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DoD is issuing a proposed rule to amend the Defense Federal Acquisition Regulation Supplement to implement section 815 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 and section 811 of the NDAA for FY 2017, which amends 10 U.S.C. 2326 to revise requirements for undefinitized contract actions (UCA).  This proposed rule requires the following:

• If a contractor submits a qualifying proposal to definitize a UCA and the contracting officer definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the head of the agency concerned shall ensure that the profit allowed on the contract accurately reflects the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal.
• No UCA may extend beyond 90 days without a written determination by the secretary of the military department, head of the defense agency, combatant commander, or Under Secretary of Defense (Acquisition, Technology, and Logistics). 
• Contracting officers may not enter into a UCA for a foreign military sales unless the contractual action provides for agreement upon contractual terms, specifications, and price by the end of the 180-day period.

This rule does not revise the current regulatory requirements at DFARS 215.404-71-3(d)(2), which directs contracting officers to assess the extent to which costs have been incurred prior to definitization of the UCA.  However, contracting officers must document their assessment in formulating negotiation profit objectives that the profit allowed on the contract accurately reflects the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal.