President Donald Trump’s tariff plans threaten to increase costs for federal contractors who won’t be exempt from the duties, but contractors may be able to pursue avenues for reimbursement if they follow certain regulatory rules.
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Some contracting officers may allow an economic price adjustment to be worked into an existing contract as a modification, and contractors facing a hit from tariffs should at least ask, although similar requests during the COVID-19 pandemic were rarely successful, according to PilieroMazza PLLC partner Lauren Brier.
“Contracting officers were not willing to consider it, because they don’t want to fork over any money, because they have to ask for funding,” Brier said. “That funding might not exist — especially with the government these days trying to very much tighten their belt strap.”
Without an economic price adjustment clause, contractors could try to seek a more general remedy, such as trying to invoke a contractual changes clause, which applies when a government action interferes with contractual performance.
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Invoking an excusable delay can also give contractors time to seek out alternative, tariff-free sources, or at least get them off the hook for delays resulting from any supply shortages because of tariffs. Contracting officers were often amenable to granting those delays during COVID-19, according to Brier.
“We were very successful in getting our clients extensions of time,” she said. “It’s reasonable — no one can get lumber, everyone’s in the same boat, we have to extend your performance period an additional six months so that we can actually get this done.”
Excerpt taken from the article “Federal Contractors’ Avenues for Tariff Mitigation” by Daniel Wilson for Law360. Visit this link for the full article (subscription required).
About Lauren Brier
Lauren represents commercial businesses in a variety of government contracting and litigation matters. As Chair of PilieroMazza’s REAs, Claims, and Appeals Group, she leads a team of attorneys who assist clients in every phase of the contract dispute process.
A highly skilled practitioner, government contractors benefit from Lauren’s substantial experience managing complex claims and appeals for contractors under the Contract Disputes Act (CDA) and other applicable jurisdictional statutes. This experience is particularly valuable for contractors seeking monetary relief and time extensions from procuring agencies, as she adeptly handles cases at the U.S. Court of Federal Claims and various boards of contract appeals. Lauren’s work in this area extends to advocating for the rights of contractors facing constructive changes, unjustified terminations, cure and show cause notices, and defective or vague specifications. Read more here.
