5 things to know about requesting an equitable adjustment
Adapting to change is key as a business owner. The unexpected rise in costs from covid, inflation, and supply chain issues can eat into your profits. There are options for you to still make money off your government contract. A great solution is a Request for Equitable Adjustment or REA.
- What is a Request for Equitable Adjustment (REA)?
A request for an equitable adjustment is a tool that lets you make back the money you’ve lost to unexpected costs on your government contract.
- Is there a time limit to to submit a Request for Equitable Adjustment claim?
Timing is everything. In most cases, you only have 30 days to submit an REA.
- How do you submit a Request for Equitable Adjustment (REA)?
To submit a Request for Equitable Adjustment you need to write a letter to your contracting officer detailing exactly why you need a price adjustment on your contract.
- Is a Request for Equitable Adjustment always approved?
Don’t expect it to be a cakewalk. REA approval isn’t guaranteed. Your letter of REA needs to be thorough. That’s why you need effective representation to stand your ground for your contractual rights. Mctlaw will lead you through the negotiation process to give you the highest chance of success.
- Can you add interest lost for monies you would have been paid?
You’ve already lost profits. Mctlaw wants to make sure you don’t lose anymore and win back what you’ve lost. Our firm has your end game in mind. Our attorneys find every opportunity to recover costs. You may even be reimbursed for your legal fees with an equitable adjustment. Our firm helps you make a profit again.
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When might a Request for Equitable Adjustment (REA) be needed?
- The government has added work not agreed upon to your project. Unchallenged increases in project scope, even small ones, can destroy your profits.
- Inflation. The cost of goods went up since you started the project.
- Complications from COVID-19 that led to supply chain issues, such as soaring demand, increased shipping costs, port delays, product shortages, and a decrease in workers.
- Unexpected situations delayed your project completion date. This could include supply chain disruptions, your workforce is out sick, or the government changed the scope of your project, which added time needed to complete it.
- The government caused delays, like failing to approve part of the project in a timely manner.
- All these issues end up eating away at your profits. You’re entitled to an equitable price adjustment to make up the money you have lost. Let mctlaw do the heavy lifting for you and guide you through the process.
The Process: How does a contractor request an Equitable Adjustment (REA)?
First, there is the preparation for an REA. What you need:
- Gather key documents, which detail your contract terms.
- Any correspondence with the government asking for unplanned work or causing unnecessary delays.
- Any cost estimates the government scope increase or time delay caused.
Mctlaw can analyze this information, break down where the government violated the contract, and tailor a legal strategy to give you the best chance for approval. Let our attorneys do the hard part of writing the formal letter to your contracting officer (CO) required for an REA.
Next Steps: Submitting the Letter for Your Request for Equitable Adjustment Proposal
Mctlaw submits the letter for REA to the government and follows through with proactive and effective negotiations.
The government should respond to your request for equitable adjustment within 60 days. It’s important to have legal representation during this process so the government knows you can escalate a denied REA to a claim if necessary.
A Request for Equitable Adjustment is not a claim. It becomes a claim when a denied request is appealed.
What to Do If You Receive a Request for Equitable Adjustment Denial Letter?
If the government denies your request, then you have a right to file a claim. There are two paths you can take when filing a claim. You can either bring it to the agency’s appeal board or bring it to the Court of Federal Claims.
The agency’s appeal board may not be your best avenue, given that you would be taking your claim to the party that rejected your Request for Equitable Adjustment in the first place.
The other option that may give you more favorable results is taking your claim to the Court of Federal Claims (CFC). Mctlaw specializes in litigating in the Court of Federal Claims. Filing in the CFC could be beneficial since they are an unbiased, outside party. What makes our firm unique is our extensive knowledge and experience in the CFC. Find out more on why filing a claim in the CFC is beneficial.
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