What Could Defense Production Act Mean?

The President has announced he has invoked the 1950 Defense Production Act (DPA).  This act provides the Government with the ability to direct businesses to accept contracts and increase the production of necessary goods and services.  The act has been used numerous times since 1950 to support emergencies, including natural disasters and the war on terrorism.  The current fight with COVID-19 has necessitated it once again.  A July 28, 2014, Congressional Research Service paper titled “The Defense Production Act of 1950: History, Authorities, and Reauthorization” summarized the current act to include:

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Topics: Contracts Administration, Government Regulations, COVID-19

What is the Focus of a Billing System Audit Coverage?

Back in the days of DCAA ICAPS audits, the billing system was a standalone audit program.  Even DCAA’s first pass at auditing for compliance with DFARS 252.242-7006 provided a standalone sub-assignment for the coverage of contractor billing systems.

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Topics: Contracts Administration, Accounting & Billing System, Government Regulations

What Are the Rules with Directly Associated Cost?

FAR 31.201-6(a) and CAS 9904.405-30(a) both define directly associated cost as “any cost which is generated solely as a result of incurring another cost, and which would not have been incurred had the other cost not been incurred.”  FAR 31.201-6(a) restates the definition replacing the word “which” with the word “that.”  Still a consistent view of what directly associated cost means.

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Topics: Contracts Administration, Government Regulations

Forward Pricing Rate Proposal: What is the Process and How to get an Agreement on Rates

There is much confusion and frustration on behalf of a contractor when it comes to forward pricing rate proposals (FPRP) and forward pricing rate agreements (FPRA).  This confusion and frustration comes from the lack of direction provided for this process in the FAR.  In this blog, we pull together the regulation and guidance associated with forward pricing so contractors can better understand the process and alleviate some of the frustration and questions which we see often.

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Topics: Contracts Administration, Government Regulations

WTO Authorizes US Tariffs in Boeing/Airbus Decision: Retaliatory Tariffs are Coming

The World Trade Organization (WTO) issued an arbitration decision in European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/ARB. The decision authorized the United States to impose $7.5 billion in tariffs, beginning October 18th, 2019, on EU imports due to EU subsidies to Airbus, making the ruling the largest in the WTO’s history.

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Topics: Government Regulations

DOL Announces New Overtime Rule

After over three years of waiting, on September 24th, 2019 the Department of Labor released its long-awaited final overtime rule,  increasing the standard salary threshold for exempt status to $684 per week (up from the current $455 per week floor), or $35,568 per year on an annual basis. The new rule takes effect on January 1st, 2020, providing the first overtime salary adjustment in more than 10 years.

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Topics: DCAA Audit Support, Accounting & Billing System, Government Regulations

Non-Tariff Supply-Chain Restrictions on IT/Telecom Products and Services (Part 3 of 3)

Future Supply-Chain Rules to Be Implemented Under Executive Order 13873, and Under Sections 889(a)(1)(B) and 889(b) of the 2019 NDAA

There have been several recent developments in U.S. law, relating to non-tariff restrictions on foreign-origin information technology and telecommunications equipment, with a focus on Chinese-origin products. This is the third installment of a three-part series on this topic.

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Topics: Defense Contractors, DFARS Business Systems, Government Regulations, Export and Import

Understanding Which Thresholds Apply to Your Government Contracts

All too often, contractors have a dilemma as to which changing dollar threshold should be inserted into company policy.  You may recall that there has been considerable debate around changing dollar thresholds around TINA, CAS, and even the executive comp ceiling from a few years back.  There is now a proposed rule before the FAR Council is seeking to eliminate this confusion.  This rule will also reduce the administrative workload in processing changing dollar thresholds throughout the FAR.  

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Topics: Contracts Administration, Government Regulations

Non-Tariff Supply-Chain Restrictions on IT/Telecom Products and Services (Part 2 of 3)

Supply-Chain Rules from Section 889(a)(1)(A) of the NDAA for 2019 (Implemented by FAR Subpart 4.21)

There have been several recent developments in U.S. law, relating to non-tariff restrictions on foreign-origin information technology and telecommunications equipment, with a focus on Chinese-origin products. This is the second installment of a three-part series on this topic.

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Topics: Defense Contractors, DFARS Business Systems, Government Regulations, Export and Import

DCAA’s Renewed Challenge to Lowest Available Airfare: “Déjà vu All Over Again”

A recent DCAA audit reintroduced (or resurrected) a DCAA MRD (Memorandum for Regional Directors) dated March 22, 2010 which provided auditors with DCAA’s liberal interpretation of a January 2010 change to FAR 31.205-46(b) limiting allowable airfare to “lowest priced airfare available to the contractor.”

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Topics: Cost and Pricing and Budgeting, Government Regulations