Unilateral vs. Bilateral Modifications

Unilateral Modifications (FAR 43.103(b)) are signed by the Contracting Officer only. They exercise a right the Government already has under the contract. The contractor's signature is not required because the clause gave the Government that authority at award. Common authorities include the Changes clause, Options clause, Government Property clause, and Termination clauses.

Bilateral Modifications (FAR 43.103(a)) are signed by both the Contracting Officer and the Contractor. Also called "supplemental agreements," these are used when both parties must agree to the change - things like negotiated equitable adjustments, definitization of letter contracts, changes the contract doesn't already authorize, and no-cost modifications the contractor agrees to.

Use Unilateral when:

• Exercising an option (FAR 52.217-9 or similar option clause)
• Making changes within scope under the Changes clause (FAR 52.243-1 through 52.243-5)
• Issuing a stop-work order (FAR 52.242-15)
• Government-furnished property changes (FAR 52.245-1)
• Terminating for convenience or default
• Administrative changes (correcting typos, changing paying office, updating addresses)
• Funding changes on incrementally funded contracts

Use Bilateral when:

• Any change the contract doesn't already authorize
• Negotiated equitable adjustments (after a unilateral change, the price adjustment is typically bilateral)
• Adding new work outside the existing scope
• Changing terms and conditions by mutual agreement
• Definitizing undefinitized contract actions or letter contracts
• No-cost extensions when no clause authorizes them
• Settlement of claims

Think of it this way: if you buy a car with a warranty, the warranty clause gives you (the buyer) rights to service or replacement. When you use that warranty, you don't need the dealer's permission again - you're exercising a right the dealer already gave you at sale. The dealer can't refuse. Same principle applies here. The contractor signed the contract knowing it contained an options clause, a changes clause, a termination clause, etc. They consented to those clauses. When you exercise those rights, you're not asking for new permission.

This is why it's critical to identify the correct clause authority BEFORE issuing a unilateral modification. If you don't have a clause that grants you the right, you can't use a unilateral mod. You'd have to negotiate bilaterally.

• ✕ Using a bilateral mod when you have unilateral authority: This wastes time getting contractor signatures for something you can just do. If the contract gives you the right via a clause, use a unilateral mod and move faster.
• ✕ Using a unilateral mod when you DON'T have unilateral authority: This is legally problematic. You can't force a change the contract doesn't authorize. Always verify the clause exists and covers the change you're making.
• ✕ Confusing "administrative" modifications with substantive unilateral changes: Administrative changes (FAR 43.103(b)(1)) are a specific subset - they correct errors, update administrative data, etc. They're unilateral, but they don't change price, delivery, or performance.
• ✕ Not citing the specific clause authority in Block 13 of the SF 30: You must cite the clause that gives you the right. This is your legal justification. See Topic 32 - SF 30 Modifications for details on proper SF 30 completion.
• ✕ Forgetting that even unilateral changes may trigger an equitable adjustment right: The change is unilateral (you don't need contractor signature), but if the contractor incurs costs due to the change, they may have a right to an equitable adjustment. That adjustment negotiation is typically bilateral.

Unilateral modifications exercise a right the Government already has. The contractor already agreed to that right when they signed the contract. Use them when you can cite a specific clause that grants you authority. They're fast and efficient.

Bilateral modifications require new agreement from both parties. Use them for changes the contract doesn't authorize, or when you need the contractor's consent. They're slower but necessary when you don't have unilateral authority.