Modification of a Government Contract Awarded Following a Competitive Procedure

Abstract

The issue of whether and to what extent a government authority may introduce subsequent changes into a procurement contract signed following a competitive procedure is one of the more practical and problematic questions in the area of procurement law. The article points out the difficulty inherent in this type of change, even if it is made upon mutual consent of the parties.

The article discusses the regulatory regime reached by the courts, under which a later change to a procurement contract is permissible and left to the discretion of the contracting officer (CO). As part of this discretion, the CO can take into account a number of considerations, the main ones being: the extent to which the requested change materially alters the original contract and the extent to which the requested modification could have been anticipated by a reasonable bidder. The article proposes to change this regime on two fronts: first, to adopt a rule by which a change to a contract would be impermissible unless special exceptions exist; second, to allow the CO to take into account a wider variety of considerations in deciding whether or not to permit such change.

Keywords: government, contract, procurement, competitive bidding

JEL Classification: G38, H50, H57, K23