U.S. regulatory fallout from this decade's sometimes wasteful defense contracting continues in Washington as rule makers crystallize new requirements for Defense Department awards.
The Civilian Agency Acquisition and Defense Acquisition Regulations councils announced more moves last week stemming from 2007 law and White House guidance.
Regulators offered more guidance over tying award fees to acquisition objectives in the areas of cost, schedule and technical performance, as well as analysis required in determining whether to use an award or incentive fee type contract and other restrictions.
These changes, enacted under 2007 and 2009 defense authorization measures and promulgated by the White House Office of Federal Procurement Policy late in 2007, will affect contracts newly awarded, rule makers said Oct. 14.
Another interim rule with similar origins looks to prescribe regulations to minimize excessive “pass-through” charges by contractors from subcontractors. Pass-through charges became a concern mid-decade when federal auditors and lawmakers drew attention to specific defense contracts where prime contractors appeared to pass off almost all of the work to another company, but not before pocketing a government payment.
In April 2007, DOD issued an interim rule that allows it to recoup contractor payments that contracting officers determine to be excessive on all eligible contracts. The rule specifically requires contracting officers to insert a clause in contracts that allows recovery of excessive payments and contractors to report detailed information on their value added when subcontracting reaches 70 percent or more of the total contract cost.