DOD, GSA, and NASA Provide Additional Guidance for Changing the Scope of Work for Time-and-Materials or Labor-Hour Contracts

April 9, 2013

DOD, GSA, and NASA Provide Additional Guidance for Changing the Scope of Work for Time-and-Materials or Labor-Hour Contracts

On February 28, 2013, the Department of Defense (DOD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) issued a final rule to provide additional guidance for raising the ceiling price or otherwise changing the scope of work for time-and-materials or labor-hour contracts and orders. First, the final rule clarifies that the limitations on time-and-materials contracts found in Federal Acquisition Regulation (FAR) 16.601 also apply to orders. Second, the final rule establishes that prior to an increase in the ceiling price of a time-and-materials or labor-hour contract or order, the contracting officer must conduct an analysis of pricing and other factors to determine whether an increase is in the best interest of the government and document the decision. Third, the final rule requires that entities increasing the price ceiling of a time-and-materials or labor-hour order under the Federal Supply Schedules follow the procedures established in FAR 8.405-6 and 8.402(f) for modification of an order. Fourth, for the procurement of commercial items, the final rule states that when changing the general scope of a time-and-materials or labor-hour contract or order, the contracting officer shall follow the applicable FAR requirements for making such a change. This final rule went into effect April 1, 2013. (78 Fed. Reg. 13766, 2/28/2013.)

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