DoD Offers Guidance for Contractors on Inflation and Economic Price Adjustment Clauses

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Amanda C. DeLaPerriere 

On May 25, 2022, the Department of Defense (“DoD”) issued a memorandum recognizing that contractors are not immune from the “period of unusually high” inflation. The memorandum, titled “Guidance on Inflation and Economic Price Adjustments,” provides guidelines on when relief from cost increases due to inflation is appropriate and provides considerations for the proper use of economic price adjustment (“EPA”) clauses when entering into new contracts.

For existing DoD contracts, whether contractors can get relief from inflation depends on the type of contract.

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