I examined how and whether the newly passed National Defense Authorization Act (NDAA) will provide inflationary relief for government contractors in a recent article for Reuters. Government contractors who had firm fixed price contracts awarded in the last two years are finding that the work performed now is more expensive due to rising inflation costs.

The National Defense Authorization Act of 2023 includes a short but interesting provision reminding the Department of Defense (DoD) that the unilateral insertion of a new clause in a DoD contract is a change that may entitle a contractor to compensation. Section 805 of the recently signed legislation amends 10 U.S.C. 3862, “Requests for equitable adjustment or other relief,” inserting the following provision and making conforming amendments:

(c) Treatment of Certain Clauses Implementing Executive Orders.– The unilateral insertion of a covered clause into an existing Department of Defense contract, order, or other transaction by a contracting officer shall be treated as a change directed by the contracting officer pursuant to, and subject to, the Changes clause of the underlying contract, order, or other transaction.