NAVY ACQUISITION PROCEDURES SUPPLEMENT
CONTRACT MODIFICATIONS
DoN policy is to avoid the use of contract modifications for additional quantities as a means of purchasing new requirements of supplies, when such a procedure would result in prolonging the life of the contract beyond the time when final settlement would normally be made.
5243.102(90) Requests or claims for equitable adjustments
Whenever a contractor submits cost data in connection with pricing of change orders or repricing of contracts, charges included therein for obsolete or excess residual inventory should be substantiated by the submission of appropriate schedules listing the inventory involved.
(90) The policies and procedures of DFARS 217.74 should be applied to change orders (except value engineering change proposals (VECP's)) to the maximum extent practicable. Each undefinitized change order shall include a not-to-exceed price unless the CCO waives this requirement.
(91) The use of VECP's is encouraged due to the potential savings and system improvements that may be realized.
(a) Prompt action should be taken to implement those VECP's deemed to be technically sound.
(b) When considering VECP's, contracting officers should consider the impact on the projected savings that the normal negotiation and definitization process would have versus use of an unpriced change order. Unpriced contract modifications which implement VECP's should:
(1) Define minimum unit cost savings, and
(2) Define maximum development/implementation costs