What is a request for equitable adjustment (Rea)?
In such cases, the contractor has the choice of submitting a request for equitable adjustment (“REA”) to the contracting officer –calling for a negotiated settlement—or of submitting a [Contract Disputes Act] claim requesting a contracting officer decision…”
When to submit a proposal for equitable adjustment to a contract?
If the Contractor deems an oral or written order to be a change to the contract, it shall promptly submit to the Contracting Officer a proposal for equitable adjustment attributable to such deemed change. The proposal shall also conform to the requirements set forth herein.
What are the elements of a no cost request for Equitable Adjustments?
(d) Proposals for equitable adjustments, including no cost requests for adjustment of the contract's required completion date, shall include a detailed breakdown of the following elements, as applicable: (1) Direct costs. (2) Markups. (3) Change to the time for completion specified in the contract.
What are the conditions for entitlement to equitable adjustment?
(1) The nature and complexity of the change or other condition giving rise to entitlement to an equitable adjustment warrants estimating, scheduling, or other effort not reasonably foreseeable at the time of contract award; (2) Proposed costs are not included in a firm's time-related costs or overhead rate; and
What is the difference between a request for equitable adjustment and a claim?
[iii] Thus, the distinction between a claim and an equitable adjustment is that if the contractor submits the extra work as a “claim,” a contractor is entitled to the interest, but not claim preparation costs.
When can you request an equitable adjustment?
An REA normally occurs when the contractor finds that an unexpected issue has arisen that wasn't anticipated during the development of the original contract. The contractor will submit a proposal to the contracting officer outlining the issue and the justification of the equitable adjustment.
What is an equitable price adjustment?
An equitable price adjustment is what ensures the contractor is completely compensated for changes to a contracted agreement. This could be in materials, funds or other items. This ensures he or she is left after the contract has ended in the same position financially as if no change occurred.
How do I file an equitable adjustment request?
Tips For A Successful Request For Equitable AdjustmentDetail What Happened. ... Include Supporting Documents. ... Review The Releases. ... Get The Timing Right. ... Track The Time You Spend. ... Track Legal Fees. ... Get It Certified If Required.
Why may you need to make an adjustment to an existing agreement contract?
When should you amend an existing contract? Amending a contract is a good remedy to fix small mistakes. For example, this could include a spelling error or incorrect figure, a provision that is no longer relevant, a provision where circumstances have changed.
Do you need to plead equitable set off?
In my judgment, if there is an equitable set off, there is no need for a pleading that says so, because whether there is a set off is determined as a matter of law, and it is not necessary to plead matters of law, only matters of fact: see Hanak v Green per Morris LJ (with whom Hodson LJ agreed).
What is the purpose of price adjustment?
The purpose of price adjustment is to protect the parties against unexpected price escalations, so they should be included whenever a contract is vulnerable to such risks. This guidance note discusses the application of price adjustment provisions in contracts for goods, works, and plant.
What is the purpose of a price adjustment clause?
Price adjustment clauses are most often incorporated into long term contracts, wherein the price of inputs, labour, or otherwise is expected to change over the length of the contract.
How price adjustment is calculated?
The price adjustment equation summarizes, at the level of an entire economy, all the decisions about prices that are made by managers throughout the economy. The price adjustment equation is as follows: inflation rate = autonomous inflation − inflation sensitivity × output gap.
What are the three types of equitable remedies?
There are three types of equitable remedies: specific performance, injunction, and restitution.
What are the 5 equitable remedies?
Equitable RemediesInjunction.Specific performance.Delivery up and cancellation of documents.Rectification.Rescission.Order for an account.
What is an example of equitable relief?
Equitable relief is usually a remedy for a breach of contract or in cases of intellectual property theft. A common form of equitable relief is the canceling of a contract, which ends all terms and obligations, allowing both parties to return to their pre-contract status.
What is the best method to calculate an equitable adjustment when a contractor?
Most equitable adjustments should be determined under the reasonable cost method. This method is the most widely used and preferred by the courts and boards. Reasonable cost is determined by the difference between the contractor's: Cost of original work.
What is equitable adjustment in trust?
8 Under the equitable adjustment power, when dealing with a trust pursuant to which distributions are determined in reference to fiduciary accounting income, a trustee may adjust between income and principal, as long as it's administered “impartially” and based on what's “fair and reasonable” to all the beneficiaries.
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 is the simplified acquisition threshold 2022?
Simplified Acquisition Thresholds (SAT) The Simplified Acquisition Threshold (SAT) (FAR 2.101) is $250,000.
What is a 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. Typically, when the contractor discovers some unexpected problem that is not contemplated by the contract, the contractor and the CO will negotiate a solution, with the contractor receiving an increase in the contract price in exchange for performing this new work. An REA is the contractor’s first option when the parties cannot come to an agreement, because the Government believes that the additional work is already covered by the contract. In the REA, the contractor lays out in detail why the Government is wrong and why the additional work that the CO is demanding of the contractor is not already covered by the contract. If the CO agrees, the parties enter a new contract modification.
What is a REA in a contract?
When a contractor submits a REA, he is asking the CO to unilaterally adjust the contract price pursuant to his authority under the contract’s “Changes” clause. The exact clause differs depending on the type of contract: 48 C.F.R. § 52.243-1 (Fixed Price), 52.243-2 (Cost Reimbursement), 52.243-3 (Time and Materials). If for whatever reason the contract does not have a changes clause, courts may nevertheless read the changes clause into the contract, pursuant to the Christian Doctrine. These Changes clauses also create obligations for the contractor. For example, if the contractor believes it is entitled to an equitable adjustment and the CO disagrees, the contractor has thirty (30) days to “assert its rights to an adjustment.” Courts and boards, however, do not strictly construe this requirement unless the untimely notice is prejudicial to the government. Watson, Rice & Co., HUD BCA No. 89-4468-C8, 90-1 BCA ¶ 22,499; SOSA Y Barbera Constrs., S.A., ENG BCA No. PCC-57, 89-2 BCA ¶ 21,754; E.W. Jerdon, Inc., ASBCA No. 32957, 88-2 BCA ¶ 20,729. Importantly, while the clause requires that the contractor timely assert his right to an adjustment, this does not mean that he must submit the REA in those 30 days. A contractor is free to submit an REA anytime before contract close out. Even after final closeout, a REA is valid if it was pending at the time or if the government had constructive knowledge of the REA. Mingus Constructors, Inc. v. United States, 812 F.2d 1387 (Fed. Cir. 1987). Contractors, though, must be careful not to wait too long. While there is no time limit for a REA, a certified claim must be submitted to the CO within six years of when the contractor knew or should have known about his grounds for adjustment. Otherwise, the certified claim is untimely and outside the jurisdiction of the Boards and COFC.
What documents should be attached to a REA?
Key documents referenced in the REA (such as specifications, correspondence, delay and disruption charts, and expert opinions) should be attached to the REA and submitted therewith.
What is a REA in contracting?
A Request for Equitable Adjustment (REA) is not defined by the Federal Acquisition Regulation (FAR), but is only referenced therein. What then, is an REA? REAs are requests for additional monies or time based on contract clauses that provide for such relief, for instance the Changes clause of the contract ]
Is there a set form for a REA?
There is no set form for an REA, but generally a good REA will check the following boxes:
What is equitable adjustment?
In government contracts, the FAR definition of equitable adjustment refers to an adjustment that pays you for work that is directed by the agency. When companies choose this route for compensation, there may be a statutory confusion between the requirements for a Contract Disputes Act (CDA) claim and the process for the agency to follow in an REA ...
What is equitable adjustment in federal procurement?
What is equitable adjustment in federal procurement? In government contracting, the contracting officer complies with the “equitable definition” and meaning by adjusting the contract requirements or price in accordance with the changes clause. The goal is to make the contractor whole and to compensate it for profit allowances if any. See Government Contracts & Mandatory FAR Flow Down Clauses to Subcontractors The FAR does not define a Request for Equitable Adjustment (REA) Acquisition Regulation but only references it. REAs include a contractor’s request for additional compensation or additional time based on relevant contract clauses. An example of an REA occurs under the Changes clause of the contract or FAR clause for the Differing Site Conditions.
What does "far adjustment" mean in government contracts?
The FAR Adjustment definition in government contracts can also mean a reduction in the overall contract price. Often times, end-users and contracting officer representatives instruct you to do additional work or change the terms and conditions ...
Is a REA a claim?
Submitting an REA does not automatically constitute a claim under the Contract Disputes Act until such time as the parties reach an impasse (firm disagreement). This is a factual basis that a lawyer should be able to help you with.
Difference Between Request For Equitable Adjustment and Claim
- REAs and claims can be used in similar terms only if referred to from a financial (non-legal) standpoint. For instance, both are used to execute an adjustment to a contract in terms of money, time, or another appropriate aspect of the contract. However, the terms are different from a legal standpoint (allowable costs, court jurisdiction, etc.). Cla...
Request For Equitable Adjustment Process
- 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 y…
Contract Change Clauses
- When initially developing a contract, the contracting offer should insert a “Change Clause” to address any changes that might arise during the execution of the contract. This clause will allow for a REA and is prescribed in the following: 1. Fixed Price: 48 C.F.R. 52.243-1 2. Cost Reimbursement: 48 C.F.R. 52.243-2 3. Time and Materials: 48 C.F.R. 52.243-3
Rs 252.243-7002 Requests For Equitable Adjustment
- (a) The amount of any request for equitable adjustment to contract terms shall accurately reflect the contract adjustment for which the Contractor believes the Government is liable. The request shall include only costs for performing the change, and shall not include any costs that already have been reimbursed or that have been separately claimed. All indirect costs included in the re…
Acqlinks and References
- Website: DAU REA
- Website: DFARS 252.243-7002 Requests for Equitable Adjustment
- Website: GSAM 552.243-71 Equitable Adjustments
- Website: 48 CFR § 552.243-71 – Equitable Adjustments