On May 4, 2018, the Department of Defense (“DoD”) issued a final rule amending the Defense Federal Acquisition Regulation Supplement (“DFARS”) to state that, in the interest of promoting voluntary disclosures of defective pricing identified by contractors after contract award, DoD contracting officers have more discretion to determine the scope of the involvement of the Defense Contract Audit Agency (“DCAA”) in assessing such a disclosure. 83 Fed. Reg. 19645. This is a change from DoD’s November 2015 proposed rule, which required contracting officers to request at least a limited-scope audit when a contractor voluntarily discloses defective pricing. While arguably a step in the right direction, the permissive language of the final rule continues to provide only limited information to defense contractors about what to expect following a voluntary defective pricing disclosure. Nonetheless, by listing the types of information that the contracting officer must consider when deciding whether to request an audit, the rule arms contractors with potentially impactful information.

Continue Reading DoD Final Rule to Promote Post-Award Disclosure of Defective Pricing Arms Contractors with Potentially Impactful Information

Pursuant to the Truth in Negotiations Act (TINA), contractors are required to submit current, accurate, and complete cost or pricing data when negotiating certain contracts with the Government.  On November 20, the Department of Defense (DoD) published a proposed rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS).  The change would require DoD contracting officers to request a limited-scope audit if a contractor voluntarily discloses defective pricing,[1] unless a full-scope audit is “appropriate for the circumstances.”  In theory, if the rule is implemented, contracting officer would have the flexibility to focus an audit on the defective portions disclosed by the contractor and not reexamine all previously provided pricing data.  Though the proposed rule appears to be DoD’s attempt to provide limited relief to defense contractors facing significant regulatory burdens under TINA, it is not clear the rule as written will provide any such relief.
Continue Reading DoD Proposes DFARS Changes in Attempt to Promote Voluntary Disclosure of Defective Pricing