[Reference: FAR 43]

Overview

This section discusses the modification of contracts and purchase orders.

Discussion

Invoices may be received for an amount other than the original amount of the contract or purchase order. If the increase or decrease is for an administratively acceptable reason and the amount is minimal, there is no need for a formal modification of the contract or purchase order. Finance and procurement offices may simply make an informal annotation to their contract or purchase order records.  Administratively acceptable reasons for differences in amounts might include a difference in shipping expenses, or if the original price was taken from an outdated catalog. A minimal amount is considered to be $250.00. These same principles are equally applicable when closing out contracts and purchase orders.

Best Practices

Before granting a change, the finance office representative ensures that the increase or decrease is justified as discussed above and then informs the procurement office of the action taken.

Contracting personnel maintain informal records of such actions and deny them if it appears that a contractor is deliberately overstating amounts, or if a pattern of invoice increases is apparent.