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DOD/DARC RIN: 0750-AJ51 Publication ID: Fall 2017 
Title: ●Repeal of Independent Research and Development Technical Interchange (DFARS Case 2017-D041) 

DoD is issuing a final rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to remove the requirement at DFARS 231.205-18(c)(iii)(C)(4) for contractors to conduct a technical interchange with a DoD Government employee before independent research and development (IR&D) costs are generated for IR&D projects initiated in FY 2017 or later, as a prerequisite for those costs to be determined allowable.  This rule is expected to decrease costs for contractors and offerors.

Agency: Department of Defense(DOD)  Priority: Other Significant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: No  Unfunded Mandates: No 
EO 13771 Designation: Deregulatory 
CFR Citation: 48 CFR 231   
Legal Authority: 41 U.S.C. 1303   
Legal Deadline:  None

Statement of Need:

This action is necessary relieve excess burden experienced by industry when deciding to invest in innovative technologies that may benefit the Department.

Summary of the Legal Basis:

This rule is proposed under the authority at 41 U.S.C. 1303, Functions and authority, which provides the authority to issue and maintain the Federal Acquisition Regulation and executive agency implementing regulations. 


No alternatives to this action are being considered at this time.

Anticipated Costs and Benefits:

Implementing this rule provides a net annualized savings of approximately $2 million. This estimate is based on data available in the Federal Procurement Data System (FPDS) data for FY 2016, which indicates that 307 unique vendors were awarded a non-commercial, cost-type contract subject to cost accounting standards and certified cost and pricing data. IR&D costs are most commonly included in non-commercial, cost-type contracts that are subject to certified cost and pricing data and cost accounting standards. Public comments on the case implementing this requirement in the Defense Federal Acquisition Regulation Supplement indicate that a contractor may invest in numerous IR&D projects that would be incorporated into their proposed IR&D rate. Removing this requirement would relieve contractors from the time burden of preparing for a discussion, locating the appropriate Government contact, discussing with the Government, and documenting a technical interchange for an IR&D project.


If this rule is not finalized, the public will experience additional costs to comply with this rule, as well as the possibility of not being reimbursed for IR&D costs under a Government contract.

Action Date FR Cite
Final Action  01/00/2018 
Final Action Effective  01/00/2018 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: Federal 
Federalism: No 
Included in the Regulatory Plan: Yes 
RIN Data Printed in the FR: No 
Agency Contact:
Jennifer Hawes
Defense Acquisition Regulations System
Department of Defense
3060 Defense Pentagon, Room 3B941,
Washington, DC 20301-3060
Phone:571 372-6115