Payne Hackenbracht & Sullivan

Equitable Adjustment for Cost of Deleted Work

Disputes frequently arise when the government deletes work from the contract and seeks a credit. The contractor has the burden of proving how much the downward price adjustment should be for deleted work. Nager Electric Co. v. United States, 194 Ct.Cl. 835, 442 F.2d 936 (1971); Globe Construction Company, ASBCA No. 21069, 78-2 BCA p 13,337. Moreover, it is well settled that an equitable adjustment for work deleted is measured by what the cost of the deleted work would have been to the contractor at the time of the deletion. Nager Electric Co. v. United States, supra. However, as stated in Globe Construction Co., Inc., at 65,222, "as a general rule, the cost of deleted work is usually proved by estimates, simply because the work was never performed and the actual, historical experience is unavailable."

Equitable adjustments are defined as "simply corrective measures utilized to keep a contractor whole when the government modifies a contract." (FN4) Bruce Constr. Corp. v. United States, 163 Ct.Cl. 97, 100, 324 F.2d 516, 518 (1963). "A contractor who has underestimated his bid or encountered unanticipated expense or inefficiencies may not properly use a change order as an excuse to reform the contract or shift its own risk or losses to the Government." Pacific Architect & Engineers, Inc. v. United States, 203 Ct.Cl. 499, 508, 491 F.2d 734, 739 (1974) (citations omitted).