2017 is a significant year for Department of Defense (DoD) contractors, as Defense Federal Acquisition Regulation Supplement (DFARS) compliance is required “as soon as practical, but no later than December 31, 2017 (252.204-7012.ii.A).” DFARS clause 252.204-7008 addresses requirements for safeguarding covered defense information controls in government contractor systems. Covered defense information is a broad term for unclassified controlled technical information or other Controlled Unclassified Information (CUI), which has protection and dissemination requirements. Clause 252.204-7012 expands on these safeguards to include cyber incident reporting requirements. These mandatory controls are detailed in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171: Protecting Controlled Unclassified Information in Non-Federal Information Systems and Organizations.
In what appeared to be a response to industry complaints that new Defense Department rules would disincentivize companies from embarking on new research projects on their own initiative, the Pentagon is developing a new web portal to make it easier for firms to let the government know about their independent research & development (IR&D) activities.
At issue is a final rule DoD published in November. Reasoning that the government needs more insight into the more than $4 billion in reimbursements it issues to contractors for IR&D projects each year, DoD required large firms to hold a “technical interchange” with at least one DoD official before starting work on a R&D project — at least if they wanted to be reimbursed for their allowable costs.
The ban on using DCAA staff for non-DoD agencies has been lifted. DCAA may once again provide full audit support to other agencies effective October 1, 2016, as posted on September 30th as a Memorandum for Regional Directors (MRD).
DCAA lifted the ban because they reached their 18 month goal to reduce the Incurred Cost Submission (ICS) inventory.
What will this mean for contractors? Will halted previous agency audits rise from the dead? Or will DCAA review accounting and business systems for upcoming proposals? Time will tell if this is more of a sweet treat or terrible trick.
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On September 2, 2016, Defense Procurement and Acquisition Policy (DPAP) Director, Claire M. Grady, issued a guidance memo concerning commercial item determinations and the determination of price reasonableness for commercial items. The memo begins by noting the proposed rule issued August 11, 2016 under DFARS Case 2016-D006 implementing Sections 851-853 and 855-857 of the FY 2016 National Defense Authorization Act (NDAA) and, among other things, providing guidance to contracting officers concerning price reasonableness and commercial item determinations. That DFARS Case is currently making its way through the rulemaking process. In the meantime, this DPAP guidance is intended to address the underlying tenets of that legislation to improve consistency and timeliness.