Defense Dept. orders new limits on T&M contracts.The Defense Department has imposed new restrictions on time-and-materials contracts for non-commercial A non-commercial enterprise is work that values other considerations above and beyond that of making a profit. It differs from a non-profit enterprise in that seeking a profit is a part of their business, just not the main part. services, requiring that the contracts only be used when "no other contract type is suitable." A final rule published in the Jan. 24 Federal Register says the same restrictions now apply to all DOD (1) (Dial On Demand) A feature that allows a device to automatically dial a telephone number. For example, an ISDN router with dial on demand will automatically dial up the ISP when it senses IP traffic destined for the Internet. contracts for services, whether they are commercial or non-commercial, including orders under indefinite-delivery contracts. Critics argue that time-and-materials contracts give contractors no incentive to hold down costs, and expose the government to the risk of excess costs. Before a T&M contract can be used, the rule requires a contracting officer A US military officer or civilian employee who has a valid appointment as a contracting officer under the provisions of the Federal Acquisition Regulation. The individual has the authority to enter into and administer contracts and determinations as well as findings about such contracts. to execute a determination and finding "that it is not possible at the time of placing the contract or order to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of certainty." In addition, the contract must be structured to minimize the use of time-and-materials requirements, such as by limiting the value or length of the T&M portion of the contract or establishing fixed prices for part of the requirement. The Government Accountability Office The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress, and thus an agency in the Legislative Branch of the United States Government. found last year that the Defense Department used T&M contracts extensively in three categories of services: professional, administrative, and management support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services ; information technology and communications; and equipment maintenance and repair. "DOD is turning to time-and-materials contracts because they can be awarded quickly and labor hours or categories can be adjusted if requirements are unclear or funding uncertain," GAO said. But a survey of federal acquisition officials by the consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a Grant Thornton found 60% of them believe restrictions on T&M contracts would not improve contracting. (More on the survey, p. 2.) |
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