Earlier this week, the GAO issued a report to members of the House and Senate Appropriations Committees regarding the Air Force’s compliance with definitization and reporting requirements associated with the use of undefinitized contract actions (“UCAs”).  UCAs, which commonly take the form of letter contracts, allow contractors to begin performance and seek payment before all contract terms, specifications, and prices are settled.  This relatively flexible contract vehicle helps ensure that contract negotiations do not interfere with the Government’s ability to secure contractor performance in support of urgent needs.  The use of UCAs accounted for six percent of contract obligations by the Department of Defense (“DOD”) during fiscal years 2010 to 2014, with the Air Force obligating $14 billion (excluding Foreign Military Sales) on UCAs during that same period.
Continue Reading Renewed Pressure to Definitize Letter Contracts