FAR 43.102—Policy.
Plain-English Summary
FAR 43.102 states the basic policy for who may make contract changes and how those changes should be handled before they are issued. It covers the authority to execute contract modifications, limits on the actions of non-contracting personnel, the prohibition on creating apparent authority or directing work outside the modification process, and the pricing of modifications before execution. It also addresses the special case where a modification could cause a significant cost increase and there is not enough time to negotiate a full price, in which case a ceiling price should be negotiated unless that is impractical. In practice, this section protects the Government from unauthorized commitments, scope creep, and avoidable cost growth, while giving contractors a clear rule: only a contracting officer can bind the Government through a modification. It is a core control point for contract administration because it ties authority, pricing, and timing together before work changes are implemented.
Key Rules
Only COs may modify
Only contracting officers acting within the scope of their authority may execute contract modifications for the Government. Any modification signed or issued by someone without that authority is not binding on the Government.
No unauthorized direction
Other Government personnel may not execute modifications, create the impression they can bind the Government, or direct or encourage work that should be handled through a modification. This prevents informal instructions from becoming de facto contract changes.
Price before execution
Contract modifications, including those that could be issued unilaterally, should be priced before they are executed if doing so will not harm the Government’s interests. The policy favors resolving price impacts up front rather than after the change is already in effect.
Negotiate a ceiling if needed
If a modification could cause a significant cost increase and there is not enough time to agree on a final price, the parties should negotiate at least a ceiling price unless that is impractical. This limits the Government’s exposure while the final pricing is worked out.
Protect Government interests
The pricing and timing rules are not absolute; they are conditioned on whether pre-execution pricing can be done without adversely affecting the Government. The contracting officer must balance speed, mission needs, and cost control.
Responsibilities
Contracting Officer
Ensure only authorized modifications are executed, control the modification process, avoid unauthorized commitments, and price modifications before execution when practicable. When a significant cost increase is possible and time is short, negotiate a ceiling price unless that is impractical.
Other Government Personnel
Do not sign or issue contract modifications, do not imply they have authority to bind the Government, and do not direct contractors to perform changed work outside the proper modification process.
Contractor
Rely only on authorized contracting officer actions for contract changes, seek written modification before performing changed work, and be alert to informal directions from non-CO personnel that do not bind the Government.
Agency
Maintain internal controls and training so personnel understand modification authority limits, prevent unauthorized commitments, and support timely pricing and approval of contract changes.
Practical Implications
Contractors should not start changed work based on emails, verbal directions, or instructions from program or technical staff unless a contracting officer has issued or authorized the change.
A common pitfall is apparent authority: even if a Government employee seems to have influence, that does not make them authorized to bind the Government.
Contracting officers should try to settle price impacts before issuing a modification, especially when the change is likely to increase costs, because post-performance pricing disputes are harder to manage.
When time is tight, a ceiling price can preserve flexibility while capping exposure, but it should be used thoughtfully and documented well.
This section is a key safeguard against unauthorized commitments and scope creep; both contractors and Government personnel should route change requests through the contracting officer early.
Official Regulatory Text
(a) Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government. Other Government personnel shall not- (1) Execute contract modifications; (2) Act in such a manner as to cause the contractor to believe that they have authority to bind the Government; or (3) Direct or encourage the contractor to perform work that should be the subject of a contract modification. (b) Contract modifications, including changes that could be issued unilaterally, shall be priced before their execution if this can be done without adversely affecting the interest of the Government. If a significant cost increase could result from a contract modification and time does not permit negotiation of a price, at least a ceiling price shall be negotiated unless impractical.