Methods GSA Uses To Establish Prices for Construction Contract Changes

LCD-77-304: Published: Nov 23, 1976. Publicly Released: Nov 23, 1976.

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A survey of General Services Administration (GSA) construction contracts revealed a need for changes in methods for establishing prices for change orders reducing the scope of work. Under existing GSA practice, a contractor is not required to give the government credit for overhead, profit, and commission on work deleted from the contract.

An examination of 19 change orders showed that allowances for overhead, profit, and commission were not applied consistently. An estimated reduction in costs of $140,000 on five contracts would have resulted from such allowances on 76 credit change orders.

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