract file.

§ 4-18.5106 Amendment.

All changes in contract work within the general scope contemplated by the contract will be ordered by change orders. When additional work outside the scope of the contract is required, and it is determined that the contractor is the only reasonable source, such additional work may be included in the contract by an amendment in the form of a supplemental agreement which must be signed by the contractor. The contract file must contain a statement adequately supporting the execution of the agreement as being within the exceptions to the statutory advertising requirements.

§ 4-18.5107 Equitable adjustment.

(a) Authority. The standard contract clauses such as for "Changes", "Differing Site Conditions", "Disputes", etc., provide for the making of equitable adjustments in contract price and time.

(b) Determination. The method of determining the equitable adjustment varies, dependent upon whether work is, or is to be, completed, and upon the adequacy of contractor's accounts, the nature of the work, etc. While rigid rules applicable to all circumstances cannot be given, these are some rules of general application:

(1) The costs that will be reasonably experienced by the contractor should be used. The costs of a more experienced company should not be used as a standard.

(2) Profit is allowable unless the contract provision specifically limits recovery to costs. However, anticipated profit on work deleted may not be included.

(3) Adjustments may be based on fair and reasonable approximations of the costs made by experts.

(4) The mere difference between the originally estimated cost of performance and the actual cost of performing changed work is not of itself an acceptable basis for making the adjustment. What would be reasonable costs of performing the work must be determined.

(5) Adjustments in both time and price should be made concurrently. Any adjustment in contract time is a recogni

As a minimum, the contracting officer should be advised once each month as to the progress of construction work in such terms as to enable him to judge whether satisfactory progress under the contract is being obtained. The work progress report may be in the form of an estimate of work accomplished under each item which, if in appropriate detail, may be used by the contractor as his invoice.

§ 4-18.5109 Extension of contract time.

Extension of contract time may be authorized only when contract general provisions (such as clauses 3, 4 and/or 5 of SF-23A) provide specific authority therefor. When an extension of contract time is requested because of delays due to causes as specified in the contract, the contracting officer shall ascertain the facts and prepare and furnish to the contractor a report of his findings and decision. (See § 1-8.602-3 of this title.)

§ 4-18.5110 Claims arising out of breach of contract by the Govern

ment.

(a) Claims by contractors arising out of breach of contract by the Government may not be settled administratively.

(b) If the Contracting Officer determines, based upon the facts surrounding the alleged breach, that responsibility should clearly rest with the Government; and, if the claim is reasonable, just, and agreed to by both parties as to amount, it should be submitted to the General Accounting Office for settlement.

(c) All such claims shall be accompanied by all available evidence and shall extend only to the actual costs incurred which are in excess of the costs which reasonably would have been incurred but for the breach of contract by the Government.

4-30.5001 Contracts with states. 4-30.5002 Contracts pursuant to the Research and Marketing Act of 1946, as amended, 7 U.S.C. 4271 and 1624.

AUTHORITY: The provisions of this Part 4-30 issued under 5 U.S.C. 301, 40 U.S.C. 486 (c).

SOURCE: The provisions of this Part 4-30 appear at 29 F.R. 14343, Oct. 16, 1964, unless otherwise noted.

Subpart 4-30.4-Advance Payments § 4-30.400 Scope of subpart.

Subpart 1-30.4 shall apply only to those contracts of this Department executed pursuant to the authority of the Federal Property and Administrative Services Act of 1949, as amended (41 U.S.C. 255). § 4-30.406 Responsibility delegation of authority.

Heads of agencies or their designees are delegated the authority to make the determination to make advance payments pursuant to section 305 of the Act, based upon written findings which, in accordance with Section 307(c), shall be final and available within the agency for a period of at least six years following the date of the determination. Designees shall be responsible headquarters or field officials other than the contracting officer.

Subpart 4-30.50-Special Contract Financing Authorities

84-30.5001 Contracts with states.

Under circumstances where the State requires advance payment and contracting with the State is to the Government's advantage, advance payments may be made. (Comp. Gen. Dec. B-35670 of 7-16-43 and B-36099 of 8-14-43.) § 4-30.5002 Contracts pursuant to the Research and Marketing Act of 1946, as amended, 7 U.S.C. 427i and 1624. The Act provides that advance, progress, or other payments may be made without regard to the provisions of section 3648, Revised Statutes. Advance

payments may be made in any amount not exceeding the contract price, provided: (a) adequate security for such advance payments is obtained when the contract is being made with other than public organizations, (b) the amount of the advance payment is based upon an analysis of the financing required by the contractor for the contract and does not exceed reasonable financial requirements between payments, and (c) such advance payment is necessary and appropriate in order to contract for the required work. Contract provisions must state the amount of the advance payment. Performance bonds on prescribed standard forms will satisfy requirements for adequate security.

4-50.201 4-50.202 4-50.203

4-50.204 4-50.205

4--50.206

Manner of filing appeals.

Form and contents of appeal.

Receipt and transmittal.

Board of Contract Appeals.

Request by contracting officer for hearing.

Releases to contractors.

AUTHORITY: The provisions of this Part 4-50 issued under 5 U.S.C. 301, 40 U.S.C. 486 (c).

SOURCE: The provisions of this Part 4-50 appear at 29 F.R. 14344, Oct. 16, 1964, unless otherwise noted.

§ 4-50.000 Scope of part.

This part prescribes policy and procedure for the handling of questions of fact and disputes thereon arising under contracts.

Subpart 4-50.1-Disputes

shall be performed in accordance with the procedures herein, recognizing that their application requires the utmost in tact and sound judgment. It is emphasized that by the inclusion of the standand disputes clause in a contract, the parties have agreed upon a procedure to be followed when disagreements arise thereunder, and failure to pursue these administrative procedures and exhaust all the remedies so provided may prejudice the rights of the contractor otherwise to enforce such claims in the courts. 84-50.102 Questions of fact.

The general provisions of Standard Forms 23A and 32 specifically indicate several questions as being questions of fact. In general terms, any question which involves the submission of evidence to enable a decision is a question of fact whereas any question which does not require the introduction of evidence to form a decision is a question of law. For instance, the interpretation of the intent or meaning of contract provisions involves questions of law but determinations as to whether the contractor has complied with contract provisions usually involve the introduction of evidence and thus are questions of fact.

§ 4-50.103

Determination of questions

by mutual agreement. Within the terms of the contract, it is the responsibility of the contracting officer to resolve by mutual agreement with the contractor a variety of questions of fact. These may arise either before or after all payments due under the contract are believed to have been made, in such problem areas as price adjustments, change in delivery time, rejection of materials, or similar matters in connection with the administration of contract provisions. A tactful and cooperative approach by the contracting officer to the contractor's problem will do much to avoid formal protests and claims. In the majority of cases, a satisfactory agreement can be reached if the contractor has been fully informed of the specific contract provisions pertinent to the questions involved and the rights of the contractor and the Government with respect thereto. When questions are settled in this manner, the agreement should be documented for record purposes in the form of a letter or memorandum of agreement. If, however, the contractor is dissatisfied with explana

tions or determinations given and an agreement cannot be successfully negotiated, he should be referred to the contract provisions regarding disputes and advised to present his claim in writing to the contracting officer. The contractor shall be given an opportunity to present to the contracting officer oral arguments or evidence in support of his claims, if he so desires. It is particularly important that the claim be in writing if it is in regard to a matter which the contract requires to be in writing. Decisions will be rendered in accordance with 84-50.104.

A contractor may designate legal counsel or other persons to represent him in disputes with the Contracting Officer. The Contracting Officer, after receipt of any such designation, should furnish the representative with a copy of any written communication to the contractor. If a contractor has more than one representative, the furnishing of a copy of such communication to any one representative is sufficient.

[29 F.R. 14844, Oct. 16, 1964, as amended at 35 FR. 18018, Aug. 15, 1970]

§ 4-50.104 Decisions by contracting officer.

(a) Except as may be otherwise specifically provided in a contract, any dispute concerning a question of fact arising under a contract which is not disposed of by agreement shall be decided by the contracting officer who shall reduce his decision to writing and mail by certified mail, return receipt requested, or otherwise furnish a copy thereof, to the contractor. Such decisions shall be made in the format prescribed in § 4-50.104-2.

(b) Before making his decision, the contracting officer shall consider such oral or written argument or evidence as the contractor presents and shall conduct such investigation as may be necessary to ascertain the facts and shall appropriately document the findings. The advice and assistance of the Office of General Counsel and Office of Plant and Operations should be requested whenever disputes involve complicated questions of fact or involve questions of law. Law questions may be considered in making the decision when necessary to a complete adjudication of the claim although any decision on a question of law cannot be final.