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Obligations and Change Orders under National Park Service Contract

B-192036 Sep 11, 1978
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Highlights

Obligations and change orders under a contract for the development of a national historic site were questioned. An obligation is required to be recorded under the Supplemental Appropriation Act of 1955 when a definite commitment is made or a legal liability is incurred to make payment from an appropriation. There is no liability to make payment under a construction contract provision calling for miscellaneous work not otherwise provided for until a written order is accepted by the contractor. Therefore, an obligation may not be recorded until such time. Under a contract which provides that quantities of unit price items are estimates and payment will be made only for actual quantities completed, a change order would not be required for quantity overruns on individual estimated unit price items. However, there should be an administrative reservation of sufficient funds to cover the excess of estimated increases over decreases in unit price items resulting from quantity changes.

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