Contract Change Evaluation

Introduction

Envi Incl has introduced a change in the contract that requires the contracting firm to construct drainage system from residential areas to connect with the main sewerage line. The residential area is newly constructed and, therefore, is not connected to the main sewer line. The cost of constructing the drainage system is not reflected in the cost of the project, as indicated in the RFP. Furthermore, the contracting firm has no capacity and human resources to construct a drainage system (Frey, 2012). The cost for this extra work is way above the cost for the overall project. This paper highlights the administrative process that the contracting firm must undertake to address the changes.

Appropriate Administrative Process to Effect the Change

The contracting firm will form a committee to evaluate effects and implications of the changes on the ability of the firm to carry out the project. In line with FAR 43.204, the contract offer will be required to furnish the contracting firm with Change Order and Supplemental Agreement that shows the implications of the changes to the contracting firm. The two documents must also show that the changes are equitably adjusted in contract terms so that no party is disadvantaged by the changes. The FAR clause on administrative process allows the contracting officer to issue only the Supplemental Agreement to the effect on any changes that are made in the contract (Frey, 2012).  

The team formed will review the provisions of the FAR requirements that are applicable to the contract. One of the issues that will be crucial is whether the firm will be allowed to have a subcontractor to offer the added services of constructing the drainage, given that it has no expertise or resource to do that kind of work. The contracting officer is compelled under the FAR requirements to include a clause in the contract that only has a fixed price on the service costs of the services. The contractor is not under obligation to supply the material for the purposes of accomplishing the work if that was not indicated in the contract. The appointed team will develop a document to outline all the areas that affect the contractor’s ability to offer the requested services (Rumbaugh, 2010).

Administrative and Judicial Process to be Used

The managing board of the contracting firm will appoint a legal team to review the clauses in the contract agreement to offer waste management in the city. The team will prepare a contract evaluation document that indicates the terms of the contract agreement and new changes that the contractor has introduced in the contract agreement. The contract evaluation document will be presented to the contractor with identified areas that need to be addressed before the work commences. Because the contract agreement is already awarded, the contracting agency will be given a certain period of time to comply with the requests that have been made in the contract evaluation document. It may also choose to pay a certain percentage to cover the costs of preparing the contract agreement by the contractor and the whole process starts again. One of the areas is to increase the budget for the project and also allow the contractor to get a subcontractor who has the capacity to offer the additional services (Rumbaugh, 2010).

Soliciting and Awarding Contracts

The FAR requirements stipulate the process of contract soliciting and awarding that requires the contracting firm to indicate all the services that the contractor is expected to offer. It also indicates channels, through which the contract terms may be changed. The contracting firm may not change the terms of contract to the detriment of the contractor. The Standard Specification enables the contracting firm to give additional information about the details of the contract agreement (Rumbaugh, 2010).

The contractor has the responsibility to understand terms of the contract agreement to avoid responding to the RFP that have terms, which are constraining the contractor. The FAR requirements number 33.203 recognizes all the disputes that may arise during awarding of the contract and establishes the requirements and limitations that guide the contractors and the contracting firms. However, this clause does not affect the obligations and rights of the concerned parties to limit the way the disputes are handled and decided under the appeal (Rumbaugh, 2010).

Common Compliance Issues

The contracting agency awarding the contract has the obligation to resolve contractual conflicts in a mutual agreement and through the means that are affordable and convenient to the contractor’s level. The process of resolving any dispute or changes in the conflict must be done before the claim is made. In this case, Envi Incl. has the responsibility to ensure that the changes that are affected in the contract agreement are in best interest of the contracting firm or provide a clause that allows the firm to offer the additional services (Frey, 2012).

1. In order to manage the issues that arise during implementation of the project and provision of the services, there must be a written clause in the contract agreement to specify the roles and responsibilities that the contractor is expected to carry out during the period of the project.
2. It is also recommended that the contractor makes the claims about any responsibility or duty not included in the terms of contract to the contracting firm before resorting to any other measures. It should be done before the period of 6 years after the completion of work. However, the contracting firm and the contractor can agree on a period shorter than six years depending on the scale of the project.

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