The Contracting Education Academy

Contracting Academy Logo
  • Home
  • Training & Education
  • Services
  • Contact Us
You are here: Home / Archives for IR&D

November 18, 2016 By AMK

Proposed IR&D DFARS rule would competitively punish technology innovators

A proposed Department of Defense rule is causing contractors to evaluate their independent research and development (IR&D) overhead rates and competitive bid strategies.

US DoD logoUnderstanding that it will punish innovative contractors for engaging in independent research and development (IR&D) and taking on risks that would otherwise be borne by the government, on November 4, 2016, the U.S. Department of Defense (DoD) proposed a rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to “ensure that substantial future independent research and development expenses, as a means to reduce evaluated bid prices in competitive sources selections, are evaluated in a uniform way during competitive source selections.”

In essence, DoD wants to ensure that the government’s possible reimbursement of allowable IR&D overhead costs is reflected in a contractor’s total evaluated offer price for competitively awarded contracts to create a level playing field where none, for good reason, has previously existed.

This proposed rule was issued after DoD had requested input on concepts for how to evaluate contracts that relied upon IR&D and the near universal industry condemnation of these concepts. Rejecting industry’s opposition, the proposed rule would significantly reduce contractor incentives to engage in IR&D by reducing the benefits contractors receive from successful IR&D projects. In light of these proposed changes, contractors should immediately evaluate their IR&D and competitive bid strategies on the assumption that this proposed rule will be made final in the near future.

For major defense acquisition programs and major automated information systems acquisitions, the proposed rule would require that contracting officers adjust upward a contractor’s total evaluated offer price to the extent the contractor is expected to rely upon future IR&D costs to reduce its proposed price. Accordingly, in order to support this objective, the proposed rule requires an offeror to “include documentation in its price proposal to support this proposed approach” of using IR&D to meet contract requirements. The rule would apply to contracts above the simplified acquisition threshold, but would not apply to contracts for commercial items.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=543898

Filed Under: Government Contracting News Tagged With: commercial item, DFARS, DoD, IR&D, overhead rate, R&D, SAP

March 3, 2016 By AMK

DoD proposes DFARS amendment to create awareness of contractors’ independent R&D

The Department of Defense (DoD) is proposing to amend to the Defense Federal Acquisition Regulation Supplement (DFARS) such that defense contractors will be required to give notice of proposed Independent Research and Development (IR&D) projects.

Federal RegisterIn a Federal Register notice published on Feb. 16, 2016, DoD explained that proposed rule aims to increase awareness of the relevance of and potential interest by the military in opportunities created by IR&D investments.

US DoD logoAccording to the notice, the government treats investments made by defense companies as allowable costs.  If adopted, the rule will require Defense contractors to inform DoD staff of the outcomes of completed IR&D projects.  “The objective of this engagement is to ensure that both IR&D performers and their potential DoD customers have sufficient awareness of each other’s efforts and to provide industry with some feedback on the relevance of proposed and completed IR&D work,” according to the proposed rule.

Industry comments on the proposed rule are due Apr. 18, 2016.  Comments may be submitted via the Federal eRulemaking portal by entering “DFARS Case 2016-D002” under the heading “Enter keyword or ID” and selecting “Search.” Select the link “Submit a Comment” that corresponds with “DFARS Case 2016-D002.” Follow the instructions provided at the “Submit a Comment” screen.

Filed Under: Government Contracting News Tagged With: DFARS, DoD, independent research and development, IR&D, proposed rule, research

Popular Topics

abuse acquisition reform acquisition strategy acquisition training acquisition workforce Air Force Army AT&L bid protest budget budget cuts competition cybersecurity DAU DFARS DHS DoD DOJ FAR fraud GAO Georgia Tech GSA GSA Schedule GSA Schedules IG industrial base information technology innovation IT Justice Dept. Navy NDAA OFPP OMB OTA Pentagon procurement reform protest SBA sequestration small business spending technology VA
Contracting Academy Logo
75 Fifth Street, NW, Suite 300
Atlanta, GA 30308
info@ContractingAcademy.gatech.edu
Phone: 404-894-6109
Fax: 404-410-6885

RSS Twitter

Search this Website

Copyright © 2023 · Georgia Tech - Enterprise Innovation Institute