41 U.S.C. § 1503: Contract price adjustment

If the Federal Government and a contractor or subcontractor fail to agree on a contract price adjustment, including whether the contractor or subcontractor has complied with the applicable cost accounting standards, the disagreement will constitute a dispute under chapter 71 of this title. The Federal Government may not recover costs greater than the aggregate increased cost to the Federal Government, as defined by the Board, on the relevant contracts subject to the price adjustment unless the contractor or subcontractor made a change in its cost accounting practices of which the contractor or subcontractor was aware or should have been aware at the time of the price negotiation and which contractor or subcontractor failed to disclose to the Federal Government. costs recovered by the Federal Government shall exclude any contract or subcontract (or any portion of such contract or subcontract) that is firm, fixed-price, or that is not price-redeterminable based on costs; and for a fiscal year, for any contract or subcontract (or any portion of such contract or subcontract) that is not a firm, fixed-price contract or subcontract the costs recovered by the Federal Government shall not exceed the net increased costs, if any, paid to the contractor or subcontractor for all changes in cost accounting practices implemented within the same fiscal year. The interest rate applicable to a contract price adjustment is the annual rate of interest established under section 6621 of the Internal Revenue Code of 1986 ( 26 U.S.C. 6621 ) for the period. Interest accrues from the time payments of the increased costs were made to the contractor or subcontractor to the time the Federal Government receives full compensation for the price adjustment.