1. Home
  2. |Insights
  3. |DFARS Excessive Pass-Through Cost Rule Modified

DFARS Excessive Pass-Through Cost Rule Modified

Client Alert | 1 min read | 05.13.08

Effective May 13, 2008 (73 Fed. Reg. 27464), the widely-criticized interim DFARS rules about "excessive pass-through costs" published last April were modified in yet another interim rule to address the confusion created by the interim rules. The most important features of the new interim rules are in the prefatory comments, which emphasize repeatedly that the requirement for reporting when subcontract effort will exceed 70 percent applies both before and after award, but is only a reporting requirement, not a threshold for coverage, and that the rules do not apply to any contract, no matter what the subcontract content, where the contractor demonstrates "added value," a term that is defined in the interim regulations to include performance of "subcontract management functions that the Contracting Officer determines are a benefit to the Government (e.g., processing orders of parts or services, maintaining inventory, reducing delivery lead times, managing multiple sources for contract requirements, coordinating deliveries, performing quality assurance functions)."

Insights

Client Alert | 3 min read | 05.14.26

CISA’s “CI Fortify” Initiative Signals New Expectations for Critical Infrastructure Resilience: What Operators and Vendors Need to Know

On May 5, 2026, CISA announced CI Fortify — an initiative directing critical infrastructure owners and operators to prepare for geopolitical conflict in which OT networks are actively targeted while communications infrastructure is simultaneously degraded....