How do you write a request for equitable adjustment?
Many contractors end up filing both a claim and an REA. Although there is no specific required format, a request for equitable adjustment typically takes the form of a letter written to the contracting officer. Outlined below is a look at what goes into a successful request for equitable adjustment.
What is an AERA request for equitable adjustment?
A Request for Equitable Adjustment (REA) is an official request from a contractor to a contracting officer asking for an equitable change to the contract price based on a change to the contract requirements.
What is the difference between a Rea and a claim?
Requests for Equitable Adjustment (REA) and Claims are similar by definition; however, the purposes for filing either a REA or a Claim are quite different. It is important for a contractor to know the differences in order to understand which may be used in any given situation. Some of the differences between a REA and a Claim include:
What are the DFARS requirements for equitable adjustment?
FAR 33.207 (c). It should be noted, however, that the Department of Defense requires contractors to certify any REA that exceeds $150,000. DFARS 252.243-7002, Requests for Equitable Adjustment.
What is the difference between a request for equitable adjustment Rea and a claim?
An REA is considered collaboration between a Government Contracting Officer and a contractor attempting to resolve an issue and reach an amicable resolution; a Claim however, is a formal dispute which may lead to litigation.
What is an REA request for equitable adjustment?
A request for equitable adjustment (REA) is a contractor's proposal to the contracting officer (CO) seeking an equitable increase to the contract price based on a change to the contract requirements.
How long does the government have to respond to a request for equitable adjustment?
(3) Agreement to an equitable adjustment cannot be reached within 60 days of submission of the Contractor's proposal or receipt of additional requested information, despite the Contracting Officer's diligent efforts to negotiate the equitable adjustment.
What will generally involve an equitable adjustment?
An equitable adjustment, in government contracting, is a contract adjustment pursuant to a changes clause, to compensate the contractor expense incurred due to actions of the Government or to compensate the Government for contract reductions.
What is the REA certification?
REAs are typically used in contracting, but can apply to anyone involved with U.S. Government contracts. REAs are especially applicable to DoD acquisition programs, where contracting officers execute contracts of significant amounts to support those programs.
What is a rea?
Related Content. An agreement that: Provides for the rights and obligations of multiple owners of real property. Ensures harmony in the development, operations and maintenance of the affected real property.
Is the contracting officer required to make an equitable adjustment to the contract?
Contract modifications that result from either unilateral or bilateral changes are eligible for equitable adjustments. FAR 43.103. Contracting officers are required to negotiate equitable adjustments resulting from change orders in the shortest practicable time.
What is the FAR Changes clause?
The Federal Acquisition Regulation (“FAR”) defines “change order” to mean “a written order, signed by the contracting officer, directing the contractor to make a change that the Changes clause authorizes the contracting officer to order without the contractor's consent.” FAR 2.101.
What is an economic price adjustment?
Economic price adjustments are of three general types: (1) Adjustments based on established prices. These price adjustments are based on increases or decreases from an agreed-upon level in published or otherwise established prices of specific items or the contract end items.
How do you analyze a request for equitable adjustment?
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What is simplified acquisition threshold?
Simplified acquisition threshold means the dollar amount below which a non-Federal entity may purchase property or services using small purchase methods. Non-Federal entities adopt small purchase procedures in order to expedite the purchase of items costing less than the simplified acquisition threshold.
Why do contractors submit REA?
Because of the stigma the term “claim” often carries (i.e., a document with legal recourse and potential consequences), a common practice by many contractors is to submit a REA first, seeking a satisfactory mutual agreement in equity, unless they know beforehand that such is unlikely.
What is a claim in a contract?
Claims involve legal implications and thus can significantly affect the outcome of a contract. When a contractor encounters an “unforeseen or unintended change” in the contract requiring an equitable adjustment, they typically submit a REA that does not meet the definition of a claim pursuant to FAR clause 52.233-1.
How to adjust a contract?
DoD contracting personnel shall follow this “general” process if receive a REA, claim, or any other non-routine written request asking for an adjustment to a contract: 1 First, determine if the request meets the definition and standards of a claim in accordance with FAR 52.233-1, regardless of what it’s referred to in the document. 2 If it meets the standards of a claim, then you must process it as a claim regardless. 3 If it does not meet the standards of a claim found in FAR 52.233-1:#N#If the contractor has called it a “claim” (or there is some other reason to believe the contractor intends it to be a claim under FAR 52.233-1), reply immediately to the contractor pointing out the item (s) preventing it from being considered a claim, and work with them for further resolution, encouraging non-legal recourse if possible.#N#If the contractor has called it by some other name (e.g., “request for adjustment”, “request for consideration”, etc.), it is more than likely a REA and should be treated as such.
Do you need a REA before submitting a claim?
There is no requirement to submit a REA before submitting a claim and, although most often the case, the matter does not have to be in dispute before tendering a claim to the U.S. Government. The following table contains most of the similarities and differences between a REA and a claim. Attribute. REA Only.
What is a REA claim?
The reason for this is that a REA is considered a recovery remedy for increased contract performance costs associated with unforeseen Government modifications to the original contract. A Claim is considered a “routine request for payment” and usually involves a voucher or invoice.
What is the difference between a REA and a claim?
Some of the differences between a REA and a Claim include: Consultant fees, attorney fees, profit, and overhead are recoverable under a REA, whereas they are not recoverable under a Claim. An REA is considered collaboration between a Government Contracting Officer and a contractor attempting to resolve an issue and reach an amicable resolution;
How long does it take to file a REA?
A Claim does allow for recovery of interest, provided that a contractor properly submits a certified Claim, and interest begins accruing on the date of certification. An REA can be filed as soon as a modification to a contract arises and must be filed within a year of a modification. However, a Claim must be filed within 30 days of cancellation ...
Do REAs require certification?
A Claim must also be submitted to a Government Contracting Officer for a final decision. REAs however, do not require certification unless they are submitted to the Department of Defense and “…exceed the simplified acquisition threshold.” (See 10 U.S.C. 2410 (a)). REAs also do not require a Contracting Officer’s final decision ...
Is a written demand for equitable adjustment a claim under the contract dispute act?
However, a written demand or written assertion by the contractor seeking the payment of money exceeding $100,000 is not a Claim under the Contract Disputes Act of 1978 until certified as required by the Act. (See FAR § 2.101)). A Request for Equitable Adjustment (REA), on the other hand, allows a contractor to recover costs associated ...
Does a REA require a final decision?
An REA does not require a Government Contracting Officer’s final decision but, a Claim does require a Government Contractor’s final decision as a jurisdictional requirement. An REA does not allow recovery of interest. A Claim does allow for recovery of interest, provided that a contractor properly submits a certified Claim, ...
What issues with government Contracting can a request for equitable adjustment solve?
The government has added work not agreed upon to your project. Unchallenged increases in project scope, even small ones, can destroy your profits.
What to Do If You Receive a Request for Equitable Adjustment Denial Letter?
If the government denies your request, then you have a right to file a claim. There are two paths you can take when filing a claim. You can either bring it to the agency’s appeal board or bring it to the Court of Federal Claims.
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How long does it take to get an equitable adjustment?
Contractors should submit their request for equitable adjustment within 30 days of the change that creates the need for the REA. An REA may not be submitted after the contract has closed.
What is REA in contracting?
An REA is considered a contractor’s first option when the parties are unable to reach an agreement, which usually occurs because the government believes the extra work has already been covered by the contract. In a request for equitable adjustment, the contractor explains why it believes that the work is not covered by the contract.
Do you need to be certified for equitable adjustment?
Although requests for equitable adjustment do not generally need to be certified, those related to Department of Defense contracts with a value exceeding $150,000 do require certification.
Can a REA be converted into a claim?
An REA can also be converted into a claim later if necessary. It is important to note that filing an REA does not preclude a contractor from filing a claim later. Many contractors end up filing both a claim and an REA.
