Modifying a Government Contract – It’s a Team Sport

Each member’s position/role within the Acquisition Team will determine the role they play for any contract modification.

With the exception of only the simplest, most straightforward commercial purchases, most government contracts will need to be modified at least once during their performance timeframes. A contract is a two-party agreement that spells out each party’s obligations to the other. Generally, the government obligates itself to pay the contractor in exchange for the contractor providing certain services and/or goods — that the government has determined it needs to fulfill some aspect of its mission objectives.

The fact that the government and contractor may subsequently decide to alter one or more aspects of the originally stated mutual obligations, i.e., modify the contract, does not generally mean that there was some sort of mistake in the original terms.

In fact, as I recently touched on when writing about solicitation amendments and unilateral vs. bilateral contract modifications (mods), government contracts often explicitly contemplate at least some mods for pre-planned purposes, such as options to “add” to the original contract or provide additional funds when needed to enable completing all mutual obligations as written in the basic contract award.

Briefly resurrecting my previous football analogy, the customer/program or project manager/requirement owner (RO) serves as “quarterback” who decides that a contract modification is the correct “play” to ensure that the contract will successfully continue to meet the underlying agency mission objectives — that is, that a specific contract will be in the best interests of the agency. Meanwhile, the contracting officer (CO) — the sole individual warranted to execute a mod — is like the runner or receiver who must carry the ball (the mod) across the goal line.

Just as the remaining nine on-field players contribute in various ways to the success of any football play, various acquisition team roles must be involved in successfully modifying a government contract. The roles needed will vary with the specific purpose of the mod. Below are some required actions, and who’s responsible for them.

1. Making an administrative change that does not affect the contractor’s rights or duties:

• • The CO/contracts team may identify and correct a typo or other error in preparation, often without other teammates.
  • A funds identification issue, e.g., “long line of accounting” typo, will be identified or validated by a finance office official.
  • Replacing the assigned contracting officer’s representative (COR) requires a new RO nomination and the new COR to participate in processing such mods.

2. Adding or deleting funds, either as a funding-only modification or in conjunction with mods listed in sections 3 and below:

• • The RO must identify the availability of needed additional funds from its budget resources.
  • The identified funds must be validated by a finance office official.
  • Ultimately, the contractor must agree that revised funding totals will be sufficient for the modified contract requirement.

3. Revising performance detailed requirements within the contract scope:

• • Either the contractor or government programmatic/technical support personnel may propose changes to improve accomplishment of the ultimate mission objectives or in reaction to emergent government needs/priorities.
  • Funding revisions usually will ensue, requiring the participants identified in section 2, above.
  • Legal counsel review/advice may be needed or prudent.

4. Adding performance requirements, i.e., additional quantities/duration of service performance:

• Exercising an existing option
  • The COR/similar official documents satisfactory or better performance and a continuing need for the additional requirement defined as an option.
  • Appropriate funding is identified/validated as per section 2 above.

• Increasing quantities or adding “more of the same” services

NOTE: This is a “new – sole source – procurement” added to the existing contract for administrative convenience or for performance efficiency.

• • RO/technical advisors initiate sole source justification and related new procurement documentation.
  • Legal and small business office representatives’ reviews are required, as with any new procurement.
  • Appropriate funding identified/validated as per section 2 above.

It should be clear that the RO/quarterback calling the plays — and the CO carrying the ball — need the efforts of teammates, i.e., functional specialists who may not even recognize themselves as Acquisition Team members. But their functional expertise and efforts, applied when specifically needed, is critical to successful execution of a government contract modification that ensures achievement of underlying mission objectives.

As the Seventh Sense Consulting LLC (SSC) Director of Acquisition Practice, Mr. Patrick Shields has over 45 years of experience as an acquisition/contracting professional and innovative leader. As a Navy Department civilian, he was a major weapons systems contracting officer and manager. Since his civil service retirement, with 2 firms he has provided subject matter expertise support to numerous Federal civilian and DoD organizations, including acquisition strategy/documentation support for key acquisitions, policy development, and personnel training. He also managed a subscription “ask the expert” response team and authored numerous topical publications for over 25,000 professional employees of subscribing agencies.

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