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Change Order Mark-up on Federal Projects?

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John Reeves
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Federal Money projects all have a change clause that uses Part 31 Federal Acquisition Regulation ("FAR") 48 C.F.R. Part 31.  Do those projects have a standard or required % for Mark-ups for change orders? - I have been looking at a contract that refers to that Regulation, but have seen no "allowable" mark-ups in either the regulation or the contract.  Is that un-usual?  Is there a mark-up on Federal projects?  I think there are some general one's in legal claims but I do not know where those come from.  



Rodel Marasigan
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Typically, the variation rates already includes marked ups.

48 CFR 31.102 - Fixed-price contracts also stated, “cost and other factors are considered”.

31.102 Fixed-price contracts.

The applicable subparts of part 31 shall be used in the pricing of fixed-price contracts, subcontracts, and modifications to contracts and subcontracts whenever (a) cost analysis is performed, or (b) a fixed-price contract clause requires the determination or negotiation of costs. However, application of cost principles to fixed-price contracts and subcontracts shall not be construed as a requirement to negotiate agreements on individual elements of cost in arriving at agreement on the total price. The final price accepted by the parties reflects agreement only on the total price. Further, notwithstanding the mandatory use of cost principles, the objective will continue to be to negotiate prices that are fair and reasonable, cost and other factors considered.”

 See below for more information:

FAR 48 C.F.R. Part 31