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Full Funding of Change Orders on Federal Contracts: The Anti-Deficiency Act

from Ahlers & Cressman PLLC

In federal government contracting, as in most public works contracts, contractors are required to comply with Contracting Officers' decisions. Contract clauses mandate that in pending resolution of disputes, the contractor must proceed with the performance of the contract, the dispute notwithstanding. Thus, even if a contractor suspects that the Contracting Officer directing the extra work does not have appropriate funds to pay for the changed work, the contractor has little choice but to perform the extra work. This is a trap for unwary contractors that expend their own funds only to find out that there is no appropriation to pay for the extra work. The Federal Anti-Deficiency Act was passed to prevent this very issue from occurring, but as contractors have learned, this Act has not precluded government employees from directing extra work for which they have no funds. more

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