Government Contracts Monitor

New DFARS Reporting Requirement for IR&D Projects

March 2, 2012

On January 30, 2012, DoD issued a final rule amending the DFARS to require major contractors to report independent research and development (IR&D) projects for which reimbursement, as an allowable indirect cost, is sought from DoD.  See DFARS 231.205-18(c)(iii)(C).  Under this rule, which is effective immediately, major contractors must report IR&D projects to the Defense Technical Information Center (DTIC) using the DTIC’s on-line input form and instructions at http://www.dtic.mil/ird/dticdb/index.htmlbefore the IR&D costs may be deemed allowable.  Additionally, major contractors will be required to update this information annually.  For purposes of this provision, “major contractor” means any contractor whose covered segments allocated a total of more than $11 million in IR&D/B&P costs to covered contracts during the preceding fiscal year.

 

According to the DOD, this rule will ensure that DoD funds are effectively spent on IR&D projects that benefit DoD and will promote the technical prowess of the industry by providing more visibility into the technical content of IR&D activities.  In addressing public concerns, DoD stressed that the information reported to the DTIC would be protected and would not be accessible through a FOIA request because it would qualify as trade secrets and proprietary information.  According to DoD, businesses that are not required to report information under this rule are encouraged to do so because there may be an advantage to any size business to have its projects included in the database.   

Katie Calogero is the attorney responsible for the content of this article.