Redstone Government Consulting Blog | DFARS Business Systems

President Trump issued several executive orders addressing tariffs. American First Trade Policy dated January 20, 2025 and Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment dated April 9, 2025. In addition, he has also issued a 90-day pause to some countries and is planning to reduce tariffs on certain industries such as US auto tariffs (see Amendments to Adjusting Imports of Automobiles and Automobile Parts into the United States dated April 29, 2025). It is clear that tariffs are impacting the supply chain and government contractors.

Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Export & Import, Federal Acquisition Regulation (FAR), Manufacturing Operations Consulting

Well one of the endless numbers of administratively burdensome requirements the Federal Government places on your contracts may just be the silver bullet you need. Review your contracts and look for FAR 52.225-8, Duty-Free Entry, and DFARS 252.225-7013, Duty-Free Entry.

Topics: Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Export & Import, Federal Acquisition Regulation (FAR)

Terminated contracts do not relieve a contractor from dispositioning and closing out Government property. This will become a bigger issue as more and more agencies receive funding cuts or contracts are simply terminated.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Government Property Management, Federal Acquisition Regulation (FAR)

There is no definition of split purchases in the Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation Supplement (DFARS). However, the Defense Contract Management Agency reviews purchase order files for split purchases during a Contractor Purchasing System Review. The Government considers a split purchase when a contractor intentionally breaks down a requirement to stay under a regulatory threshold (e.g., micro-purchase, simplified acquisition threshold, or Truthful Cost or Pricing Data Act (TINA)) in order to circumvent procurement requirements or avoid having to compete.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR)

The Federal Funding and Accountability Transparency Act (FFATA) requires prime contractors to report their first-tier subcontracts and grant recipients to report their first-tier subawards using the Federal Funding and Accountability Transparency Act Subaward Reporting System website.

Topics: Employee & Contractor Compensation, Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), System Award Management (SAM), Government Regulations, Federal Acquisition Regulation (FAR)

Does the Government find most of the cost incurred by a contractor to be reasonable? I must say it does appear that way. Defense Contract Audit Agency (DCAA) FY 2023 Report to Congress shows that of the $186B incurred cost audited, there was only $1.1B in audit exceptions (.6%). So, the world is good, and we can move on. If that were only the case. Remember that while this percentage is low, this is money you have already spent that the Government will not pay you for, which directly impacts your bottom line.

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

The FAR Council issued a proposed rule on January 15, 2025, to expand the CUI requirements into FAR under Executive Order 13556 Controlled Unclassified Information. Controlled Unclassified Information is information that the government creates or possesses, or that an entity creates or possesses for or on behalf of the government, that a law, regulation, or governmentwide policy requires or permits an agency to handle using safeguarding or dissemination controls. CUI may not be released to the public.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Cybersecurity

We have had several clients tell us they have purchase orders under the Truthful Cost or Pricing Data (TINA) threshold for what they believe to be commercial purchases. They run a quick search on the purchase order (PO) and find there are no Federal Acquisition (FAR) or Defense FAR Supplement (DFARS) clauses in the agreement even though the prime contract is to the U.S. Government.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Federal Acquisition Regulation (FAR)

The FAR Council issued a proposed rule on November 29, 2024 to amend the FAR to increase acquisition related thresholds for inflation.

Topics: Proposal Cost Volume Development & Pricing, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Estimating System Compliance

The Government wants to pay a fair and reasonable price for products and services that they purchase and expects you to pay your suppliers a fair and reasonable price. FAR 52.244-5 Competition in Subcontracting includes the requirement to select subcontractors and suppliers on a competitive basis to the maximum extent possible. What happens when you receive only one bid or there is only one source that can perform the effort? Well, the purchase becomes sole source – and yes, the requirements have just increased significantly. If the purchase exceeds the micro-purchase threshold, yes $10,000, you must document the justification as sole source. While it sounds pretty simple, for example, when the customer directs a part to be purchased from a specific supplier, you just check the box “customer directed” and move on. Oh, if that were only the case. Even when a purchase is customer directed, more documentation is necessary. It is never as easy as checking a box. When you are directed to buy from a supplier, you must still document the price is fair and reasonable. If the price is not fair and reasonable, it is your job to inform the government.

Topics: DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR)