Definitions:

a. Bilateral Contract Modification: A contract modification that is signed by the contractor and the contracting officer. 27 DCMR § 3699.1.

b. Unilateral Modification: A contract modification that is signed only by the contracting officer.

c. Cardinal Change A contract change which is "outside the scope" of the original contract, and thus not within the authority of the Changes clause to order. Such changes are "sole source procurements, and must be processed as a non-competitive procurement (see Section IV.D., above).

d. Contract Modification: A contract modification is any written change in the terms of a contract. Contract Modifications may be bilateral or unilateral. 27 DCMR § 3601. i. The OCFO shall use a bilateral contract modification to do the following

(A) Make negotiated equitable adjustments resulting from the issuance of a change order;

(B) Formalize a letter contract; or,

(C) Reflect other agreements of the parties to modify the terms of the contract. ii. The OCFO shall use a unilateral contract modification to do the following:

(A) Make administrative changes, such as correction of typographical errors or appropriations information

(B) Issue Change orders (note that the cost or price impact of the change order will generally be negotiated and will result in a bilateral modification to the cost or price of the contract);

(D) Issue a termination notice.

d. Change Order: A written order signed by the Director of the Office of Contracts directing the contractor to make a change that the Director of the Office of Contracts is authorized to make without the contractor’s consent pursuant to the contract.

i. A change order is a change in the specifications or terms of a previously awarded contract. The OCFO is committed to a policy of competitive, non-discriminatory procurement and contracting practices in accordance with applicable law, particularly the requirement that certain contracts be awarded upon quotations to the lowest responsive and responsible bidder and sealed proposals to the most qualified offeror. ii. However, the OCFO also recognizes that after a contract is awarded, certain

circumstances may arise wherein a modification or change order to the contract would be required. This procedure for amendments, modifications and change orders is designed to ensure that changes in the costs, specifications or scope of work of a

contract are consistent with applicable law and policy pertaining to competitive contract awards in order to:

(A) Ensure that the OCFO does not pay more to complete its contract than is minimally necessary;

(B) Preclude a contractor from tendering the lowest bid and then increasing the value of the contract through the change order process;

(C) Ensure that the terms and conditions upon which the contract was awarded are met throughout the term of the contract, including any and all change orders; and (D) Ensure that the change order procedure is not utilized to bypass the competitive

procurement process.

2. Change Order Procedures for All Procurements. The COTR must follow the procedure outlines below to obtain a contract modification if he or she determines that circumstances require a change to the original scope of work of a contract. Contract modifications may be initiated by either the Government or the contractor. Only the Director of the Office of Contracts or designee is authorized to execute a contract modification on behalf of the OCFO.

a. Step 1. The COTR, with the responsibility for overseeing the contract, shall identify the need for any change in the specification and/or terms of the contract and shall determine whether the additional work required meets the criteria for a change order as set forth herein.

b. Step 2. If the additional work is a change (rather than enforcement of the contract a written), the COTR shall describe the reason for the change and itemize the work to be done, so the contractor can prepare and submit an accurate proposal for the cost to complete the work. c. Step 3. The COTR shall review the proposed cost and make an initial determination as to

whether the cost proposal of the original contractor is reasonable and competitive in light of the original quotation(s) or proposal(s). If the contract modification involves a change in the dollar amount of the contract, the COTR shall verify with the Budget Office that funding for the modification is available. 27 DCMR § 3600.4.

d. Step 4. If the COTR determines that the price is competitive and reasonable and that funding is available, the COTR shall prepare a change order request justifying the change and submit it for review by the Contracting Officer and Director of the Office of Contracts. 27 DCMR § 3604.1. The Contracting Officer shall prepare the justification package request for

presentation to the Director of the Office of Contracts for approval. The Director of the Office of Contracts, may deny the request and direct that the work be awarded through the

competitive procurement process.

3. Justifications for Change Orders. Change orders are only justified in one or more or the following instances:

a. There are unforeseeable changes in departmental needs and requirements during the course of the fiscal year. As a general rule, the aggregate value of change orders should not exceed 25% of the original purchase order or contract amount in a twelve-month period. However, aggregate values exceeding this percentage will be allowed provided that the changes to be made are within the scope of the original contract, and that the change order is not used to circumvent the competitive procurement process, and that each change order amount reflects fair and reasonable market prices.

b. Prior to executing a change order that increases the original purchase order or contract amount by 25% or more, the Contracting Officer shall prepare a justification for the change order and submit it to the OCFO Director of Contracts for review and approval. The

Contracting Officer is responsible for ensuring that the Program Office/COTR is not splitting change order s to keep their value below the 25% threshold.

c. There are changes in applicable laws or regulations which require modification of the specification; or

d. There is an immediate and unanticipated threat to public health, safety and welfare, including emergencies and acts of God.