Arlington, Va. (Oct. 5, 2022) – The Aerospace Industries Association (AIA) today issued a statement of support for U.S. Senator Kevin Cramer’s (R-N.D.) amendment to S. 4543, the National Defense Authorization Act (NDAA) for Fiscal Year 2023, as the Senate prepares to officially begin debate on the legislation. S.Amd.6056 would allow the Department of Defense (DoD) to modify contracts amid record-high inflation.
“Inflation is running at more than double the rate anticipated when most contracts were negotiated. With limited tools at their disposal to manage increasing costs and maintain their workforce, many companies, especially small businesses, may choose to leave the defense industrial base entirely. The result would be significant harm to our national security and our ability to surge to meet demand,” said Eric Fanning, President and CEO of AIA. “These businesses need relief now and Senator Cramer is leading the charge to ensure contract flexibility with his amendment to the defense bill. We urge this crucial provision be included in the Senate’s FY23 NDAA.”
Last week, Fanning sent a letter to SASC leaders highlighting the need for contract flexibility language to be included in the NDAA. Fanning also penned an op-ed in Breaking Defense detailing the industry impact of inflation and outlining the steps Congress and the Pentagon must take to ease the pain of inflation before it weakens national security.
The amendment reads: SEC. 829. Modification of Contracts and Options to Provide Economic Price Adjustments. (a) Authority.–Notwithstanding any other provision of law, amounts authorized to be appropriated by this Act for the Department of Defense may be used to modify the terms and conditions of a contract or option, without consideration, to provide an economic price adjustment consistent with sections 16.203-1 and 16.203-2 of the Federal Acquisition Regulation during the relevant period of performance for that contract or option and as specified in section 16.203-3 of the Federal Acquisition Regulation. (b) Guidance.–Not later than 30 days after the date of the enactment of this Act, the Under Secretary of Defense for Acquisition and Sustainment shall issue guidance implementing the authority under this section.