FAR and DFARS › FAR Part 43: Contract Modifications › Subpart 43.2
FAR 43.203 Change order accounting procedures.
The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.
In plain English
This section explains that contractors' accounting systems often cannot separate the costs of changed work, so contracting officers should warn prospective contractors that they may need to revise their accounting procedures to meet the cost segregation requirements of the Change Order Accounting clause. It also lists the categories of direct costs that are normally segregable and accountable under that clause.
Applies to: Prospective contractors submitting offers on contracts that may involve change orders
Key terms: Change Order Accounting clause · cost segregation requirements · direct costs · nonrecurring costs · recurring work
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) Contractors' accounting systems are seldom designed to segregate the costs of performing changed work. Therefore, before prospective contractors submit offers, the contracting officer should advise them of the possible need to revise their accounting procedures to comply with the cost segregation requirements of the Change Order Accounting clause at 52.243-6.
(b) The following categories of direct costs normally are segregable and accountable under the terms of the Change Order Accounting clause:
(1) Nonrecurring costs (e.g., engineering costs and costs of obsolete or reperformed work).
(2) Costs of added distinct work caused by the change order (e.g., new subcontract work, new prototypes, or new retrofit or backfit kits).
(3) Costs of recurring work (e.g., labor and material costs).
Sections it refers to
- 52.243-6 Change Order Accounting.
← 43.202 Authority to issue change orders. · 43.204 Administration. →
Rule changes for FAR Part 43
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2025-08-07 · effective 2025-08-07
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.