1. When Do Construction Changes Support Additional Payment?
FAR 52.243-4 allows a Contracting Officer to order changes within the general scope of covered fixed-price construction contracts. When a qualifying change affects performance costs or time, the contractor may be entitled to an equitable adjustment. The first step is comparing the disputed work with the original contract requirements.
Written Orders and Constructive Changes
A written change order may revise drawings, specifications, performance methods, government-furnished property or services, or require acceleration. Compare the instruction with the original scope to identify the added work.
A constructive change may arise when the government requires different work without issuing a formal modification. Under FAR 52.243-4(b), qualifying written or oral orders from the Contracting Officer may be treated as change orders when the contractor provides the required written notice.
Instructions from inspectors or other personnel do not automatically bind the government. Contractors should identify the person issuing the direction, verify that person's authority, and preserve communications with the Contracting Officer.
Changed Work Versus Existing Contract Duties
Increased expenses alone do not establish a compensable change. Contractors must demonstrate that government action altered contractual requirements and caused additional costs or delays.
Review the original specifications, incorporated drawings, and executed modifications. These records help distinguish compensable changes from work already included in the agreed price.
Under the applicable government contracts framework, contract language and agency direction determine which adjustment procedures apply.
Differing site conditions require separate analysis. When FAR 52.236-2 applies, materially different subsurface or unusual physical conditions may support an adjustment. Contractors generally must notify the Contracting Officer promptly, in writing, before disturbing those conditions.
2. What Evidence Supports Additional Construction Costs?
A request for equitable adjustment should connect each claimed expense to a specific government-directed change. Labor overruns, material increases, or schedule disruptions need supporting records that distinguish changed work from ordinary performance costs.
Document the Change and Its Financial Impact
Contractors should preserve records created when the instruction was issued and while the affected work continued.
Useful evidence includes:
- Written orders and revised drawings showing the changed scope.
- Daily labor and equipment reports identifying additional work.
- Material invoices and subcontractor charges tied to the change.
- Updated schedules showing affected activities.
- Cost records separating original work from additional expenses.
Compare these records with the original estimate and distinguish unrelated inefficiencies. Contemporaneous documentation is generally more persuasive than a cost reconstruction prepared after the dispute begins.
Calculate Costs and Schedule Adjustments
An equitable adjustment may include reasonable direct costs, allocable indirect costs, and applicable profit attributable to the change, subject to the contract and governing cost principles.
Contractors should explain how each amount resulted from the changed requirement rather than from estimating errors or unrelated performance problems.
For schedule adjustments, identify affected critical-path activities and distinguish government-caused delays from concurrent delays. An increased cost does not necessarily establish entitlement to additional performance time.
Avoid claiming the same expense under multiple adjustment requests. A clearly supported calculation allows the Contracting Officer to evaluate the proposed contract modification.
3. What Notice and Timing Rules Apply to an REA?
FAR 52.243-4 contains separate requirements for constructive change notices, adjustment proposals, and costs incurred before notice. Contractors should review the clause incorporated into their agreement, including any authorized variations or agency deviations.
Review the Changes Clause Deadlines
Under the standard FAR 52.243-4, the principal requirements are summarized below.
| Requirement | General Rule |
|---|---|
| Constructive change notice | Written notice identifying the order, its circumstances and source, and that it is regarded as a change |
| Adjustment proposal | Generally within 30 days after receipt of a written change order or submission of constructive change notice |
| Earlier costs | Certain costs incurred more than 20 days before constructive change notice are excluded |
| Final payment | An adjustment proposal under the clause cannot be asserted after final payment |
Constructive change notice
- General RuleWritten notice identifying the order, its circumstances and source, and that it is regarded as a change
Adjustment proposal
- General RuleGenerally within 30 days after receipt of a written change order or submission of constructive change notice
Earlier costs
- General RuleCertain costs incurred more than 20 days before constructive change notice are excluded
Final payment
- General RuleAn adjustment proposal under the clause cannot be asserted after final payment
The 30-day period under FAR 52.243-4(e) may be extended by the government and may vary under applicable agency procedures.
The 20-day cost restriction applies to changes under paragraph (b), with an exception for government-responsible defective specifications. It is not a universal deadline for all construction claims.
Because other contracts may contain different Changes clauses, these specific deadlines should not be applied automatically to every federal procurement contract.
Prepare a Supported Adjustment Proposal
An REA should identify the contractual basis, describe the government-directed change, establish its cost or schedule impact, and propose an adjustment.
The submission should distinguish price changes from requests for additional performance time and explain the basis for each.
Where required, contractors must also address applicable REA certification requirements. An REA certification is not necessarily equivalent to the certification required for a formal CDA claim.
Contractors should preserve outstanding adjustments before final payment and evaluate any release language before signing closeout documents.
4. When Does an REA Become a Formal CDA Claim?
An REA generally seeks a negotiated contract adjustment. A formal claim under the Contract Disputes Act, 41 U.S.C. § 7103, invokes a statutory decision process. Negotiations need not fail before a contractor submits a qualifying claim.
The substance of the submission matters more than its title. An REA may constitute a CDA claim if it satisfies the applicable requirements.
Submit a Claim to the Contracting Officer
A monetary CDA claim must generally be in writing, demand a sum certain as a matter of right, and be submitted to the Contracting Officer for a decision. The submission must identify the contractual or legal basis for relief.
Claims exceeding $100,000 require the certification prescribed by the CDA. A contractor generally must submit a claim within six years after accrual, subject to applicable exceptions and contractual limitations.
The six-year period does not eliminate shorter notice obligations under the Changes clause.
Contractors should also distinguish an ordinary payment request from a disputed claim. A routine invoice does not automatically become a CDA claim simply because payment remains outstanding.
Review the Decision and Appeal Deadlines
For claims exceeding $100,000, the Contracting Officer generally must issue a decision within 60 days after receiving a properly certified claim or notify the contractor within that period when a decision will be issued.
For claims of $100,000 or less, the contractor may request a decision within 60 days. Different statutory timing rules apply depending on the claim.
When the Contracting Officer fails to issue a decision within the required period, the failure may constitute a deemed denial permitting further proceedings.
After receiving an adverse final decision, contractors generally have:
- 90 days to appeal to the appropriate agency board of contract appeals.
- 12 months to file suit in the U.S. Court of Federal Claims.
These are alternative review routes with different procedural requirements. Contractors handling government contract disputes should identify the applicable deadline before choosing a forum.
5. Frequently Asked Questions about Construction Change Claims
Can a Subcontractor File a Federal Construction Claim Directly Against the Government?
Generally, no. Subcontractors ordinarily lack direct contractual privity with the federal government. They typically pursue recovery through the prime contractor, which may sponsor a qualifying subcontractor claim. The subcontract, prime contractor's liability, and any applicable sponsorship arrangements affect that process.
Can a Contractor Recover Additional Costs After Signing a Final Release?
A final release may bar unresolved claims unless the contractor expressly reserves them or a recognized exception applies. Before signing, contractors should identify pending adjustments, specify any claims being reserved, and review the release language.
02 Nov, 2026
