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DoD Amends Contractor Withholding Plan

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The Defense Department is amending its plan to take 10 percent off payments to contractors if business systems that companies have supplied are deficient, according to a report in Federal Times.

Instead — in perhaps a touch of holiday-spirit generosity or, more likely, the outcry from companies when the original plan was proposed – DoD will lower that amount to 5 percent. The withholding from small businesses will be 2 percent.

For high-risk deficiencies, the maximum withholding has been reduced to 20 percent, down from 100 percent spelled out in the original plan.

The revised plan generally does a “much better job of laying out the attributes of each of these business systems” and then linking enforcement to compliance with those attributes, said Alan Chvotkin, executive vice president and counsel at contracting trade group the Professional Services Council, according to Federal Times.

But not everyone is giving the new rules a ringing endorsement.

Scott Amey, general counsel at the government watchdog group The Project on Government Oversight, told Federal Times the rule changes represented a “giant step backward,” and said the rule changes pushed back the date of actual implementation even further.

DoD will seek comments on the new proposal until Jan. 10.

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