During the last months of 2016, a number of new rules became effective that may affect government contracts. This post summarizes those new rules and tells you where to find additional information.
Final rule about enhancing effectiveness of independent research and development
On November 4, 2016, a new rule became effective about efforts to enhance the effectiveness of independent research and development (IR&D) with U.S. Department of Defense (DoD) contracts. The rule affects IR&D projects initiated during fiscal year 2017 or later. The rule requires contractors to engage in technical interchanges to promote communication between IR&D contractors and the DoD. 81 FR 78,008 (November 4, 2016).
Proposed rule about IR&D expenses
In addition to the new rule, a proposed rule about accounting and IR&D expenses was issued as well. The proposed rule would require IR&D expenses to be considered as part of the final price for competitive procurements. The rule is designed to provide a more consistent and fair evaluation of bids involving IR&D. Under the proposed rule, contracting officers would be allowed to adjust the total evaluated price of proposals for (1) major defense acquisitions programs and (2) major automated information systems. For evaluation purposes only, the adjustment would include the amount that offerors propose that IR&D programs will cost. 81 FR 78,014 (November 11, 2016).
Greenhouse gas (GHG) emissions
On November 18, 2016, a new rule became effective that requires federal contractors that receive $7.5 million or more in contract awards during a prior fiscal year to indicate whether they publicly disclose their GHG emissions and their GHG emissions goals. This order implements Executive Order 13693, aimed at reducing GHG emissions by 40% by 2025. 81 FR 83,092 (November 11, 2016).
Interim rule changed about MPNDI program
On November 4, 2016, an interim rule was published about a pilot program for the acquisition of military purpose nondevelopmental items (MPNDIs). This program is designed to increase the number of nontraditional defense contractors that are small businesses. The main effect of this new interim rule is to increase the contract award threshold from $53.3 million to $100 million, thereby increasing the number of small businesses eligible to participate. 81 FR 78,012 (November 4, 2016).
Arms embargoes lifted against certain countries
On November 4, 2016, a final rule announced that certain countries will no longer have embargoes against them: Cote D’Ivoire, Liberia, Sri Lanka, and Vietnam. Government contractors are now free to import defense articles from these countries and export defense articles to these countries. The rule also recognized that India had formally acceded to the Missile Technology Control Regime (MTCR), thereby clarifying its status under the Export Administration Act (EAR). 81 FR 76,859 (November 11, 2016).
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