A FAR request for equitable adjustment is the written submission a federal contractor uses to ask the Contracting Officer to restore the financial balance of a contract after the government changes the work, causes delays, or creates conditions that weren’t priced into the bid. It’s grounded in the FAR Changes clauses at 52.243-1 through 52.243-7 and related provisions, and it’s the mechanism that keeps government contracting workable: because the government can unilaterally modify a contract during performance, contractors need a formal path to recover the cost and time those modifications add. Done well, an REA gets you paid through negotiation. Done poorly, it turns into months of dispute that end in a fraction of what you were owed.
When You Can File One
Several situations open the door to an REA, and identifying which one applies shapes everything that follows.
Directed Changes
The clearest trigger. The Contracting Officer issues a written order modifying the specifications, drawings, method of shipment, or delivery schedule. Under FAR 52.243-1, if that change increases or decreases your cost or time to perform, the Contracting Officer “shall make an equitable adjustment in the contract price, the delivery schedule, or both.”1Acquisition.GOV. 48 CFR 52.243-1 – Changes-Fixed-Price “Shall” is not discretionary language.
Constructive Changes
No written change order exists, but government conduct effectively pushes you outside the original scope. An inspector who demands a higher standard of workmanship than the contract requires, oral instructions from a Contracting Officer’s Representative that expand the scope, or overly restrictive readings of ambiguous specifications can all qualify. FAR 52.243-7 covers this scenario and requires you to notify the Administrative Contracting Officer promptly when you identify conduct you regard as a change. The notice must describe the conduct, identify the people involved, and estimate the cost and schedule impact.2Acquisition.GOV. 48 CFR 52.243-7 – Notification of Changes
Constructive Acceleration
You’re entitled to a time extension because of excusable delays, but the government denies your request or ignores it, forcing you to scramble to meet the original completion date. Overtime, extra crews, and compressed scheduling all cost money. To recover it, you have to show the delays weren’t your fault, that you submitted a timely request for a schedule extension, and that the government’s denial or inaction forced you to accelerate. Even a later-granted extension doesn’t wipe out the recovery for money already spent accelerating.
Differing Site Conditions
On construction work, FAR 52.236-2 covers site conditions that differ materially from what the contract described or from what a reasonable contractor would expect. Two categories: conditions that contradict the contract’s own representations (bedrock where the contract indicated soil), and conditions so unusual that nobody doing this type of work would have anticipated them. Notice must go to the Contracting Officer promptly and before you disturb the conditions. Plow through the problem zone before documenting it and you may forfeit the adjustment entirely, because the clause bars recovery without the required written notice.3Acquisition.GOV. 48 CFR 52.236-2 – Differing Site Conditions
Government-Caused Delays
Late government-furnished property, denied access, missing equipment. The idle labor, extended overhead, and cascading disruptions form the basis for an REA. These costs are easy to underestimate: crews sitting idle still draw pay, equipment rentals keep running, and subcontractors may push their own delay claims up to you.
Notice Deadlines You Cannot Miss
Deadlines in government contracting aren’t suggestions. For directed changes under the fixed-price Changes clause, you must assert your right to an adjustment within 30 days of receiving the written change order.1Acquisition.GOV. 48 CFR 52.243-1 – Changes-Fixed-Price The Contracting Officer has discretion to accept a late submission, but banking on that discretion is a gamble most contractors lose. For differing site conditions, notice must come before you disturb the conditions.
Beyond the clause-specific deadlines, there’s a hard outer limit: any claim against the government must be submitted within six years after it accrues.4Office of the Law Revision Counsel. 41 USC 7103 – Decision by Contracting Officer The clock typically starts when you knew or should have known about the basis for the adjustment. Six years sounds generous until you see how quickly a complex project eats through calendar time during performance and close-out.
REA or CDA Claim: Which One to File
This distinction trips up more contractors than any other procedural issue, and getting it wrong costs money. An REA is an administrative request, essentially a negotiation proposal. A claim under the Contract Disputes Act is a legal demand for a sum certain that triggers an adversarial process with formal appeal rights. They aren’t interchangeable, and the practical differences matter.
Preparation costs. The costs of preparing an REA (consultant fees, accounting support, schedule analysis) are generally allowable contract costs under FAR 31.205-33 because REA preparation is treated as contract administration. Convert to a formal CDA claim and those costs become litigation costs, which are unallowable.5Acquisition.GOV. 48 CFR 31.205-33 – Professional and Consultant Service Costs
Certification. An REA exceeding the simplified acquisition threshold (raised to $350,000 in 2025)6Federal Register. Federal Acquisition Regulation Inflation Adjustment of Acquisition-Related Thresholds requires a certification under DFARS 252.243-7002 stating the request is made in good faith and the supporting data is accurate. A CDA claim over $100,000 requires a different, more extensive certification under 41 U.S.C. 7103(b), including that the amount requested accurately reflects what the government owes.7U.S. Department of Defense. DFARS 252.243-7002 – Requests for Equitable Adjustment
Interest. Filing a formal CDA claim starts the interest clock. Interest accrues from the date the Contracting Officer receives the claim until payment, at a rate the Treasury Department resets every six months. An REA sitting on a desk for two years earns you nothing; a certified claim on that same desk accrues interest the entire time.8Office of the Law Revision Counsel. 41 USC 7109 – Interest
The strategic move most experienced contractors follow: start with an REA to preserve the allowability of preparation costs and keep the relationship with the Contracting Officer cooperative. If negotiations stall, convert to a certified claim to start the interest clock and unlock appeal rights. Many draft the REA so it already meets the FAR 2.101 definition of a claim, making conversion a matter of adding the CDA certification rather than rewriting the submission.
What Goes in the Submission
An REA has two components that must each stand on their own: entitlement (why the government owes you) and quantum (how much). Most failed REAs collapse on quantum. Proving the government changed your work is usually the easier half. Proving what that change cost, with enough specificity to survive an audit, is where the real work happens.
Establishing Entitlement
The entitlement narrative links specific government actions to the Changes clause or other FAR provision that authorizes the adjustment. Keep it focused: what did the government do, when did it happen, which contract clause applies, and what work did you perform as a direct result. For constructive changes, the narrative has to be especially detailed because there’s no written change order to point to. Contemporaneous project records, meeting minutes, emails from government personnel, and inspection reports become your primary evidence.
Quantifying the Impact
Cost data must comply with FAR Part 31. A cost is only allowable if it’s reasonable, allocable to the contract, consistent with applicable Cost Accounting Standards or GAAP, permitted by the contract terms, and not barred by any specific FAR limitation. You’re responsible for maintaining records adequate to demonstrate that claimed costs were actually incurred, are allocable, and comply with cost principles. The Contracting Officer can disallow any cost that’s inadequately supported.9Acquisition.GOV. 48 CFR 31.201-2 – Determining Allowability
A typical cost breakdown includes direct labor hours (with rates tied to payroll records), material costs (with receipts and purchase orders), subcontractor costs (with their own supporting documentation), equipment charges, applicable overhead, and profit. Each line item needs a paper trail running back to the actual expenditure. A structured spreadsheet helps both the government reviewer and any subsequent auditor tie your numbers to your records.
Indirect Costs and Profit
Indirect costs must be allocated using methods consistent with your existing accounting system and any applicable Cost Accounting Standards. Switching allocation methods mid-contract to inflate a particular REA is exactly what auditors are trained to catch. For profit on the changed work, the Contracting Officer looks at contractor effort, cost risk, and past performance. On smaller modifications involving the same type of work as the base contract, the CO may simply apply the profit rate used in the original pricing. Statutory caps apply to certain contract types: 10 percent for most cost-plus-fixed-fee contracts and 15 percent for experimental or research work.10Acquisition.GOV. 48 CFR 15.404-4 – Profit
Schedule Impact Analysis
If you’re asking for a time extension, include a schedule analysis showing how the government’s action affected the critical path. A side-by-side comparison of the baseline and impacted schedules is the standard approach. It’s not only about more time. Without a demonstration that a delay pushed out the critical path, you may face liquidated damages for late delivery that shouldn’t have been assessed. Time-impact analyses are often the most technically demanding piece of an REA, and this is one area where a scheduling consultant tends to pay for itself.
What You Can and Can’t Recover
Not everything you spend on an REA is reimbursable. Preparation costs, including consultant and professional service fees, are generally allowable under FAR 31.205-33 as long as they’re reasonable, supported by detailed invoices showing time expended and services provided, and not contingent on recovery.5Acquisition.GOV. 48 CFR 31.205-33 – Professional and Consultant Service Costs That last point catches contractors off guard: a consultant hired on a contingency-fee basis (paid only if you recover) produces an unallowable fee regardless of how reasonable the amount is.
Costs that are expressly unallowable under FAR Part 31 (entertainment, alcoholic beverages, lobbying) stay unallowable even if they were somehow connected to the changed work. Including unallowable costs in a billing or claim violates the regulation and can trigger consequences well beyond simple disallowance.11Acquisition.GOV. FAR Part 31 – Contract Cost Principles and Procedures
Keep Working While the REA Is Pending
You cannot stop work. The FAR Disputes clause (52.233-1) requires you to “proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract.”12Acquisition.GOV. 48 CFR 52.233-1 – Disputes Stopping work because you disagree with the government’s position, or because your REA hasn’t been resolved, is a default, and the government can terminate you for it. The obligation continues through the formal claim and appeal process. You keep performing; you fight over the money separately.
What Happens After You Submit
Once your package is with the Contracting Officer, the government runs a technical evaluation and cost analysis to test whether the claimed amounts match the actual impact. FAR 43.204 directs Contracting Officers to negotiate equitable adjustments “in the shortest practicable time,” with field pricing support when the review calls for it.13Acquisition.GOV. 48 CFR 43.204 – Administration In practice, “shortest practicable time” can stretch to months depending on complexity and CO workload.
Expect back-and-forth. The Contracting Officer will ask for clarifications, challenge specific line items, and may bring in technical experts or auditors to verify labor hours and material costs. That’s normal at the REA stage. Most adjustments get resolved through this process without ever becoming formal disputes.
When the parties agree, the government issues a contract modification on Standard Form 30 updating price, delivery schedule, or both.14Acquisition.GOV. 48 CFR 53.243 – Contract Modifications (SF 30) Read the modification language carefully before signing. Some contain release language that waives your right to pursue additional costs related to the same change.
If Negotiation Fails
If the CO denies the REA or negotiations stall, you can convert to a formal claim under the Contract Disputes Act. The submission must meet the FAR 2.101 definition of a claim: a written demand for payment of a sum certain, as a matter of right. Claims over $100,000 require the CDA certification.
Once a properly certified claim is received, decision timelines apply. For claims of $100,000 or less, the CO must issue a final decision within 60 days if you request one in writing. For claims over $100,000, the CO has 60 days to either issue a decision or say when it will come.4Office of the Law Revision Counsel. 41 USC 7103 – Decision by Contracting Officer If the final decision goes against you, you can appeal to the appropriate agency Board of Contract Appeals within 90 days, or to the U.S. Court of Federal Claims within 12 months.15Office of the Law Revision Counsel. 41 USC 7104 – Contractors Right of Appeal From Decision by Contracting Officer Interest runs from the date the CO received the claim, not from the final decision or appeal.8Office of the Law Revision Counsel. 41 USC 7109 – Interest On large claims that take years, the interest component alone can be substantial.
The Risk of Inflating the Numbers
The certification requirement exists for a reason. Submitting a request with knowingly inflated costs or fabricated supporting data can expose you to liability under the False Claims Act, which imposes treble damages plus per-claim penalties that are adjusted for inflation.16U.S. Department of Justice. The False Claims Act FCA liability can arise not just from outright fabrication but from knowingly using false records material to a claim or acting in reckless disregard of the truth. Government auditors, particularly the Defense Contract Audit Agency, are trained to identify padding, duplicated charges, and unsupported cost elements. The financial upside of inflating an REA never comes close to justifying the risk.