DoD Rescinds IR&D "Technical Interchange" Requirement

On August 24, 2018, the Department of Defense (DoD), issued a final rule that, effective immediately, removes the requirement in Defense Federal Acquisition Regulation Supplement (DFARS) 231.205–18(c)(iii)(C)(4) that major contractors conduct a formal discussion (i.e., “technical interchange”) with a DoD technical staffer prior to generating independent research and development (IR&D) costs for IR&D projects initiated in fiscal year 2017 and later, in order for those costs to be allowable. The requirement applied to major contractors, who are defined as contractors whose covered segments allocated a total of more than $11 million in IR&D and bid proposal costs to covered contracts during the preceding fiscal years. The requirement was repealed after a determination by the DoD Regulatory Reform Task Force that the DFARS requirement was unnecessary since the objective of the interchange “can be met through other means.”