ACEC Requests More Flexibility for DoD Contracts

August 18, 2022

ACEC Requests More Flexibility for DoD Contracts

This week, the American Council of Engineering Companies wrote the Department of Defense’s Office of Defense, Pricing and Contracting (DPC) urging them to incorporate FAR 52.216-4 into new and existing contracts. The FAR provides a framework for procurement and contracting policies that reflect market conditions and the negotiation of fair and reasonable rates. During these challenging times, it is imperative that the Department’s policies are consistent with those expectations and utilize other provisions to provide additional relief. 

In response to earlier guidance issued to contracting officers, ACEC urged the Department to use every tool provided in the FAR. We appreciate the Department’s recognition that its industry partners are facing significant headwinds – particularly through the recent guidance memo to contracting officers to help manage risk of inflation that is impacting current and future contracts. The reality is inflation has historically been on a 2 – 3% annual trajectory, and most escalation clauses for government work in recent years were typically in this range.

With the inclusion of FAR 52.216-4, contractors would be enabled to work with their contracting officers when they have experienced salary increases and propose and negotiate a price adjustment and contract modification. By fully utilizing the flexibilities that already exist within the FAR that align contract terms with current economic conditions, this would ensure that the Department of Defense and other agencies have access to the qualified and experienced engineering services they need. This is particularly critical now, as the nation’s demand for engineering services will increase significantly with the implementation of the Infrastructure Investment and Jobs Act (IIJA).   

See our letter here. 

All comments to blog posts will be moderated by ACEC staff.