Allowability of IR&D Costs: Dis-inflation Run Amok

DOD has issued a proposed amendment to DFARS 231.205-18 (Mar. 2, 2011) that would condition the allowability of independent research and development costs on the reporting of unspecified information about individual projects at least annually and again on completion of projects, using DOD on-line reporting forms. The proposed rule would apply to all contractors with annual IR&D costs in excess of $50,000, an amount that is less than 1% of the threshold in effect in 1990 for reporting IR&D projects under the prior regulatory regime, a mandatory reporting requirement that was completely abolished in 1996.