Payne Hackenbracht & Sullivan

Equitable Adjustment - Profit

There is no question that profit is an integral part of an equitable adjustment. United States v. Callahan Walker Constr. Co., 317 U.S. 56 (1942). This is true where, for example, a contractor seeks recover under the changes clause and the differing site conditions clause and includes impact costs. Delco Electronics Corp. v. United States, 17 C1. Ct. 302, 334 (1989); Bennett v. United States, 371 F.2d 859 (Ct. C1. 1967); General Builders Supply Co. v. United States, 409 F.2d 246 (Ct. C1. 1969); Youngdale & Sons Constr. Co. v. United States, 27 Fed. C1. 516 (1993).

Where profit is recoverable, the measurement should reflect a fair and reasonable amount under the circumstances. Keco Indus.Inc., ASBCA No. 18730, 74-2 BCA 10,711 (lg74); H&K Corp., ASBCA No. 13528, 71-1 BCA 8,906 (1971). In this regard, the profit rate should fairly reflect the nature of the work and the risks involved to the contractor. Carvel Walker, ENGBCA No. 3744, 78-1 BCA 13,005 (1977); Cimarron Constr. Co. & Williams Bros., ENGBCA No. 2862, 69-2 BCA 8,003 (1969); Aerodet-Gen. Corp., ASBCA No. 17171, 74-2 BCA 10,863 (1974).