Next it will become necessary to identify in what ways actual performance exceeded the contract requirements.  It is quite common to reconstruct the events that took place earlier usually in the form of a detailed chronology.

There are two approaches identifying the existence of a constructive change: (1) identifying specific events, whether they be a problem or government action that caused the expanded work or (2) a comparison of bid price to the actual cost of performance measured by dollars, man-hours, units of material, etc.  The second approach compares the costs bid for the contract to the costs actually spent performing.  It is usually used when the contractor has identified the existence of overruns in the performance of contract work but not necessarily the specific events causing the overrun.  The contractor can identify the areas of cost increases to pinpoint their causes and then determine whether those causes are the responsibility of the government.  This approach can be time consuming and contractors often uses a team approach using people in different parts of the organization such as engineering, production, contract administration and quality assurance.  Accountants and lawyers often review the results to determine who is responsible and to better quantify the impact.

Factual analysis should consider at least seven areas of data:

1.  Comparing “as bid” with “as built” drawing.  Comparing government-furnished contract drawings with detailed performance drawings will disclose any changes or dissimilarities between the as bid and as-built design. Investigation into the reasons for these differences should reveal the action or non-action of the government.
For example, As built drawings often are a result of contractor’s engineering documents that reveal additions, deletions or  changes which often state the reasons for the changes.

2.  Reviewing technical specifications.  All technical specifications furnished by the government should be reviewed for inaccuracies, discrepancies and ambiguities.  If the specifications are defective or impossible in any part, they may provide a basis for asserting a claim.

3.  Comparing the bid labor and materials with actuals.  When developing a bid, the contractor generally prepares estimates of labor and material costs even if they are not provided to government personnel.  These estimates should be compared with actuals to quickly reveal high dollar areas of problems performing the contract.

4.  Reviewing purchase orders.  Purchase orders, vendor invoices and subcontracts should be compared with material quotes and subcontractor proposals that were obtained during the bidding process.  Large difference need to be investigated.  Correspondences between the contractor and their subcontractors and vendors should be reviewed to identify price, quantity or other modifications that may point to constructive changes.

5.  Reviewing correspondence, reports, memoranda and scheduling records.  Since personnel change frequently and memories shorten over time, a review of contract correspondence and other memos frequently provide performance problems that may provide the basis of a claim and represent good documentation.  This data may be in files of contract administrators, plant managers, program managers, senior engineers, quality control managers, etc.  For defense contracts, the government lists on a DD Form 1423 all technical data delivered to the contractor and this should be examined to identify other documents worth examining.  In addition, there may be useful information in internal correspondences where, for example, program or production managers had to explain why budgets were not being met or other meeting minutes between job personnel.

6.  Reviewing records of quality assurance.  Correspondence concerning inspection matters and government actions in approving an inspection or quality control system or monitoring the contractor’s own inspections and tests may give rise to claims.  For example, when the government rejects certain work, it may be requiring a higher standard than called for in the contract.

7.  Interviewing knowledgeable people.  Interviewing knowledgeable people involved in contract performance will often highlight problems in performing the contract.  It is usually advisable to interview in groups so additional ideas can be sparked from hearing someone else.

{TAG_FORM_TITLE}