Government Contracts DoD Rule Would Require Preference for Use of Fixed-Price Contracts
Thursday, April 18, 2019

DoD Rule Would Require Preference for Use of Fixed-Price Contracts

By Government Contracts Editorial Staff

A Department of Defense proposed rule would amend the Defense Federal Acquisition Supplement to require a preference for the use of fixed-price contracts in the determination of contract type, require review and approval for certain cost-reimbursement contract types at specified thresholds and established time periods, and require the use of firm fixed-price contract types for foreign military sales unless an exception or waiver applies. The rule implements sections 829 and 830 of the National Defense Authorization Act for Fiscal Year 2017 (PL 114-328).

Amendments. The rule would amend DFARS 202.101 to add the definition of “milestone decision authority”; add a reference at DFARS 216.102(1) to inform contracting officers of the new requirements when selecting contract types; add a reference at DFARS 216.104-70 for the new research and development contract type approval requirements; incorporate the exception on the use of cost-reimbursement contracts for R&D at DFARS 216.301-3(2); incorporate a reference at DFARS 217.202 on the use of options for FMS requirements and for sole source major systems for United States and U.S./FMS combined procurements; add new DFARS 225.7301-1 to implement section 830; provide guidance at DFARS 225.7301-2 on the review requirements; revise DFARS 234.004(2)(ii)(A) to reflect the new organization Under Secretary of Defense for Acquisition and Sustainment; and incorporate the approval on the authority to use cost-reimbursement contracts for R&D in excess of $25 million. Comments on the proposed rule are due May 31, 2019, and must reference DFARS Case 2017-D024. The text of the rule appears at ¶70,020.427.

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