Pentagon planning new guidance to help contractors squeezed by inflation

The Defense Department is preparing new guidance that would give its contracting officers more flexibility to reimburse vendors whose costs have ballooned because of inflation, updating an earlier policy document that industry groups complained did too little to prevent contractors from bearing the full brunt of higher prices.The update is in the final review stages and should be published within the next week, said Dr. Bill LaPlante, the undersecretary of Defense for acquisition and sustainment. A key focus would be to offer relief to companies who signed firm fixed-price contracts with the government before inflation took hold.