Price Modification due to Inflation

Hi Jiggy,

Absent a request for extraordinary relief, I don't see how you obtain any such modification.

At the beginners level, looking for a clause in the contract is the right thing. You did not indicate who the parties are to this contract, how old it is and what the dollar value is of the contract.  If the other party is not the government, might need an attorney for "thorough" research if the party is threatening not to perform, it is a large dollar amount, and you can not replace the item being furnished in a timely manner at a comparable price. For your information, the other party may not perform and attempt to defend themselves in a breach of contract action against them, with the concept that an unforeseen inflation event occurred to make performance unreasonable difficult or expensive. The event must be such that the parties cannot have reasonably foreseen it happening and it cannot be something within the parties' control. So, you may just want to make a business case comparing the impact on your company providing some relief or not and whether to negotiate for something of value in return.

Search the internet for DOD "Memorandum" entitled "Guidance on Inflation and Economic Price Adjustments"  Even if you are not DoD it will help substantiate the discussion so far.

Part 16 - Types of Contracts | Acquisition.GOV -  FAR 16.202-1 - "A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract."

There are situations where I would entertain it as a CO (AE contract, in CPS 6 years after award), but there is no precedent to support doing such widely. The questions is where do you get the authority? Suspension, delay, changes or economic price adjustment (maybe)?

On 7/22/2023 at 5:19 PM, Constricting Officer said:

The questions is where do you get the authority?

That is why the memos Carl referenced are important.