DoD contract inflation guidance

WASHINGTON - The Pentagon is working on new guidance that would give contracting officers more flexibility to make adjustments on defense companies' contracts, especially on firm, fixed-price ones with suppliers, the Defense Department’s top acquisition official Bill LaPlante said Sept. 7. DoD hopes to update guidance for contracting officers within “the next week” after the new language is vetted by acquisition officials, the undersecretary of defense for acquisition and sustainment, said. He says he's worried about small suppliers who signed firm, fixed-price contracts. It’s got 50 workers "and all of a sudden is dealing with 11%,” he said. “We don’t want those companies to go out of business. That’s what we’re working on right now.” The government has economic price adjustments to respond to inflationary pressures, but not all firm, fixed-price contracts have one of the clauses, LaPlante said. “So, what we’ve been doing since then, is looking at several things. (1) can government loosen the definition of an EPA clause? And can the government use what’s called ‘extraordinary circumstances?’ … Changing the definition to make firms whole? (2) what are novel legislative proposals and ideas to address this?” LaPlante said he is “convinced” companies are being harmed by inflation but needs data from industry to prove to Congress that suppliers are in danger of going out of business or no longer working with the government. (Source: Breaking Defense 09/0/22) Pentagon to release new contracting guidance to mitigate inflation impact on suppliers - Breaking Defense