Equitable adjustment
An equitable adjustment, in government contracting, is a contract adjustment pursuant to a changes clause, to compensate the contractor expense incurred due to actions of the Government or to compensate the Government for contract reductions. An equitable adjustment includes an allowance for profit; clauses that provide for adjustments, excluding profit, are not considered "equitable adjustments." In a "changes clause" in government construction contracts. Changes clauses give the government the power unilaterally to order contractual modifications; in return, the contract specifies that if the parties are unable to agree on compensation to be received by the contractor for the  modified work, the contractor shall be entitled to an equitable adjustment. The goal of an equitable adjustment is to place the contractor in the position he or she would have been in had the change not been encountered. The adjustment should not alter the contractor's profit or loss position from what it was before the change occurred. As mutually agreed by the government and contractor. Venues. Equitable adjustments are determined by federal agencies. The cornerstone of the regulatory scheme is the Federal Acquisition Regulations System, which comprises the Federal Acquisition Regulation (hereinafter referred to as "FAR"), which are contained  in Chapter 1 of Title 48 of the Code of Federal Regulations, and agency regulations supplementing or implementing the FAR. Generally the FAR apply to contract solicitations issued on or after April 1, 1984. Earlier contracts are governed by the prior agency regulations. The principal prior regulations were the Defense Acquisition Regulations and the Federal Procurement Regulations. There have been several major legislative changes over the years. The Contract Disputes Act of 1978 and the Federal Courts Improvement Act of 1982 established new procedures and remedies for the resolution of disputes between the government and contractors. The Competition in Contracting  Act of 1984 (CICA) encourages competitive government procurement procedures. Requirement of causation. To paraphrase Ralph L. Jones Co. v. United States, 33 Fed. Cl. 327, 331-332 (Fed. Cl. 1995):