A key contractors trade group has accused the Pentagon of misinterpreting a 2011 law designed to limit the labor and overhead rates that companies charge for defense weapons and services.
The Professional Services Council in a Sept. 18 letter to Undersecretary of Defense Frank Kendall charged that departmental guidance issued July 31 is misapplying the 2011 National Defense Authorization Act.
The law directed the Defense Department to establish a negotiation objective on contracts for new services or task and delivery orders of $10 million or more, with the aim of capping contractor labor and overhead rates at fiscal 2010 levels.
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