Government Contracting Database
Variation in Estimated Quantity Clause
As a general rule, the Variations in Estimated Quantity clause provides for an equitable adjustment in the contract price when the quantity of a pay item is an estimated quantity, and the actual quantity varies more than 15 percent above or below the estimated quantity. The recognized purpose of this clause is to apportion the risk of an overrun or underrun in estimated quantities resulting from factors not reasonably apparent to the parties at the time they entered into the contract. FAR 52.211-18
Avoiding Application of the Clause
Although the percentage limitations of the clause are strictly applied in determining entitlement to an equitable adjustment, the Variations in Estimated Quantities clause will not be enforced where the quantity variation is cognizable under either the Changes or Differing Site Conditions clause. Burnett Const. Co. v. United States, 26 Cl. Ct. 296, 306 (1992) (citing United Contractors v. United States, 177 Ct. Cl. 151, 368 F.2d 585 (1966)); Dunbar & Sullivan Dredging Co., ENGBCA 3165, 73-2 BCA ¶ 10,285.
Variation in Estimated Quantities clauses require proof of an actual increase or decrease in costs due solely to the variation above 115% or below 85% of the estimated quantity. Foley Co. v. United States, 11 F.3d 1032, 1033 (Fed. Cir. 1993). In Foley, the court makes it clear that the plain language of the clause is controlling and that without proof of an actual increase or decrease due to the variation, a party cannot succeed under it. Id.
Similarly, it has been held that the clause is not applicable when the cause of the variation is an erroneous estimate resulting from the active misrepresentation, deliberate wrong, gross or inexcusable error, or the negligence of the government. Appeal of Raytheon Missile Sys. Co., ASBCA No. 57594, 13 BCA ¶ 35264 (citing Maya Transit Company, ASBCA No. 20186, 75-2 BCA ¶ 11,552); Womack v. United States, 182 Ct.Cl. 599, 389 F.2d 793 (1968); Chemical Technology, Inc. v. United States, 227 Ct.Cl. 120, 645 F.2d 934 (1981). Indeed, the bidder does not assume responsibility for the government’s miscalculation, error or negligence:
[W]here a negligently-prepared estimate by the government results in additional costs to a contractor, the contractor should be entitled to reimbursement for such costs.
Integrity Management International. Inc., ASBCA No. 18289, 75-2 BCA ¶ 11,602.
Therefore, in these situations, the government may not invoke the Variations in Estimated Quantities clause to limit or defeat a claim for an equitable adjustment resulting from a quantity variation.
The government is held to a standard of reasonable care in preparing estimates for solicitations:
[T]he Government is not required to be clairvoyant, . . . it is obliged to base [its] estimate[s] on all relevant information that is reasonably available to it.
Fed. Grp., Inc. v. United States, 67 Fed. Cl. 87, 98 (2005) (quoting Womack v. United States, 389 F.2d 798, 801 (1968)). Moreover, the degree of care to be taken in preparing estimates for a solicitation depends upon the importance of the estimate in preparing the bids. See Integrity Management International, supra.
An estimate of quantities of material typically is critical to a contractor’s bid preparation. Moreover, a contractor has a right to rely on the quantity estimate in preparing its bid. As the Board noted in similar circumstances in John Murphy Construction Co., AGBCA 418, 79-1 BCA ¶ 13,836 (1979):
The fact that after the mistake was called to the government’s attention it was decided not to issue an addendum or to cancel the IFB . . . does not persuade us that the estimated quantities were established with the exercise of due care.
Updated: July 10, 2018