U.S. Code
»
Title 41
» Subtitle Subtitle I— Federal Procurement Policy › Division Division B— Office of Federal Procurement Policy › Chapter CHAPTER 15— COST ACCOUNTING STANDARDS
41 U.S.C. § 1503
Contract price adjustment
(a)Disagreement Constitutes a Dispute.—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.(b)Amount of Adjustment.—A contract price adjustment undertaken under section 1502(f)(2) of this title shall be made, where applicable, on relevant contracts that are subject to the cost accounting standards so as to protect the Federal Government from payment, in the aggregate, of increased costs, as defined by the Cost Accounting Standards Board and in accordance with the following requirements:(1) 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.(2) For such changes in cost accounting practices—(A) 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(B) 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.(c)Interest.—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.(Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3699; Pub. L. 119–60, div. A, title XVIII, § 1806(f)(1), Dec. 18, 2025, 139 Stat. 1240.)Editorial NotesAmendments2025—Subsec. (b). Pub. L. 119–60 amended subsec. (b) generally. Prior to amendment, text read as follows: “A contract price adjustment undertaken under section 1502(f)(2) of this title shall be made, where applicable, on relevant contracts between the Federal Government and the contractor that are subject to the cost accounting standards so as to protect the Federal Government from payment, in the aggregate, of increased costs, as defined by the Cost Accounting Standards Board. 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 made a change in its cost accounting practices of which it was aware or should have been aware at the time of the price negotiation and which it failed to disclose to the Federal Government.”
Statutory Notes and Related SubsidiariesRegulationsPub. L. 119–60, div. A, title XVIII, § 1806(f)(2), Dec. 18, 2025, 139 Stat. 1240, provided that: “Not later than 180 days after the date of the enactment of this Act [Dec. 18, 2025], the Administrator for Federal Procurement Policy shall issue such regulations as are necessary to implement the amendments made by this subsection [amending this section].”
Notes of Decisions
The Boeing Co. v. United States, 968 F.3d 1371 (Fed. Cir. 2020).
· cites it 4× “606 undisputedly required the Defense Department to act as it did, that regulation is unlawful— principally because it is contrary to 41 U.S.C. § 1503 (b) (and also for procedural reasons).”
Boeing Co. v. United States, 119 F.4th 17 (Fed. Cir. 2024).
· cites it 3× “” 41 U.S.C. § 1503 (b). Further, Case: 23-1018 Document: 41 Page: 4 Filed: 10/04/2024 4 BOEING COMPANY v.”
Directv Grp., Inc. v. United States, 670 F.3d 1370 (Fed. Cir. 2012).
· cites it 2× “§ 422 (h)(3) was recodified at 41 U.S.C. § 1503 (b). [3] § 15 was recodified at the same time as § 422 at 41 U.”
Boeing Co. v. United States (Fed. Cl. 2019).
· cites it 7× “606 was applied to Boeing’s contract, in violation of 41 U.S.C. § 1503 (b). Id. at 34-35 . When only the representative contract is considered, Boeing asserts that the government’s claim for $1,064,773 is invalid, and that damages for the payments paid by Boeing on the…”
The Boeing Co. v. United States (Fed. Cl. 2022).
· cites it 3× “) Cost Accounting Standards ) Statute; 41 U.S.C. § 1503 ; THE UNITED STATES, ) Illegal Exaction; Exclusive ) Remedy.”
Gulley v. United States (Fed. Cl. 2020).
· cites it 2× “- 15 - In Boeing, plaintiff, The Boeing Company, alleged that the government forced it to pay $1,064,773 to cover various increased costs caused by changes “in direct violation of 41 U.S.C. § 1503 (b), which requires that the Government may not recover costs greater than the…”
Johnson Lasky Kindelin Architects, Inc v. United States (Fed. Cl. 2020).
“41 U.S.C. § 1503 (b) (“Contract price adjustment”) (providing for CDA jurisdiction for cost accounting disputes involving “relevant contracts between the Federal Government and the contractor” (emphasis added)).”
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