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DoD Proposes Changes to Cost or Pricing Data Rules for Small Businesses

On August 30, the Department of Defense (“DoD”) issued a proposed rule to implement a section of the National Defense Authorization Act for fiscal year 2016 that provides exceptions from the certified cost and pricing data requirements, and from the records examination requirement for certain awards to small businesses or nontraditional defense contractors. The proposed rule would amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to provide an exception from cost or pricing data for contracts, subcontracts, or modifications of contracts or subcontracts valued at less than $7.5 million. This exception would be applicable to small businesses or “nontraditional” defense contractors,. Read More.

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Subcontractor Oversight (Who’s Responsible?)

By: John N. Ford, JD ; Senior Consultant  Who has privity? 42.505 – Post-award Subcontractor Conferences (a) The prime contractor is generally responsible for conducting post-award conferences with subcontractors. However, the prime contractor may invite Government representatives to a conference with subcontractors, or the Government may request that the prime contractor initiate a conference with subcontractors. The prime contractor should ensure that representatives from involved contract administration offices are invited. (b) Government representatives– (1) Must recognize the lack of privity of contract between the Government and subcontractors; (2) Shall not take action that is inconsistent with or alters subcontracts; and (3) Shall ensure that. Read More.

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New Guidance–Limited Role for DCAA Audit of Non-DoD Contracts

The 2016 National Defense Authorization Act (NDAA, S.1356) (“the Act”) includes a number of sections related to Acquisition Policy or Acquisition Management. In particular, the Act discusses the subject of the Defense Contract Audit Agency (“DCAA”) contract audits and the requirements for improved auditing on the incurred cost backlog (“Indirect Cost Rate Proposals”; “ICPs”) are explicitly mentioned. Section 893 prohibits DCAA from performing any audits for non-defense agencies (e.g., National Aeronautics and Space Administration (“NASA”)), unless the Department of Defense (“DoD”) certifies that DCAA is current on the ICP backlog or less. This restriction could cause some disruption for contractors. Read More.

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Prohibition of Reimbursement of Congressional Investigation Costs

On February 17, 2016, the Federal Register published a proposed rule that would prohibit government contractors from claiming costs incurred in response to a congressional investigation or inquiry that is the subject matter of a proceeding resulting in a disposition as described in 10 U.S.C. 2324(k)(2). As a refresher for those who are lucky enough to not deal with legal expense on a recurring basis, 10 U.S.C. 2324(K)(2) – Allowable Costs Under Defense Contracts, states that a disposition includes any of the following that results from a violation or failure to comply with, a Federal or State statute or regulation: A conviction. Read More.

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Cybersecurity Requirements: Another Challenge for Government Contractors

With all the recent data security breaches, it is not surprising that the U.S. Government is starting to crack down on cybersecurity for their government contractors. Approaches the U.S. Government are taking include issuing laws, regulations and standards that require contractors to take security measures for safeguarding their data. On July 7, 2014, President Obama signed into law the Intelligence Authorization Act for Fiscal Year 2014 (Public Law 113-126). This law requires intelligence contractors with security clearances to promptly report network and information system breaches, and provide government investigators access to the contractors’ systems that have been comprised. Additionally, the. Read More.

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