Government Contracts DoD Class Deviation Requires Use of Fixed-Price Contracts
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Wednesday, December 19, 2018

DoD Class Deviation Requires Use of Fixed-Price Contracts

By Government Contracts Editorial Staff

Department of Defense Class Deviation 2019-O0001 requires contracting officers to first consider the use of fixed-price contracts, including fixed-price incentive contracts, when determining what type of contract to award. Unless approved by the head of the contracting activity, COs may not award cost-reimbursement contracts in excess of $50 million to be awarded after October 1, 2018, and before October 1, 2019, and cost-reimbursement contracts in excess of $25 million to be awarded on or after October 1, 2019. The Under Secretary of Defense for Acquisition and Sustainment has determined that the use of cost type contracts is approved for research and development valued in excess of $25 million, if the CO executes a written determination that the level of program risk does not permit realistic pricing and it is not possible to provide an equitable and sensible allocation of program risk between the government and the contractor. This class deviation, which implements section 829 of the National Defense Authorization Act for Fiscal Year 2017 (PL 114-328), went into effect November 27, 2018. It will remain in effect until it is incorporated in the Defense Federal Acquisition Regulation Supplement, or until it is otherwise rescinded. For the text of the deviation, see ¶70,245.95.

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