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March 27, 2019 By AMK

DoD seeking comment on how ‘undefinitized contract actions’ are definitized

In the National Defense Authorization Acts for 2017 and 2018, Congress required the Department of Defense (DoD) to implement certain reforms for issuing and definitizing Undefinitized Contract Actions (UCAs). 

After a long delay, DoD has issued a proposed rule and requested comments from industry.

UCAs are meant to be used when the Government has urgent needs that do not leave enough time for the parties to agree on all the terms, conditions, and pricing of a formal contract.  In those circumstances, the parties can agree to a general framework that allows work to begin and payments to be made on a modified cost-reimbursement basis under a UCA, and the parties agree to definitize the contract in the near future – aspirationally, no later than 180 days after the UCA award date, or before 50 percent of the work is complete, whichever is earlier.  (See: DFARS 217.7404-3)

The Defense Federal Acquisition Regulation Supplement (DFARS) currently allows the contracting officer to extend that date to 180 days after the date on which the contractor submits a “qualifying proposal” for definitization.  In practice, as the GAO repeatedly has highlighted and as Congress has noted, poor acquisition planning has led to the unnecessary use of UCAs, and UCAs often are not definitized within the 180-day time set by regulation.

One particularly inequitable result of the delayed definitization of UCAs is its effect on profit.  Because UCAs are cost-type agreements with the contractor bearing minimal cost risk, the DFARS provides guidance for acceptable profit rates when “a substantial portion of the required performance” is completed before definitization.  If a contractor completes a large proportion of the work before the contract is belatedly definitized, an agency often will insist on a profit rate that is materially lower than it would have been if the agency had promptly definitized the contract.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=787536

Filed Under: Government Contracting News Tagged With: acquisition planning, cost-type contract, definitization, DFARS, GAO, profit, UCA, undefinitized, undefinitized contract action

July 9, 2015 By AMK

Commerce Dept. not accurately reporting contracting data to FPDS-NG database

The Commerce Department isn’t accurately reporting contracting data to the federal government’s main procurement database, says a recent Commerce inspector general report.

Commerce Dept.The IG originally initiated the investigation to determine whether contracting officials effectively managed undefinitized actions, or a contract for which the terms, specifications or price are not agreed upon before the work is started. Undefinitized actions are only meant to be used to meet an urgent requirement, the report says.

But because NOAA and NIST incorrectly coded some of their contract actions as undefinitized in the Federal Procurement Data System-Next Generation, or FPDS-NG, the IG redirected the investigation to see how much of the reported data is accurate.

Keep reading this article at: http://www.fiercegovernment.com/story/ig-commerce-not-accurately-reporting-contracting-data-fpds-ng-database/2015-06-25

Filed Under: Government Contracting News Tagged With: Commerce Dept., FPDS, NIST, NOAA, undefinitized

August 1, 2013 By AMK

DoD report shows no cost difference when using cost-plus or fixed-price contracts

The first annual Defense Department acquisition report shows there is no  statistical correlation between rise in cost of schedule or cost growth and the  cost-plus or fixed-price contract types.

Between 1970 and 2011, fixed-price contracts did not exhibit a significantly  different cost growth than cost-reimbursable contracts, the June 28 report says.

During the same period, data shows that there is no significant difference in  between cost-reimbursable and fixed-price contracts with respect to schedule  growth on development contracts, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/dod-report-shows-no-cost-difference-when-using-cost-plus-or-fixed-price-con/2013-07-11

 

Filed Under: Government Contracting News Tagged With: AT&L, cost overrun, cost reimbursement, cost-plus, fixed price, undefinitized

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