Firm Fixed Price contract extension

Unclear because important information was missing.

However, normally a DOD FFP contract specifies a deliverable. The contract continues until the deliverable is accepted.

Normally, in an FFP contract situation the contractor does not receive additional compensation simply because its labor costs were higher than bid. However, normally a FFP contract's period of performance is not extended for reasons related to the contractor's cost of performance.

CFO said:

Under a DOD FFP contract does a contractor have to agree to a multi month extension without any adjustment if the cost to employ specialized personnel resulted in materially higher compensation than originally bid?

What are the circumstances for the extension? Is it under a clause such as 52.217-8   Option To Extend Services.

CFO said:

Under a DOD FFP contract does a contractor have to agree to a multi month extension

In addition to what Joel asked, what is this contract for, services, supplies or construction?  As it is, your question contains not enough facts to be understood.

Also, what are the units of issue specified in the CLINs (contract line items)?

Extend of Services in accordance with FAW 52.217-8 Option to Extend Services in accordance with the Performance Work Statement units is months. It is extended because the contract is part of a multiple task order contract that was awarded to another contractor and it does not begin yet.

FAR 52.217-8 states in part "The Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor."  That should answer your question.

https://www.wileyrein.com/media/publication/387_Prairie Robinson Article 7.24.13.pdf