FAR 43.2—Subpart 43.2

General.

FAR 43.201 explains the basic mechanics of unilateral contract changes under the Changes clause. It covers when a contracting officer may issue a change order, the normal use of Standard Form 30 (SF 30) to document the modification, the contractor’s duty to keep performing the contract as changed, the special limits that apply to cost-reimbursement and incrementally funded contracts under the Limitation of Cost or Limitation of Funds clauses, and the narrow circumstances in which a change order may be issued electronically without first using an SF 30. In practice, this section matters because it tells both sides how the Government can direct certain changes without bilateral agreement, while also protecting contractors from being forced to perform beyond funding limits in the covered contract types. It also emphasizes that even when speed is necessary, the Government must promptly convert an electronic direction into the formal written modification record. For contracting officers, this is the operational starting point for issuing change orders; for contractors, it is the baseline rule for when performance must continue and when funding limits may stop further work.

Authority to issue change orders.

FAR 43.202 is a short but important authority rule that answers a basic contract administration question: who may issue a change order. It establishes that the contracting officer is the default official with authority to issue change orders, and it recognizes one exception—when that authority has been delegated to an administrative contracting officer under FAR 42.202(c). In practice, this section is about ensuring that only properly authorized government personnel direct contract changes, which protects the validity of the change order process and helps avoid disputes over whether the government actually ordered the work. It also ties directly to contract administration structure, because agencies may use delegation to shift certain administration functions to an ACO while still preserving clear lines of authority. For contractors, the section is a reminder to verify that any change direction comes from the right government official before treating it as binding. For contracting officers and ACOs, it reinforces the need to stay within delegated authority and document that authority clearly.

Change order accounting procedures.

FAR 43.203 explains how change order accounting should work when a contract is modified and the contractor must track the costs of changed work separately from the rest of the contract. It addresses two main topics: first, the contracting officer’s duty to alert prospective contractors, before offers are submitted, that they may need to revise their accounting procedures to meet the cost segregation requirements of the Change Order Accounting clause at 52.243-6; and second, the types of direct costs that are normally segregable and accountable under that clause. Those cost categories include nonrecurring costs such as engineering effort and obsolete or reperformed work, costs of added distinct work caused by the change order such as new subcontract work, prototypes, or retrofit/backfit kits, and recurring costs such as labor and material. In practice, this section exists to make sure changed work can be identified, priced, and settled accurately, rather than being mixed into ordinary contract performance costs. For contractors, it is a warning that their accounting systems may need to be adjusted before award or before changes occur; for contracting officers, it is a reminder to set expectations early so the contractor can comply with later cost-tracking requirements. The section is important because poor segregation of change-related costs can lead to disputes, unsupported equitable adjustments, and delays in negotiating or settling change orders.

Administration.

FAR 43.204 explains how contracting officers and contract administration personnel should administer contract changes after a change order is issued, especially when the change is not yet fully priced. It covers change order documentation, when one document versus two documents are required, how and how quickly equitable adjustments must be definitized, agency tracking of definitization time for construction changes, the need for contracting officer concurrence before an administrative contracting officer adjusts delivery schedules, suspense systems for unpriced change orders, cost analysis and consideration of segregable costs, funding before contract adjustment, field pricing support for requests for equitable adjustment, and the use of complete-and-final settlements with release language. In practice, this section is about turning a directed change into a properly documented contract modification without losing control of schedule, price, funding, or entitlement issues. It is designed to prevent open-ended disputes, ensure timely negotiation, and create a clear administrative record. For contractors, it signals the importance of submitting adequate proposals, segregating costs, and watching for release language that may waive later claims. For contracting officers, it establishes a disciplined process for definitizing changes, coordinating with finance and pricing staff, and closing out change-related issues cleanly.

Contract clauses.

FAR 43.205 tells contracting officers which contract changes clauses must be included in solicitations and contracts, and which alternate versions apply depending on the contract type and the work being acquired. It covers the fixed-price Changes clause at 52.243-1, the cost-reimbursement Changes clause at 52.243-2, the time-and-materials or labor-hours Changes clause at 52.243-3, the construction-related Changes clause at 52.243-4, the construction Changes and Changed Conditions clause at 52.243-5, and the Change Order Accounting clause at 52.243-6. The section also distinguishes among supplies, services, architect-engineer or other professional services, transportation services, research and development, construction, dismantling/demolition/removal, and cost-reimbursement versus fixed-price versus T&M/labor-hour contracting. In practice, this provision is about matching the clause to the contract’s risk profile and work type so the Government has the right authority to direct changes and the contractor knows how changes will be priced, documented, and administered. It matters because using the wrong clause, or the wrong alternate, can create disputes over scope, pricing, changed conditions, and the contractor’s entitlement to an equitable adjustment. It also gives contracting officers limited discretion in two places: varying the 30-day period in the T&M/labor-hour clause under agency procedures, and using change order accounting when numerous changes are anticipated in complex supply, R&D, or construction work.