Contracts & Legal

Request for Equitable Adjustment (REA)

A Request for Equitable Adjustment (REA) is an official request from a contractor to a contracting officer asking for an equitable change to the contract price based on a change to the contract requirements. An REA normally occurs when the contractor finds that an unexpected issue has arisen that wasn’t anticipated during the development of the original contract. The contractor will submit a proposal to the contracting officer outlining the issue and the justification of the equitable adjustment. Most contracts will submit an REA before submitting an official “Claim”. If the contracting officer agrees with the adjustment, the contract is modified.

Difference Between Request for Equitable Adjustment and Claim

REAs and claims can be used in similar terms only if referred to from a financial (non-legal) standpoint. For instance, both are used to execute an adjustment to a contract in terms of money, time, or another appropriate aspect of the contract. However, the terms are different from a legal standpoint (allowable costs, court jurisdiction, etc.). Claims involve legal implications and thus can significantly affect the outcome of a contract. [1]

Request for Equitable Adjustment Process

DoD contracting personnel shall follow this “general” process if receive a REA, claim, or any other non-routine written request asking for an adjustment to a contract:

  • First, determine if the request meets the definition and standards of a claim in accordance with FAR 52.233-1, regardless of what it’s referred to in the document.
  • If it meets the standards of a claim, then you must process it as a claim regardless.
  • If it does not meet the standards of a claim found in FAR 52.233-1:
    • If the contractor has called it a “claim” (or there is some other reason to believe the contractor intends it to be a claim under FAR 52.233-1), reply immediately to the contractor pointing out the item(s) preventing it from being considered a claim, and work with them for further resolution, encouraging non-legal recourse if possible.
    • If the contractor has called it by some other name (e.g., “request for adjustment”, “request for consideration”, etc.), it is more than likely a REA and should be treated as such.

Contract Change Clauses

When initially developing a contract, the contracting offer should insert a “Change Clause” to address any changes that might arise during the execution of the contract. This clause will allow for a REA and is prescribed in the following:

  • Fixed Price: 48 C.F.R. 52.243-1
  • Cost Reimbursement: 48 C.F.R. 52.243-2
  • Time and Materials: 48 C.F.R. 52.243-3

DFARS 252.243-7002 Requests for Equitable Adjustment

(a) The amount of any request for equitable adjustment to contract terms shall accurately reflect the contract adjustment for which the Contractor believes the Government is liable. The request shall include only costs for performing the change, and shall not include any costs that already have been reimbursed or that have been separately claimed. All indirect costs included in the request shall be properly allocable to the change in accordance with applicable acquisition regulations.

(b) In accordance with 10 U.S.C. 2410(a), any request for equitable adjustment to contract terms that exceeds the simplified acquisition threshold shall bear, at the time of submission, the following certificate executed by an individual authorized to certify the request on behalf of the Contractor:

(c) The certification in paragraph (b) of this clause requires full disclosure of all relevant facts, including—

(1) Certified cost or pricing data, if required, in accordance with subsection 15.403-4 of the Federal Acquisition Regulation (FAR); and

(2) Data other than certified cost or pricing data, in accordance with subsection 215.403-5 of the FAR, including actual cost data and data to support any estimated costs, even if certified cost or pricing data are not required.

(d) The certification requirement in paragraph (b) of this clause does not apply to—

(1) Requests for routine contract payments; for example, requests for payment for accepted supplies and services, routine vouchers under a cost-reimbursement type contract, or progress payment invoices; or

(2) Final adjustments under an incentive provision of the contract.

AcqLinks and References

Updated: 4/8/2022

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