DOD authorization includes time, materials compromise

The compromise National Defense Authorization Act includes a measure that allows Defense Department agencies to continue using time-and-materials contracting, but puts new burdens on contractors.

The House passed the compromise bill Dec. 13, and the Senate is considering it now. The Senate's original legislation had further restricted time-and-materials contracting.

Under the compromise version, created in the usual conference session to harmonize House and Senate legislation, DOD contracting officers can ask contractors to provide price data before issuing task orders. Currently, contractors must provide that information when they first compete for a contract, but not when they compete for task orders under a contract they hold.

Larry Allen, president of the Coalition for Government Procurement, said the compromise measure is good news for DOD and for Defense contractors. Time-and-materials contracts, in which the contractor bills the government based on the actual time spent and materials used, rather than a fixed cost, are a popular means for agencies to buy services.

Because contractors already produce price data, that burden is acceptable, Allen said. The legislation "doesn't require the government to ask for it, but it allows the DOD contracting officer to ask for it," he said. "It is more intrusive than has been done in the past."

If the Senate passes the compromise version of the bill and President Bush signs it, its provisions could become effective early next year, Allen said.