What do modification numbers mean in a federal contract?

How does USAspending record a contract?

USAspending.gov, the federal government's public site for award data, treats a contract as a set of linked records. Its glossary defines a "prime award transaction" as a single recorded action that establishes or modifies a prime award such as a contract, grant or loan between a federal agency and the primary recipient. A "prime award summary" includes all the related transactions that share the same prime award unique key. The award profile page lets a user browse the summary and its list of transactions.

The identifier is the Procurement Instrument Identifier, or PIID, defined as a unique identifier assigned to a federal contract, purchase order, basic ordering agreement, basic agreement and blanket purchase agreement, used to track the contract and any modifications or transactions related to it.

What is a modification number?

The glossary defines the modification number as the identifier of an action being reported that indicates the specific subsequent change to the initial award. The first action has no later change to describe, and each change after it gets its own number. The numbering convention belongs to the awarding agency; the glossary only says the number identifies a subsequent change.

What is the reason for modification?

The glossary says the "reason for modification" provides information on the type of change made to an award, and the official definition adds that there are typically multiple actions for each award. The glossary does not list the reasons, so read the reason on the USAspending record itself, as the agency entered it.

Can an action reduce the amount?

Yes. The glossary defines the "federal action obligation" as the amount of the Federal Government's obligation, de-obligation or liability, in dollars, for an award transaction. A "deobligation" is the cancellation or downward adjustment of previously obligated funds, and the glossary says funds deobligated may be reobligated within the period of availability of the appropriation. So a modification can carry a negative number: that is how a deobligation appears.

How do the totals fit together?

The current amount counts what has been obligated, and the potential amount is a ceiling. Neither is revenue. That distinction is the subject of contract ceiling versus obligated amount.

Which date does a search use?

The glossary says that because award obligations are tied to action dates, any search for spending data on USAspending uses the action date, not the period of performance dates. A contract signed years ago can therefore show a new action in a recent month, for example when an option is exercised. The period of performance has its own start date and its current and potential end dates, and the glossary notes that the latest action date can differ from them.

What about orders under a larger contract?

Some awards are issued under a parent. The "parent award identification number" is the identifier of the procurement award under which the specific award is issued, such as a Federal Supply Schedule. So two records with different PIIDs can belong to one umbrella vehicle. Indefinite delivery contracts, which the glossary says facilitate the delivery of supply and service orders during a set timeframe, are one source of such orders.

What does an example look like?

The glossary's own example uses a base contract of $10M with three option years at $1M each, which gives a potential award amount of $13M. As an illustration of how actions add up, suppose the first action obligates the $10M base, so the current award amount is $10M. A first modification exercises one option year and obligates $1M, so the current amount becomes $11M while the potential amount stays at $13M. A later modification deobligates $0.5M, so the current amount falls to $10.5M. Each of these is one transaction in the same prime award summary, identified by the same PIID and by its own modification number and action date.

The sequence is invented for illustration. The point is that the figure you see for a contract depends on which actions are included, and a search by action date will show only the actions inside the dates you choose.

What this does not tell you

A modification does not say whether the work was done, whether a company was paid, or what profit it produced. Obligation is a binding agreement that will result in payments, now or later, not a payment itself. A count of modifications says how many actions were recorded, not whether any of them was significant. OQRO's contracts page lists awards to listed companies with the obligated amount kept apart from the ceiling and links each to USAspending, and how to find federal contracts for a public company shows the search.