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On October 28, 2022, the Department of Defense (DoD) amended the Defense Federal Acquisition Regulation Supplement (DFARS) by issuing two final rules related to contract cost and pricing.  Specifically:

  • Requiring Data Other Than Certified Cost or Pricing Data – DoD issued a final rule to implement a section of the Fiscal Year (FY) 2020 National Defense Authorization Act (NDAA) relating to the submission of data other than certified cost or pricing data (e.g., in connection with pricing actions for commercial products or services, which are exempt from the requirement to disclose certified cost or pricing data).  The new rule prohibits contracting officers (COs) from relying only on historical prices paid by the Government to determine that the price of a contract or subcontract is “fair and reasonable,” and requires COs to consider other factors in addition to historical prices paid.  The rule also states that offerors must make a good faith effort to comply with a CO’s reasonable request to furnish data other than certified cost or pricing data, but this requirement may be waived by the head of contracting activity if he or she determines that it is “in the best interest of the Government” to make the award.  Finally, the rule requires the Government to include a note on contractors’ past performance evaluations in the Contractor Performance Assessment Reporting System (CPARS) if they have denied multiple Government requests for submission of data other than certified cost or pricing data in the preceding three-year period but still received an award.  The new rule raises questions regarding what it means for a request for other than certified cost or pricing data to be “reasonable,” and what a contractor must do to make a “good faith effort” to comply with the request (particularly if the contractor believes that the request is not reasonable).
  • Repeal of Preference for Fixed-Price Contracts – DoD issued a final rule repealing preferences for the use of fixed-price contracts.  Implementing section 817 of the FY 2022 NDAA, which repealed section 829 of the FY 2017 NDAA, the rule removes language from DFARS Part 216 (Types of Contracts) and Part 235 (Research and Development Contracting) that favored the use of fixed-price contracts, including fixed-price incentive contracts.  The new rule also removes a DoD requirement for approval by the head of the contracting activity before issuance of a cost-reimbursement contract greater than $25 million.  These changes give the DoD greater contracting flexibility, but time will tell whether it results in increased use of cost-reimbursement contracts.
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Photo of Nicole Owren-Wiest Nicole Owren-Wiest

Nicole Owren-Wiest is a partner and member of the Steering Committee of Crowell & Moring’s Government Contracts Group in the firm’s Washington, D.C. office. Nicole is nationally ranked by Chambers USA in Government Contracts and a recognized leader in two of the most…

Nicole Owren-Wiest is a partner and member of the Steering Committee of Crowell & Moring’s Government Contracts Group in the firm’s Washington, D.C. office. Nicole is nationally ranked by Chambers USA in Government Contracts and a recognized leader in two of the most complex areas in government contracting: accounting, cost, and pricing, and intellectual property/data rights. With over 20 years’ experience, Nicole has a broad counseling and dispute-resolution practice and leads the Group’s cost accounting practice, which focuses on helping clients navigate the government’s complex cost and pricing rules, including the FAR Part 31 cost principles, the Cost Accounting Standards (CAS), and Truth in Negotiations Act/Truthful Cost or Pricing Data (defective pricing).

Photo of Christian Curran Christian Curran

Christian N. Curran is a partner in Crowell & Moring’s Washington, D.C. office, where he practices in the Government Contracts Group. His practice focuses on government contracts litigation and counseling, including bid protests, government investigations, and compliance with federal and state procurement laws…

Christian N. Curran is a partner in Crowell & Moring’s Washington, D.C. office, where he practices in the Government Contracts Group. His practice focuses on government contracts litigation and counseling, including bid protests, government investigations, and compliance with federal and state procurement laws and regulations.

Christian has broad experience in the government contracts arena, including bid protest litigation at both the Government Accountability Office and the Court of Federal Claims, contract claims before the Armed Services Board of Contract Appeals, prime-sub disputes, internal investigations, mandatory disclosures, transactional due diligence, Defense Contract Audit Agency audits, and compliance assessments. He also has experience in both traditional litigation and alternative dispute resolution forums, including international arbitration and mediation, and administrative proceedings before various government agencies.

Photo of Erin Rankin Erin Rankin

Erin Rankin is counsel in the Government Contracts Group and is experienced in resolving government contract disputes with a particular focus on cost allowability, cost accounting issues, and DCAA audit findings. Erin also advises clients on all aspects of FAR and DFARS compliance…

Erin Rankin is counsel in the Government Contracts Group and is experienced in resolving government contract disputes with a particular focus on cost allowability, cost accounting issues, and DCAA audit findings. Erin also advises clients on all aspects of FAR and DFARS compliance in connection with the administration, performance, and closing out of government contracts. Erin has extensive experience representing government contractors before the Boards of Contract Appeals, defending companies against False Claims Act allegations, conducting internal investigations, and advocating for clients in mandatory disclosures and suspension and debarment proceedings.

Photo of Catherine Shames Catherine Shames

Catherine O. Shames is an associate in the Washington, D.C. office of Crowell & Moring, where she is a member of the firm’s Government Contracts Group.

Catherine’s government contracts practice focuses on contract claims/disputes under the Contract Disputes Act (CDA), prime-sub disputes, transactional…

Catherine O. Shames is an associate in the Washington, D.C. office of Crowell & Moring, where she is a member of the firm’s Government Contracts Group.

Catherine’s government contracts practice focuses on contract claims/disputes under the Contract Disputes Act (CDA), prime-sub disputes, transactional due diligence, internal investigations, and disclosures under the Mandatory Disclosure Rule. She also assists contractors with cost allowability issues and responding to DCAA audits.

Photo of Rina Gashaw Rina Gashaw

Rina M. Gashaw is an associate in the firm’s Washington, D.C. office, where she is a member of the Government Contracts Group. Rina’s practice focuses on a range of government contracts issues, including government investigations, client counseling, and providing government contracts due diligence…

Rina M. Gashaw is an associate in the firm’s Washington, D.C. office, where she is a member of the Government Contracts Group. Rina’s practice focuses on a range of government contracts issues, including government investigations, client counseling, and providing government contracts due diligence in transactional matters. Her practice also includes bid protests before the Government Accountability Office and the U.S. Court of Federal Claims.