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Final Rule Requires Technical Interchange for IR&D Cost Allowability

November 14, 2016

On November 4, 2016, DoD issued a final rule requiring contractors performing IR&D projects initiated in FY2017 or later to engage in a technical interchange with DoD, and report the occurrence of this interchange, before the costs for such projects may be deemed allowable (a topic previously discussed here). Although the rule is stated to be intended to promote DoD awareness of IR&D projects and provide feedback to contractors, it is likely to impose an administrative burden on contractors and DoD alike and could have a chilling effect on IR&D investment, particularly because it is silent regarding the allowability of IR&D costs if DoD fails to engage.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

John E. McCarthy Jr.
Partner – Washington, D.C.
Phone: +1.202.624.2579
Stephen J. McBrady
Partner – Washington, D.C.
Phone: +1.202.624.2547
Jonathan M. Baker
Partner – Washington, D.C.
Phone: +1.202.624.2641