medium · Project Management Professional Predictive (Plan-Driven)
At Solstice Labs, a vendor on an FPIF contract has reached the PTA. The vendor’s manager claims that because the project is in a high-inflation environment, the PTA formula should be adjusted using an Economic Price Adjustment (EPA) clause that is not in the current contract.
What is the project manager’s best response?
- Allow the adjustment temporarily by drawing from the management reserve to maintain the vendor's cash flow.
- Immediately escalate to the Legal Department to prepare for a lawsuit regarding the vendor's attempt to change contract terms, while documenting the decision in the issue log.
- Decline the request, as the current contract is FPIF and lacks an EPA clause; any change requires a formal amendment approved by the contracting authority.
- Facilitate a retrospective with the vendor to identify how the team can work faster to beat the inflation curve.
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