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DARS Removes DFARS ‘Technical Interchange’ Requirement for IR&D Cost Reimbursement

The Defense Department’s Defense Acquisition Regulations System has announced the issuance of a new rule making it easier for major contractors to be reimbursed for costs incurred when conducting independent research and development activities.

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DARS said Friday in a document posted on the Federal Register that it was amending Defense Federal Acquisition Regulation Supplement subpart 231, removing a subsection requiring major contractors to first conduct and document a “technical interchange” with government representatives about IR&D efforts in order for their attendant costs to be deemed allowable.

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The pertinent DFARS provision affects IR&D projects carried out from fiscal year 2017 onwards.

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DARS described the regulation to be potentially “significantly burdensome” for contractors seeking to include R&D costs in their billing and said its removal “will result in freeing contractors to pursue IR&D projects without including the Government in those preliminary decisions.”

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DARS pointed out, however, that the new rule “only removes an unneeded requirement” and “does not impose any new requirements on contracts at or below the simplified acquisition threshold and for commercial items, including commercially available off-the-shelf items.”

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