Pilot Program to Accelerate Contracting and Pricing Processes

Section 890 of the 2019 NDAA (National Defense Authorization Act) authorized the Defense Department to conduct a pilot program with contracts in excess of $50 million (excluding those that are part of a major defense acquisition program) by

• Basing price reasonableness determinations on actual cost and pricing data for purchases of the same or similar products for the DoD and
• Reducing the cost and pricing data to be submitted.

The Defense Department sees this as an opportunity in a pilot setting to assess the impact of the efficiencies achieved under this pilot program including reducing contractor proposal costs and the time required to award contracts greater than $50 million.

As a condition of participating in this pilot program, the Contractor shall submit verifiable data documenting any savings (time and money) achieved as a result of the pilot program within three months after award.

The Defense Department is not waiting around for its FAR supplement (DFARS) to be amended through the regulatory process. It has issued a class deviation making the authorization effective immediately. Participation into the program must be approved by the Principal Director, Defense Pricing and Contracting.

Contracting officers using this authority to negotiate contracts are still required to determine that the costs are fair and reasonable for the Government. Now they can find means other than requiring cost or pricing data, to assist in making that determination.

This waiver applies, of course, to negotiated contracts and has no bearing on competitive awards or commercial item procurement. No word on how long the pilot program is to last.