FAR 52.243-2—Changes-Cost-Reimbursement.
Plain-English Summary
FAR 52.243-2, Changes—Cost-Reimbursement, gives the Contracting Officer authority to direct certain unilateral changes within the general scope of a cost-reimbursement contract and sets the process for pricing and documenting the resulting equitable adjustment. The clause covers what kinds of changes may be ordered, including changes to drawings, designs, or specifications for specially manufactured supplies; method of shipment or packing; place of delivery; and, in the alternate versions, changes to services, time of performance, place of performance, construction plans and specifications, and certain research and development requirements. It also explains when the contractor must seek an adjustment, how disputes over the adjustment are handled, and the contractor’s duty to continue performance despite disagreement. A key feature of the clause is that it does not itself increase the estimated cost or funded amount of the contract; any increase must be made by a separate written modification, and until that happens the contractor is limited by the Limitation of Cost or Limitation of Funds clause. In practice, this clause is the main mechanism for managing government-directed changes on cost-reimbursement contracts while preserving orderly pricing, funding control, and contract administration.
Key Rules
CO may order changes
The Contracting Officer may issue a written order, without notice to sureties, making changes within the general scope of the contract. The authority is limited to the specific categories listed in the applicable paragraph (a) or alternate version.
Changes must stay in scope
The clause only covers changes within the general scope of the contract. A change that goes beyond scope is not authorized under this clause and may require a different procurement action or contract modification authority.
Equitable adjustment required
If a change increases or decreases estimated cost, time required, or otherwise affects contract terms, the Contracting Officer must make an equitable adjustment. The adjustment may affect estimated cost, schedule, fixed fee, and other impacted terms, and the contract must be modified accordingly.
Contractor must timely assert claim
The contractor must assert its right to an adjustment within 30 days after receiving the written order, unless the Contracting Officer allows a later proposal before final payment. Missing the deadline can jeopardize recovery unless the CO accepts a late submission.
Disputes do not stop performance
If the parties cannot agree on the adjustment, the matter is a dispute under the Disputes clause. Even so, the contractor must continue performing the contract as changed and cannot refuse to comply while the pricing issue is being resolved.
Funding limits remain controlling
The clause does not itself increase the estimated cost or, for incrementally funded contracts, the funds allotted. Any increase must be made by specific written modification, and until then the contractor is not required to continue beyond the point established by the Limitation of Cost or Limitation of Funds clause.
Alternate versions tailor the clause
The alternate paragraphs adjust the types of changes allowed based on contract type: services-only, services with supplies, construction, and certain R&D contracts. Users must apply the correct alternate to match the contract’s work and avoid relying on inapplicable change authority.
Responsibilities
Contracting Officer
Issue only written change orders within the general scope of the contract; determine whether a change affects cost, schedule, fee, or other terms; negotiate or determine an equitable adjustment; and execute the required contract modification, including any funding increase or revised estimated cost.
Contractor
Comply with the written change order and continue performance; timely assert the right to an equitable adjustment within 30 days unless a later submission is accepted; prepare and submit a supportable adjustment proposal; and monitor funding limits so performance does not exceed the Limitation of Cost or Limitation of Funds threshold without proper modification.
Agency/Contracting Activity
Use the correct clause version or alternate for the contract type; follow agency procedures that may vary the 30-day submission period; and ensure contract administration practices support timely funding, documentation, and modification of changed work.
Sureties, if any
No affirmative duty is imposed by the clause, but they are not entitled to prior notice of the change order under this clause.
Practical Implications
This clause is the government’s standard tool for directing changes on cost-reimbursement contracts, so contractors should expect formal written change orders and should not treat informal direction as sufficient authority without documentation.
The 30-day adjustment request deadline is a common trap; contractors should track receipt dates carefully and submit at least a preliminary claim or proposal quickly, even if full pricing support is still being developed.
A change order does not automatically mean more money or more funded ceiling. Contractors must watch the separate written modification that actually revises estimated cost or allotted funds, especially on incrementally funded contracts.
Because disputes do not suspend performance, contractors must keep working while preserving their rights to compensation through proper notice, documentation, and negotiation.
Selecting the wrong alternate clause or misreading the scope of the authorized changes can create administration problems, especially for service, construction, or R&D contracts where the change authority differs from the basic clause.
Official Regulatory Text
As prescribed in 43.205 (b)(1) , insert the following clause. The 30-day period may be varied according to agency procedures. Changes-Cost-Reimbursement (Aug 1987) (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following: (1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications. (2) Method of shipment or packing. (3) Place of delivery. (b) If any such change causes an increase or decrease in the estimated cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer shall make an equitable adjustment in the- (1) Estimated cost, delivery or completion schedule, or both; (2) Amount of any fixed fee; and (3) Other affected terms and shall modify the contract accordingly. (c) The Contractor must assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract. (d) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed. (e) Notwithstanding the terms and conditions of paragraphs (a) and (b) of this clause, the estimated cost of this contract and, if this contract is incrementally funded, the funds allotted for the performance of this contract, shall not be increased or considered to be increased except by specific written modification of the contract indicating the new contract estimated cost and, if this contract is incrementally funded, the new amount allotted to the contract. Until this modification is made, the Contractor shall not be obligated to continue performance or incur costs beyond the point established in the Limitation of Cost or Limitation of Funds clause of this contract. (End of clause) Alternate I (Apr 1984) . If the requirement is for services and no supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic clause: (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following: (1) Description of services to be performed. (2) Time of performance ( i.e., hours of the day, days of the week, etc.). (3) Place of performance of the services. Alternate II (Apr 1984) . If the requirement is for services and supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic clause: (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following: (1) Description of services to be performed. (2) Time of performance ( i.e., hours of the day, days of the week, etc.). (3) Place of performance of the services. (4) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications. (5) Method of shipment or packing of supplies. (6) Place of delivery. Alternate III (Apr 1984) . If the requirement is for construction, substitute the following paragraph (a) for paragraph (a) of the basic clause: (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in the plans and specifications or instructions incorporated in the contract. Alternate IV [Reserved] Alternate V (Apr 1984) . If the requirement is for research and development, and it is desired to include the clause, substitute the following paragraphs (a)(1) and (a)(3) for paragraphs (a)(1) and (a)(3) of the basic clause: (a) *** (1) Drawings, designs, or specifications. (3) Place of inspection, delivery, or acceptance.