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Immediate Release

Updated Guidance on Managing the Effects of Inflation With Existing Contracts

The Department of Defense (DoD) issued Friday updated guidance for Contracting Officers regarding approaches for addressing inflation under existing firm-fixed-price contracts.

The updated guidance is based on feedback from the Department’s acquisition executives about how inflation is presently affecting the defense industrial base and contractors’ ability to perform under existing firm-fixed-price contracts. The memorandum advises Contracting Officers about the range of approaches available to them to make potential accommodations including schedule relief and amending contractual requirements, and in extraordinary circumstances, the use of Extraordinary Contractual Relief.

As conditions warrant, DoD will continue to adapt its approach to meeting mission requirements through the current economic environment.  

The updated guidance memorandum is available at