FAR 43.205—Contract clauses.
Plain-English Summary
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.
Key Rules
Fixed-Price Changes Clause
When a fixed-price contract for supplies is contemplated, the contracting officer must insert 52.243-1, Changes-Fixed-Price. The required alternate depends on the work type, such as services with or without supplies, architect-engineer or other professional services, transportation services, or research and development.
Cost-Reimbursement Changes Clause
When a cost-reimbursement contract for supplies is contemplated, the contracting officer must insert 52.243-2, Changes-Cost-Reimbursement. Different alternates apply for services with or without supplies, construction, and optionally research and development.
T&M and Labor-Hour Clause
For time-and-materials or labor-hour contracts, the contracting officer must use 52.243-3, Changes-Time-and-Materials or Labor-Hours. The contracting officer may vary the 30-day period in paragraph (c) of the clause, but only in accordance with agency procedures.
Construction and Demolition Clause
For dismantling, demolition, or removal of improvements, and for fixed-price construction contracts expected to exceed the simplified acquisition threshold, the contracting officer must insert 52.243-4, Changes. This clause is the standard changes authority for those larger construction-related acquisitions.
Smaller Construction Clause
For construction contracts not expected to exceed the simplified acquisition threshold, the contracting officer must insert 52.243-5, Changes and Changed Conditions. This clause specifically addresses changed conditions in smaller construction acquisitions.
Change Order Accounting
The contracting officer may include a clause substantially the same as 52.243-6, Change Order Accounting, when numerous changes are anticipated in technically complex supply or research and development contracts, and may also use it in construction if appropriate. This is discretionary and intended to improve accounting for frequent changes.
Responsibilities
Contracting Officer
Select and insert the correct changes clause and alternate based on contract type, work category, and whether supplies are included. Ensure the clause matches the contemplated acquisition, apply agency procedures when varying the T&M/labor-hour 30-day period, and decide whether change order accounting is appropriate when numerous changes are expected.
Contractor
Review the included changes clause and alternate to understand the Government’s change authority, the pricing and documentation rules for changes, and any special treatment for changed conditions or change order accounting. The contractor must administer work and claims in accordance with the clause actually included in the contract.
Agency
Establish procedures, where applicable, for varying the 30-day period in the T&M/labor-hour clause and provide acquisition guidance to ensure consistent clause selection. Agencies should also support contracting officers in determining when change order accounting is appropriate.
Practical Implications
Clause selection is not one-size-fits-all; the wrong alternate can create ambiguity about what the Government may change and how the contractor gets paid for the change.
Construction contracts have a special split: larger fixed-price construction uses 52.243-4, while smaller construction uses 52.243-5, so the expected dollar value matters.
T&M and labor-hour contracts require attention to the 30-day period in the clause, because agencies may adjust it only through their procedures.
Change order accounting is optional, but it can be very useful when many technical changes are expected; if omitted in a highly change-prone contract, administration can become harder.
Contractors should verify the clause package during proposal review and award because change rights, notice requirements, and equitable adjustment procedures can differ materially by clause and alternate.
Official Regulatory Text
(a) (1) The contracting officer shall insert the clause at 52.243-1 , Changes-Fixed-Price, in solicitations and contracts when a fixed-price contract for supplies is contemplated. (2) If the requirement is for services, other than architect-engineer or other professional services, and no supplies are to be furnished, the contracting officer shall use the clause with its AlternateI. (3) If the requirement is for services (other than architect-engineer services, transportation, or research and development) and supplies are to be furnished, the contracting officer shall use the clause with its AlternateII. (4) If the requirement is for architect-engineer or other professional services, the contracting officer shall use the clause with its AlternateIII. (5) If the requirement is for transportation services, the contracting officer shall use the clause with its AlternateIV. (6) If it is desired to include the clause in solicitations and contracts when a research and development contract is contemplated, the contracting officer shall use the clause with its Alternate V. (b) (1) The contracting officer shall insert the clause at 52.243-2 , Changes-Cost-Reimbursement, in solicitations and contracts when a cost-reimbursement contract for supplies is contemplated. (2) If the requirement is for services and no supplies are to be furnished, the contracting officer shall use the clause with its AlternateI. (3) If the requirement is for services and supplies are to be furnished, the contracting officer shall use the clause with its AlternateII. (4) If the requirement is for construction, the contracting officer shall use the clause with its AlternateIII. (5) [Reserved] (6) If it is desired to include the clause in solicitations and contracts when a research and development contract is contemplated, the contracting officer shall use the clause with its Alternate V. (c) Insert the clause at 52.243-3 , Changes-Time-and-Materials or Labor-Hours, in solicitations and contracts when a time-and-materials or labor-hour contract is contemplated. The contracting officer may vary the 30-day period in paragraph (c) of the clause according to agency procedures. (d) The contracting officer shall insert the clause at 52.243-4 , Changes, in solicitations and contracts for- (1) Dismantling, demolition, or removal of improvements; and (2) Construction, when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold. (e) The contracting officer shall insert the clause at 52.243-5 , Changes and Changed Conditions, in solicitations and contracts for construction, when the contract amount is not expected to exceed the simplified acquisition threshold. (f) The contracting officer may insert a clause, substantially the same as the clause at 52.243-6 , Change Order Accounting, in solicitations and contracts for supply and research and development contracts of significant technical complexity, if numerous changes are anticipated. The clause may be included in solicitations and contracts for construction if deemed appropriate by the contracting officer.