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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: July 3, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Material Management and Accounting Systems (MMAS)

SOURCE: Federal Register, July 3, 2000, Vol. 65, No. 128, page 41038

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: DOD is proposing to amend revise DFARS Subpart 242.72, Contractor Material Management and Accounting System, to revise the criteria for determining when review of a contractor's MMAS is needed.

DATES: Comments should be submitted on or before September 1, 2000.

ADDRESSES: Submit comments to Defense Acquisition Regulations Council, Attn: Mr. Rick Layser, OUSD (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-D003 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Mr. Rick Layser, 703-602-0293.

SUPPLEMENTAL INFORMATION: DFARS 242.7206, Contract Clause, is confusing in that it requires the inclusion of DFARS 252.242-7004, Material Management and Accounting System, in "all solicitations and contracts exceeding the simplified acquisition threshold that are not for the acquisition of commercial items and: (a) are not awarded under the set-aside or Section 8(a) procedures of FAR Part 19; and (b) are either (1) cost-reimbursement contracts; or (2) fixed price contracts with progress payments or other government financing." Yet DFARS 242.7203, MMAS Disclosure, Demonstration, and Maintenance Requirements, and DFARS 252.242-7004 state that only large businesses are subject to MMAS. This proposed rule would revise the prescription in DFARS 242.7206 (which would be redesignated as DFARS 242.7204) to state that the clause is to be included in solicitations and contracts that exceed the $100,000 simplified acquisition threshold and "are not awarded to small businesses, educational institutions, or nonprofit organizations." Also, the current prescription requires inclusion of the clause in "fixed-price contracts with progress payments or other government financing," regardless of whether the financing provisions are based on cost. The proposed rule would revise the prescription to require inclusion of the clause in fixed-price contracts that contain progress payments based on cost or other financing provisions based on cost. (EDITOR'S NOTE: DFARS 242.7200, Scope of Subpart, would be revised to make these clarifications.)

Other significant changes that would be made by this proposed rule are:

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

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