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What The Far Council Giveth The Dar Council Taketh Away


After several years of consideration, the FAR and DAR Councils published three related sets of regulations in the Federal Register on December 12, 2006, addressing controversial issues about time and material (T&M) and Labor Hour (LH) contracts (see notice on left about upcoming webinar on these regulations). The FAR Council published two final rules permitting competitively awarded contracts for commercial items to qualify as commercial item contracts (with important limitations, including unprecedented rights to interview employees as part of a standard audit) and permitting contractors to bill for work performed by subcontractors on T&M/LH contracts in one of three ways (leaving it to each individual agency to decide which method to permit on the agency’s contracts), while the DAR Council published an interim rule adopting the method of billing subcontractor labor that is likely to be least attractive to industry.

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