Help on the Way? Proposed National Defense Authorization Act for 2023 Grants DoD Discretion to Allow Inflation Relief for DoD Contractors

The annual National Defense Authorization Act (NDAA), in essence Congress’ annual budget for the Department of Defense (DoD), commonly includes various riders and attachments that amend or create other federal laws. For example, the 2022 NDAA gives contracting officers a lot more discretion to help out its contractors in light of inflation.  We’re guessing we don’t need to remind you that inflation has been a real concern for contractors in 2022, as well as the general public. In fairness to the DoD, the department has tried to address the concern as far as federal law allowed as well. Back in May, it released guidance outlining its plan to include economic price adjustment clauses with upcoming firm-fixed price contracts, which would more easily allow for adjustments for inflation. Then, in September, it released another memorandum that, while still providing for no general policy of adjusting firm-fixed price contracts for inflation, noted that through FAR Part 50, Extraordinary Contract Actions, established under 50 U.S.C. § 1431, some contracts could be adjusted for inflation as an “extraordinary contract action.”  Please note that this article was published prior to the approval of the NDAA.  The NDAA was passed by Congress and signed by the President on December 23, 2022.  Read more  

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