By John W. Chierichella and W. Bruce Shirk
Under our system of laws, legal liability has customarily been based on certain showings, e.g., that an act or omission actually
Continue Reading Let’s Just Eliminate All Pretense Of Balance
Latest Updates on Developments Affecting Government Contracts & Investigations
By John W. Chierichella and W. Bruce Shirk
Under our system of laws, legal liability has customarily been based on certain showings, e.g., that an act or omission actually…
Continue Reading Let’s Just Eliminate All Pretense Of Balance
By W. Bruce Shirk and John W. Chierichella
Just three months ago, newly appointed DCAA Director Patrick Fitzgerald told contractors and acquisition agencies that his agency’s new mode of operations would aim at developing “mutually beneficial relationships” with both contractors and DOD acquisition agencies. DCAA would spring “no surprises” on contractors; it would conduct “more frequent communication with” them; DCAA would assure the provision of “responsive and timely services to agency stakeholders”; and – in a marked sea change from its traditional attitude, DCAA would abide by DOD direction that, while “the contracting officer and auditor work together… it is the contracting officer’s ultimate responsibility to determine fair and reasonable contract values.” (DCAA, Director’s Message, CODSIA Operating & Policy Committees Meeting, March 10, 2010, ppt slide 12; Memorandum, Office of the Undersecretary of Defense for Acquisition, Technology and Logistics, Subject: Resolving Contract Audit Recommendations, December 4, 2009).
Albert Einstein supposedly said that “the most powerful force in the world is compound interest.” Whether or not the great man actually said that, DCAA is now prepared to show contractors just how powerful compounding can be.
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On January 15, 2010, the Department of Defense announced plans to amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to allow contracting officers to withhold payments from companies with “deficient” business systems in an effort to prevent “unallowable and unreasonable costs on government contracts.” 75 Fed. Reg. 2457. Contracting officers would have the authority to withhold payments on cost reimbursement, incentive, time-and-materials, and labor-hour contracts.
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