Mastering the Art of Writing a Request for Equitable Adjustments

In federal contracting, few tools are as vital—and as misunderstood—as the Request for Equitable Adjustment (REA). Contractors often face unexpected delays, cost increases, or scope changes that jeopardize performance and profitability. An REA offers a structured path to recover these costs, restore balance to the contract, and preserve relationships with contracting officers. Yet drafting a persuasive REA requires more than compiling invoices; it calls for a disciplined approach grounded in law, evidence, and strategy.

REA vs. Claim: Understanding the distinction

A Claim is defined under FAR 2.101 and the Contract Disputes Act (CDA) as a written demand seeking, as a matter of right, payment in a sum certain, contract interpretation, or other relief. Claims require a Contracting Officer (CO) decision—within 60 days if the amount is at or below $100,000 or within a reasonable period otherwise—and statutory interest begins to accrue when the claim is filed. By contrast, an REA is not expressly defined in the FAR; it springs from change-oriented clauses (e.g., FAR 52.243-4, Changes) and invites negotiation rather than litigation. Preparation and negotiation costs associated with an REA are generally allowable, which is one reason many contractors start with an REA when agency relationships are constructive. When negotiations stall or entitlement is disputed, a properly certified Claim may be the better path.

The two pillars: Entitlement and quantum

Every successful REA stands on two pillars: entitlement and quantum.

  • Entitlement establishes the government’s liability—linking a change, directive, or other government-caused event to the impact on performance. The contractor must show liability, causation, and resultant injury.

  • Quantum proves the amount of adjustment with evidence that costs are reasonable, necessary, and directly attributable to the government’s action. Think of this as proving both the “cause” and the “effect.”

What costs can be recovered?

Recoverable items are broader than many teams expect. Depending on the facts and clauses in play, REAs may include: idle equipment or facilities, increased material or wage rates, loss of efficiency, unusually severe weather, insurance and bonding expenses, protection and storage of materials, demobilization/remobilization, unabsorbed overhead, and proposal preparation costs. The key is contemporaneous documentation and a clear causal chain to the government’s action or direction.

Build an audit-ready proposal

Treat the REA like a contract proposal. Present:

  • a logical, fact-based narrative of events,

  • a timeline that makes causation easy to follow,

  • a quantified cost impact, and

  • a cost buildup (directs, indirects, fringe, overhead, G&A, and profit).

Expect scrutiny where the dollars are large. Submissions above ~$2 million are more likely to be audited, and Truthful Cost or Pricing Data (TCPD/TINA) obligations may apply. The mantra is documentation—time keeping, production data, correspondence, and cost codes that tie the effect to the cause.

Subcontractor considerations

Primes are responsible for negotiating equitable adjustments with subcontractors and for acting with reasonable promptness. Watch for privity problems if a subcontractor tries to bypass the prime, confirm that subcontracts include equitable-adjustment and notice provisions, and ensure flow-down requirements keep the prime’s REA coherent and defensible.

Choosing the path: start with an REA, be ready to claim

As a practical strategy, most contractors begin with an REA to preserve goodwill and encourage negotiated resolution. When agencies deny entitlement or negotiations stall, a Claim may be necessary. Track deadlines carefully: appeals of denied Claims must be filed within 90 days at a Board of Contract Appeals or within 12 months at the Court of Federal Claims, and Claims are subject to a six-year statute of limitations. When in doubt, start with an REA while watching the clock.

Tips for success

  • Know the contract. Every clause can help or hurt you.

  • Invest in project cost accounting and early cost-code segregation.

  • Engage the CO early, seek written direction, and avoid undocumented “favors.”

  • Be proactive and timely—delays erode credibility and leverage.

  • Maintain disciplined records—even informal contemporaneous notes can carry weight when they’re consistent and complete.

Conclusion

Writing an REA is both art and science: connect cause to effect with a compelling narrative, then prove costs with accounting rigor. Start collaboratively with an REA, but plan for the possibility of a Claim. With the right strategy and documentation, contractors can be made whole while preserving relationships and positioning for future opportunities.


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