• Increase font size
  • Default font size
  • Decrease font size
Home News Archive DFARS Clauses Going Bye-Bye

DFARS Clauses Going Bye-Bye

E-mail Print PDF

On February 24, 2017, the President signed Executive Order (E.O.) #13777, “Enforcing the Regulatory Reform Agenda,” which established a Federal policy “to alleviate unnecessary regulatory burdens” on the American people. To carry out the POTUS’s E.O., the DoD established a “Regulatory Reform Task Force” and solicited public input. Surprisingly, the Task Force listened to the public input (at least, they listened to some of the public input) and we are now—a year after the Task Force was established—seeing the elimination of a couple of DFARS clauses.

The first clause to go bye-bye is 252.247-7006 (“Removal of Contractor's Employees”). The final rule eliminating that clause is here. According to the rule-makers (or “rule-killers,” if you will)—

The DFARS clause served as an agreement from the contractor to only use experienced, responsible, and capable people to perform the work under the stevedoring contract. The clause also advised the contractor that the contracting officer may require the contractor to remove from the job, employees who endanger persons or property or whose employment is inconsistent with the interest of military security. [However] the information conveyed in DFARS clause 252.247-7006 is directly related to performance of the work under a stevedoring contract. It is more appropriate to define what the Government considers an experienced, responsible, and capable employee to be in a performance work statement, not a contract clause, because those requirements may change depending on various factors of the work being performed. If the need to remove employees from performing under the contract exists, it should be identified in the performance work statement. The removal and replacement of employees directly relates to the contractor's ability to perform and staff the work under the contract. As such, this DFARS clause is unnecessary and can be removed.

The contract clause has been around since 1991. Apparently, DoD is just now realizing—with a push from POTUS—that the clause is unnecessary. And you thought the CAS Board moved slowly!

The second bit of unnecessary regulatory verbiage to be removed is the language at DFARS 231.205-18(c)(iii)(C)(4), which required major contractors to engage in and document a technical interchange with the Government, prior to generating independent research and development (IR&D) costs for IR&D projects initiated in fiscal year 2017 and later, in order for those costs to be determined to be allowable. We’ve written about this piece of pernicious nonsense before, more than once. (See, for example, this article.)

The rule was stillborn upon delivery. Implementation problems at the DoD coupled with contractor push-back effectively killed it. A DFARS Class Deviation acknowledged the rule was dead. But now we have a final rule that not only sticks the final nail in the coffin, but also buries that coffin at the bottom of the Mariana Trench.

According to the rule-killing comments, no public input was received and the rule is being killed at the behest of the Task Force. Well, not exactly. We know for a fact that certain industry associations were bombarding DoD leadership with respectful, but firm, demands to kill this rule. In any case, the DoD Task Force “determined that the DFARS coverage was outmoded and recommended removal, since requiring a technical interchange between the Government and major contractors is unnecessary. The objective of the interchange can be met through other means.”

So that rule went bye-bye.

Next up: Proposed regulatory language and requirements to be added to the DFARS, because hey, why not? It’s not like POTUS has a problem with regulatory burdens, right?



Effective January 1, 2019, Nick Sanders has been named as Editor of two reference books published by LexisNexis. The first book is Matthew Bender’s Accounting for Government Contracts: The Federal Acquisition Regulation. The second book is Matthew Bender’s Accounting for Government Contracts: The Cost Accounting Standards. Nick replaces Darrell Oyer, who has edited those books for many years.