As a new contract specialist in an unnamed three-letter federal agency, you have just finished negotiating a sole source, fixed priced contract worth over $100 million. One of the really difficult points in the negotiation was the price of the 20 Cadillac Escalades required for performance of the contract. The contractor had given you quotes from 3 different dealers as the backup for the costs proposed for the contract.

Now, a month into contract performance, you learn that the vehicles have been recalled for an unfortunate tendency to unexpectedly take sharp left turns when traveling at 70 miles per hour. When you approach the contractor's program manager with your concerns about this recall, he says not to worry. The company had heard rumors about this some time ago and they can get Ford Expeditions instead of the Escalades. What issues are raised by this scenario, why and what might you do about it? What contractual provisions might be called into play?