In a recent appeal case, Derian, Inc., ASBCA No. 62957 (August 25, 2023), the Armed Services Board of Contract Appeals (ASBCA) gave a detailed explanation on the correct approach to pricing a deductive change order. Additionally, they clarified what type of evidence should be presented to determine the amount required by a deductive change.
The Board expressed the overarching principle at the start – a contract equitable adjustment is required to shelter both contractors and the government from the upsurge and downturn in costs resulting from modifications that add or delete from the contract. This principle is crucial for all parties involved in contractual dealings and should guide corporate lawyers and professionals in their legal decision-making.
For additional details about the case, legal professionals can review the full report on the JDSupra website.
Note: Legal professionals should not solely rely on these summaries for legal advice. It’s essential to study the original cases, understand the precedents, and, if required, consult with a legal expert.