Our monthly edition of the “Government Contracts Regulatory and Legislative Update” offers a summary and insight into the relevant industry developments that occurred during the previous month.Regulations
DoD Issues Proposed Rule Establishing Preference for Fixed-Price Contracts
On April 1, 2019, the U.S. Department of Defense (DoD) issued a proposed rule to revise the Defense Federal Acquisition Regulation Supplement (DFARS) to establish a preference for fixed-price contracts when determining contract type, and to require use of firm fixed-price contracts for foreign military sales, subject to exceptions. Approval is required for cost-reimbursement contracts in excess of $50 million if awarded between October 1, 2018 and October 1, 2019, and for cost-reimbursement contracts in excess of $25 million if awarded on or after October 1, 2019. These revisions will implement Sections 829 and 830 of NDAA FY 2017.
The proposed rule includes the following key amendments:
- Adds “milestone decision authority” definition to DFARS 202.101.
- Revises DFARS 216.102(1) and adds DFARS 216.102(3) to reference the Section 829 NDAA requirements.
- Adds DFARS 225.7301-1 and -2 to implement the Section 830 NDAA requirements.
DoD Issues Proposed Rule Revising the Nonmanufacturer Rule for 8(a) Participants
On April 1, 2019, DoD issued a proposed rule to amend the DFARS to implement the Small Business Administration’s (SBA) final rule standardizing the nonmanufacturer rule (NMR). The NMR imposes certain requirements upon small business concerns that offer end items they did not manufacture, process, or produce.
This rule will update DFARS clause 252.219-7010 (Notification of Competition Limited to Eligible 8(a) Participants) to remove the nonmanufacturer rule exemption for contracts valued at or below $25,000 and awarded under simplified acquisition procedures. Instead, the NMR will apply to all 8(a) contracts regardless of dollar value, and will require 8(a) participants that are nonmanufacturers to offer end items manufactured, processed, or produced by small business concerns in the United States or its outlying areas.
Continue reading at: Drinker Biddle
