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You are here: Home / Government Contracting News / Army contracting personnel weren’t aware of contracting rule

September 6, 2013 By AMK

Army contracting personnel weren’t aware of contracting rule

Army contracting personnel didn’t adhere to a new rule during their work on  contracts worth about $10.5 billion because they weren’t aware of it, a report  from the Defense Department office of inspector general says.

The rule, first implemented on an interim basis in March 2011, affects  cost-reimbursement contracts, where contractors are paid for costs incurred  during the fulfillment of the contract–as opposed to fixed-price contracts.  Under the Federal Acquisition Regulation, a cost-reimbursement contract is  acceptable only when uncertainties surrounding the contract prevent an accurate estimate of its cost.

The rule requires that DoD contracting personnel obtain approval for  cost-reimbursements contracts at one level above the contracting officer or  higher. They also have to document that approval.

Additionally, contracting personnel have to justify the use of a  cost-reimbursement contract and document its potential to transition to a  fixed-price contract. The rule also requires documentation that there are  adequate resources to manage a cost-reimbursement contract.

The interim rule became a final rule, without significant changes, in March  2012, but the OIG audit only covered the nearly year-long period where it was  still an interim rule.

Keep reading this article at: http://www.fiercegovernment.com/story/army-contracting-personnel-werent-aware-contracting-rule/2013-08-27

Filed Under: Government Contracting News Tagged With: Army, cost estimate, cost reimbursement, DoD, FAR, fixed price, incentive, OIG

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