FAR Part 43: Contract Modifications

In plain English

FAR Part 43 prescribes policies and procedures for preparing and processing contract modifications for all types of contracts, including construction and architect-engineer contracts. It covers the authority to issue modifications, types of modifications, funding requirements, and the use of standard forms. For contractors, it explains how changes are made, the need to continue performance, and the importance of notifying the Government of perceived changes.

Key rules

• Only contracting officers acting within the scope of their authority can execute contract modifications on behalf of the Government; other Government personnel cannot direct or encourage contractors to perform work that should be the subject of a modification. (43.102)
• Contract modifications should be priced before execution if possible; if a significant cost increase could result and time does not permit negotiation, at least a ceiling price should be negotiated unless impractical. (43.102)
• Bilateral modifications are signed by both the contractor and the contracting officer and are used for negotiated equitable adjustments, definitizing letter contracts, and other agreements; unilateral modifications are signed only by the contracting officer and are used for administrative changes, change orders, changes authorized by other clauses, and termination notices. (43.103)
• If a contractor believes the Government has changed the contract without a written modification signed by the contracting officer, the contractor must notify the Government in writing as soon as possible. (43.104)
• The contracting officer cannot execute a modification that increases funds without first obtaining a certification of fund availability, except for certain conditioned contracts or those with a limitation of cost or funds clause. (43.105)
• The contractor must continue performance of the contract as changed, except in cost-reimbursement or incrementally funded contracts where the contractor is not obligated to continue beyond the limits established in the Limitation of Cost or Limitation of Funds clause. (43.201)
• Change orders are issued by the contracting officer, except when authority is delegated to an administrative contracting officer. (43.202)
• The SF 30 is used for amendments to solicitations, change orders, unilateral modifications, administrative changes, supplemental agreements, and removal/reinstatement/addition of funds; if a price change is anticipated, the estimated amount shall not be shown on copies furnished to the contractor. (43.301)

Who does what

In practice

• When you receive a modification, check whether it is signed by the contracting officer; only the contracting officer can bind the Government.
• If you think the Government has changed the contract without a formal modification, notify the contracting officer in writing immediately to protect your rights.
• In cost-reimbursement or incrementally funded contracts, you are not required to continue performance beyond the funding limits stated in the Limitation of Cost or Limitation of Funds clause.
• Be aware that change orders may require you to revise your accounting procedures to segregate costs of changed work.

Common pitfalls

• Do not act on verbal directions from Government personnel other than the contracting officer; they cannot authorize changes, and you may not be paid for unauthorized work.
• Do not assume that a change has not occurred just because you have not received a formal modification; if you perceive a change, notify the Government promptly.
• Do not continue performance beyond funding limits in cost-reimbursement or incrementally funded contracts without a modification increasing funds; you may not be reimbursed for costs incurred beyond those limits.
• Do not expect the estimated price change to be shown on the SF 30 copy you receive; it is intentionally omitted.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.