# USACE Faces Fuel Cost Pressures on FFP Contract

A firm-fixed-price (FFP) construction contract valued at approximately **$40 million** awarded by the U.S. Army Corps of Engineers (USACE) in November 2025 is experiencing significant cost pressures due to escalating fuel prices linked to the ongoing U.S.–Iran conflict. This situation highlights the challenges contractors face under FFP contracts without economic price adjustment (EPA) clauses, as typical legal remedies for cost increases are limited unless the government issues formal or constructive changes to contract scope or requirements. Procurement professionals should be aware that while creative claim theories such as invoking FAR 50.103 or the Christian doctrine have been discussed, they generally do not apply to standard USACE construction contracts, emphasizing the importance of contract terms and risk allocation in volatile market conditions.

- **Why this matters:** Contractors on FFP contracts without EPA clauses bear significant risk from fuel price volatility, impacting project costs and profitability.
- Procurement officials should consider the implications of fuel cost escalations when structuring future contracts, potentially incorporating EPA clauses or flexible pricing mechanisms.
- Contracting officers and legal teams must carefully evaluate any government-directed changes or emergency provisions that could justify equitable adjustments under FAR provisions.
- Industry stakeholders should assess risk management strategies and contract negotiation approaches in light of geopolitical events affecting supply chain and fuel costs.

**Jurisdictions:** federal
**Industries:** Construction & Infrastructure
**Topics:** Regulatory Compliance
**Published:** September 21, 2026

### Government Entities
- U.S. Army Corps of Engineers (USACE)

### Key Quotes
> Unless.. The government issues an official, formal (actual) or informal (constructive) change to the scope, specifications, or work requirements. Then you have a case for renegotiating the cost and asking for inclusion of the economic price clause to be added.
> — Anonymous commenter

### Sources
- [Federal FFP contract + IRAN conflict exploding fuel costs — any creative REA/claim theories beyond the obvious dead ends?](https://www.reddit.com/r/GovernmentContracting/comments/1wmsvo1/federal_ffp_contract_iran_conflict_exploding_fuel) - reddit-governmentcontracting