Constructive Changes: Recognition, Examples, and Requests for Equitable Adjustment
Constructive change is a judicially developed doctrine that reconciles the government’s authority to direct performance with a contractor’s right to be made whole when performance is expanded without a formal change order. Although the FAR’s Changes clauses govern written, within-scope modifications, constructive changes arise when government conduct—actions, inactions, or communications—effectively requires additional work beyond the contract as awarded. The FAR’s “Notification of Changes” clause explicitly anticipates such situations by directing contractors to notify the contracting officer of any government conduct they regard as a change.
The evidentiary core of a constructive change claim rests on several familiar elements. First, there must be added or altered work; second, the added work must be caused by the government; third, the contracting officer must have actual or constructive knowledge of the conduct; and, fourth, the contractor must provide timely notice. These requirements both ground the contractor’s entitlement and give the government an opportunity to mitigate costs or formalize the direction through a modification.
Examples recur across contract types. Overzealous inspection can force performance to standards beyond the statement of work, creating unpriced tasks. Acceleration may occur when the government contributes to delay but insists that the original schedule be met, effectively compressing performance at additional cost. Defective specifications can compel redesign or rework when government drawings or data are later shown to be erroneous. Nondisclosure of vital information—material facts about site conditions, legacy systems, or security constraints—can similarly expand performance. Even disagreements in contract interpretation can become constructive changes when the government’s interpretation enlarges the contractor’s obligations beyond what was reasonably contemplated at award.
Recognition and early management are decisive. An event-oriented approach trains personnel to spot potential changes in real time, open a separate cost collection job number, and contemporaneously record labor, materials, and delay impacts. This posture reduces the risk of untimely claims and preserves evidence for negotiation or litigation if needed.
Once a constructive change is identified, the practical pathway is to translate the facts into a request for equitable adjustment (REA). An effective REA states a sum certain, anchors causation in the government’s conduct, and ties cost and schedule impacts to contemporaneous records. It should narrate a straightforward, unemotional statement of facts and attach corroborating documents—daily reports, inspection notes, correspondence, and cost ledgers—organized to show that the additional work was both compelled and reasonable. Even where the contractor believes a breach theory might yield broader recovery, the constructive-change/REA framework often promotes negotiation while preserving the relationship.
If the REA is denied or stalls, the matter can be elevated to a Contract Disputes Act claim. Claims must be in writing and submitted to the contracting officer; when the amount exceeds $100,000, the claim must be certified in the precise form set out in FAR 33.207(c) by an individual authorized to bind the company. Certification defects delay, but do not necessarily defeat, recovery. Upon receipt of a certified claim, the contracting officer must decide within sixty days or state a date certain by which a decision will issue; failure to issue a timely decision is deemed a denial. Interest runs from the date the claim is received, and the contractor retains the duty to proceed diligently with performance pending resolution.
Submission quality matters. In addition to the statement of facts and pricing logic, contractors should consider targeted requests for government records—such as a FOIA request—to close gaps in the evidentiary record. A concise legal analysis section can then link the facts to the Changes clause, the Notification of Changes clause, and the constructive-change case law, while anticipating likely affirmative defenses (notice, accord and satisfaction, or privity issues in the subcontracting context). These measures position the claim for negotiation, alternative dispute resolution, or, if necessary, appeal to a board of contract appeals or the U.S. Court of Federal Claims after a final decision.
Ultimately, constructive changes are about controlled escalation. Rapid notice under FAR 52.243-7, disciplined cost segregation, and a well-documented REA give the contracting officer what is needed to issue an equitable adjustment; if that fails, the CDA provides a structured route to decision with interest protection and defined appeal rights.
Disclaimer: This article is for information only and does not constitute legal advice. Although care has been taken to ensure accuracy, readers should consult qualified counsel or contracting professionals regarding specific facts and circumstances.