Redstone Government Consulting Blog | Government Regulations (23)

Here are the Details

DoD issued a DFARs Final Rule D2019-D029 – Services Provided by Nontraditional Defense Contractors, effective October 1, 2020, to implement several sections of the National Defense Authorization Act for Fiscal Year 2017 that addresses treatment of commingled items purchased by contractors and services provided by nontraditional defense contractors as commercial items. This blog only addresses the DFARS change related to services provided by nontraditional defense contractors as commercial items.

This article is under review as a result of EO 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, signed by President Trump on January 21, 2025. As we await further information from OFCCP and the courts, please reference this article for current status and action items.

On September 22, 2020, President Trump signed an Executive Order (EO) seeking to end what is characterized in the Order as "training sessions based on race and sex stereotyping and scapegoating" in the federal workforce, the Uniformed Services, and among federal contractors. The EO provides that it will be the policy of the United States "not to promote race or sex stereotyping or scapegoating" in the federal workforce and the Uniformed Services, and not to let grant funds to be used for these purposes.

DCAA Takes the Lead Over Office of Federal Procurement Policy (OFPP)

In 2013, Congress put in place a new process for the calculation and publication of the compensation limitation (Cap) for all federal contractor employees. The process places the responsibility to calculate and publish the cap using the Bureau of Labor Statistics (BLS) Employment Cost Index (ECI) data on the Office of Federal Procurement Policy (OFPP). OFPP has failed in this responsibility for the last few years.

If your business pipeline is growing and you are issuing more subcontracts of higher values, Contractors should be aware that your organization has a duty under 48 CFR §22.805 to the Office of Federal Contract Compliance Programs (OFCCP).

Apportioning the Costs of Buildings

The SBA and Treasury have made it clear that if you own or lease a building that you sublet to another company, the portion of the lease or mortgage expense that can be used as nonpayroll costs for PPP loan forgiveness is limited to the share of the expense applied to the business who’s PPP loan is being forgiven. The simple example is, you lease an office building for $10,000 per month and sublease part of the space to another company for $2,500 per month. Only $7,500 would be used toward your nonpayroll cost for loan forgiveness. This proration applies to utility and other shared costs of the tenants.

Discover the critical aspects of mergers and acquisitions, especially for government contractors, in our latest video and article. From major milestones to essential considerations, such as FAR 31.205-27 and DFARS 231.205-70 guidelines, we've got you covered. Watch now to learn more!

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:

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.

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.

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.