Section 21: General principles applicable to equitable adjustments

236 words·~1 min read·/ma/part-i/title-ii/chapter-7c/21

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Section 21. Equitable adjustments in the contract price negotiated pursuant to section 19 or as part of a contract modification shall be made in accordance with the general principles in this section. The commissioner shall promulgate regulations designed to implement this section.

(1)Adjustments in the contract price shall be made to the maximum extent feasible on a fixed price basis prior to the execution of the change order or contract modification, if this can be done without adversely affecting the interests of the commonwealth.

(2)Where a fixed price cannot be set due to difficulty in estimating the scope of the change ordered, adjustment may be made on a lump-sum guaranteed maximum price basis calculated by use of unit prices specified in the contract or agreed upon by the parties.

(3)Cost reimbursement or time-and-materials methods of price adjustment shall not be used, except where, in the written opinion of the commissioner, no other pricing method is possible. When such pricing method is used, the contractor shall provide complete and accurate information disclosing the costs incurred in performing changes. The contractor shall maintain separate accounts, by job order or other suitable accounting procedure, of all segregable direct cost of work, both changed and not changed, allocable to the change. The commissioner shall promulgate regulations setting forth cost principles which shall be used to determine the allowability of incurred costs for the purpose of reimbursing costs.