Which option is an example of a situation that might lead to a bilateral modification?

A bilateral modification occurs when both parties to a contract agree to make a change, often necessitating a new negotiation and mutual consent. This type of modification is typically seen in scenarios where the project needs advance due to shifts in requirements, resources, or market conditions.

Negotiated changes to project scope illustrate this well, as both the contractor and the client must come to a consensus on new terms or deliverables. This collaboration might include changes to the size, schedule, or design aspects of the project, reflecting the evolving nature of the work at hand. Both parties' involvement ensures that the modification is fair and takes into account their respective interests and obligations.

In contrast, other scenarios like contractor compliance issues, administrative corrections, or termination notices usually do not require mutual agreement and often arise from one party's actions or needs rather than collaborative negotiation. These situations do not exemplify bilateral modifications, as they are typically unilateral actions or decisions.