Unilateral Modification

How It Works

Federal contract modifications come in two forms under FAR Subpart 43.1: bilateral (signed by both the contracting officer and the contractor, documenting mutual agreement) and unilateral (signed only by the contracting officer). Unilateral modifications are issued using Standard Form 30 with only the CO's signature and are limited to a narrow set of circumstances authorized by contract clauses or statute: (1) administrative changes (updating accounting data, contract numbers, points of contact) that do not affect the rights of the parties; (2) changes within the scope of the Changes clause (FAR 52.243-1 and variants), where the CO can unilaterally direct changes in drawings, designs, specifications, or the method of performance, with the contractor entitled to an equitable adjustment; (3) exercise of options (renewals, quantity increases) that were already negotiated at award; (4) funding modifications that obligate additional funds to a previously agreed scope; and (5) termination for convenience or for default notices. The contractor cannot refuse a properly-issued unilateral change but can seek an equitable adjustment (price, schedule, or scope adjustment) through the Contract Disputes Act process if the change imposes costs. Disputes over whether a change was within scope, within the Changes clause authority, or properly compensable are common subjects of Armed Services Board of Contract Appeals (ASBCA) and Civilian Board of Contract Appeals (CBCA) litigation. De-obligation modifications that reduce scope or fund amounts are also typically unilateral and appear on USASpending.gov as negative-dollar transactions on a contractor's action history.

Related Terms

• Contracting Officer (CO), The government official with legal authority to enter into, administer, and terminate federal contracts, the only person who can obligate the government.
• Federal Acquisition Regulation (FAR), The comprehensive rule book governing how federal agencies buy goods and services, covering everything from how to write a solicitation to when to use competitive bidding.
• Federal Contract, A legally binding agreement between the U.S. government and a private company to provide goods or services, from fighter jets to IT consulting.
• De-obligation, The return of previously obligated funds to the Treasury when a contract or grant ends under its obligated value, a scope is reduced, or an option is not exercised.