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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: May 22, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Profit Incentives to Produce Innovative New Technologies

SOURCE: Federal Register, May 22, 2000, Vol. 65, No. 99, page 32066

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: DOD is proposing to amend DFARS Subpart 215.4, Contract Pricing, to implement Section 813 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65), which requires DOD to review its profit guidelines to determine whether "appropriate modifications, such as placing increased emphasis on technical risk as a factor for determining appropriate profit margins, would provide an increased profit incentive for contractors to develop and produce complex and innovative new technologies."

EDITOR'S NOTE: For more on the advanced notice of proposed rulemaking, see the February 10, 2000, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Profit Policy."

DATES: Comments should be submitted on or before July 21, 2000, to be considered in the formation of the final rule.

ADDRESSES: Submit written comments to Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, PDUSD(AT&L) DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062; fax: 703-602-0350; e-mail: dfars@acq.osd.mil. Cite DFARS Case 2000-D300 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, 703-602-0288.

SUPPLEMENTAL INFORMATION: To comply with Section 813 of the FY 2000 National Defense Authorization Act, DOD published an advance notice of proposed rulemaking on February 10, 2000, posted a preliminary draft of potential changes on the Defense Procurement Internet web site at http://www.acq.osd.mil/dp/cpf, and held a public meeting on February 23, 2000.

Based on the comments received, DOD has prepared a proposed rule that is, for the most part, the same as the draft changes that were posted on the Internet, except that some minor changes as indicated.

The following are the proposed changes:

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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